Starting July 1, every mortgage closed and recorded in Cook County must carry a "certificate of exemption" or a "certificate of compliance" for the State's new mandatory mortgage counseling program. Counseling will be required for
- ALL loans where all the borrowers are deemed "first time home buyers" (anyone who has not owned a home in the past three years); and
- All refinancers, who are taking a loan that include prepayment penalties, interest only payments, negative amortizations interest rates that adjust in 3 years or less, OR where fees, YSP and points exceed 5%.
The program will cost $300 and will only be offered between 9:00 a.m. and 5:00 p.m., Monday thru Friday. IN PERSON. Ray goes on to predict that the counselors will be quickly overwhelmed with the volume of borrowers who will "need" this counseling and that delays will be a near certainty. Buyers will need to have all loan documents AND all supporting documents, (i.e. W-2s, paystubs, bank statements, etc.) The counselor will give the buyer a certificate which must be presented at closing.
"After July 1 even an Harvard MBA who runs a hedge fund and are buyingChris Covalle at Countrywide was kind enough to comment as well.
a multimillion dollar house, have to put up with this".
(I think you can tell, Ray thinks this a lousy idea.)
I believe some of the info you received regarding the bill may be incorrect so wanted to give you this cheat sheet.
Essentially, first time home buyers or clients refinancing their primary residence only have to go to counseling if one of the following conditions from section A & B at the top of page 3 are met. With all the changes to industry guidelines, the only one I see which may pose a counseling session would be interest only. Neg am's are gone/ high cost should be a non issue/ 3 year ARM's and under stink as far as pricing/ pre-payment penalties are scarce.
Any stated income deals are automatic counseling, but again, these are also becoming rare.
The larger issue is the time required to enter all this info into the state database (some 70-80 items of info) and receive your certificate of exemption.
Finally, if someone does trigger one of these criteria, they only have to go to counseling if they are working with an entity which is not federally chartered (i.e. most brokers). Right or wrong, places like C'wide, Chase, etc. will also have a certificate of exemption, regardless of the scenario.