Recent Changes to the Mortgage Process

Web Admin - Friday, January 24, 2014

By: Jay A. Andrew
(847) 934-6000

In the wake of the 2008 financial crisis, Congress created the Consumer Financial Protection Bureau (CFPB). The CFPB is an agency that Congress tasked with regulating companies in the financial sector, such as banks and hedge funds, to ensure that consumers do not find themselves treated unfairly by such institutions. To that end, the CFPB passed a qualified mortgage rule. This rule places certain restrictions on the types of loans that banks can authorize, but it also provides them some protection against consumer lawsuits.

In addition to creating the CFPB, Congress also responded to the financial crisis by passing The Mortgage Forgiveness Debt Relief Act (MFDRA). This Act had prevented people from being taxed on mortgage debt that banks forgave. However, the Act expired on December 31st, and Congress did not choose to extend it. This expiration impacts consumers dealing with foreclosures and short sales.

Qualified Mortgages

Qualified mortgages are a feature of the CFPB’s “ability-to-repay” rule, which requires lenders to verify a person’s income and other financial details to ensure that they can afford the mortgage they want. The CFPB put this regulation in place to stop banks from recklessly giving out mortgages without checking people’s financials. The rule also prohibits a variety of loan features that contributed to the 2008 crash, like interest only loans or terms lasting more than 30 years. If the bank complies with all of these requirements, they receive legal protection for the loan.

The law places different levels of protection depending on whether the loan was prime or subprime. Consumers will find it difficult to sue on prime loans if they meet the qualified mortgage requirements. But, if they have a subprime mortgage, they may still be able to show the court that the bank did not comply with the ability-to-repay requirements, which may help them in a lawsuit.

The Mortgage Forgiveness Debt Relief Act

Congress passed the MFDRA in order to help people struggling under mortgage debt during the financial crisis. The Act helped people who owed more money on their homes than the homes were worth by lowering their tax burden. Before the Act, if a bank forgave a person’s debt, the government would tax the person on the forgiven debt as if it were income. The Act put a stop to that for the purposes of some mortgage debt.

However, the Act expired at the end of 2013, and though some members of Congress of are still talking about renewing it, that has not happened, which means that the tax break no longer exists. Now, if a person has their mortgage debt forgiven as part of a foreclosure or short sale, they may end up owing taxes on the forgiven debt.

If you have questions about your mortgage, contact a Des Plaines real estate lawyer today. Call 847-934-6000 to reach out to our firm. We serve many northwest suburban areas including Arlington Heights, Deer Park, Barrington, Buffalo Grove, and other nearby communities.

Recent Posts


guardianship attorney bike accident federal crimes boating under the influence Illinois estate planning law firm Illinois pet lawyer estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers Arlington Heights medical malpractice lawyer Mount Prospect wills and trusts lawyers Palatine trusts lawyer trucking accidents South Barrington real estate attorney defective products Deer Park motorcycle accident lawyer in terrorem provision Chicago will attorney dealing with problem employees construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Illinois mortgages Barrington employment law firm Des Plaines personal injury attorney Illinois pedestrian accident attorney Crystal Lake employment lawyer Crystal lake insurance dispute attorney loopholes uninsured motorist drug crimes slip and fall Illinois registered agent Illinois medical malpractice case commercial leasing Retaliatory Discharge Illinois driving without license Mount Prospect real estate lawyer senior citizens Colin Gilbert wills and trusts Illinois jet ski accident lawyer Arlington Heights tax lawyer condo association Crystal Lake criminal defense attorney startup company School Visitation Rights Act Illinois Chicago traffic lawyer Chicago employment lawyer Schaumburg real estate lawyer Barrington drug crime attorney Rolling Meadows medical malpractice lawyers Long Grove estate planning subcontractor Arlington Heights real estate lawyer underfunded trust Illinois criminal defense attorney criminal defense civil rights violation Schaumburg estate planning attorney employee rights contracts Inverness traffic law firm pedestrian-automobile accident Illinois traffic accident lawyer Home Remodeling Repair Act Long Grove real estate lawyer Illinois construction accident attorney Barrington criminal defense lawyer pedestrian accidents Illinois workers compensation lawyer Illinois LLC creation insurance claim dispute attorney traumatic brain injuries Palatine business attorney truck collisions drug crimes lawyer spinal cord injuries Deer Park accident attorney Barrington criminal lawyer fault based insurance marijuana Illinois employment laws real estate zoning Legal Info Kenilworth estate planning attorney life insurance dynasty trusts breach of contract Palatine probate lawyer filing a medical malpractice claim Rolling Meadows insurance attorney Policy Cancellation Barrington real estate lawyer insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys Arlington Heights wills and trusts lawyer personal injury attorney Des Plaines medical malpractice attorney Rolling Meadows personal injury lawyer Illinois rollover accident lawyers Illinois business law atorneys Rolling Meadows traffic law firm civil litigation Barrington estate planning attorney workplace sexual harassment homestead rights fiduciary rule criminal record Arlington Heights employment attorney Illinois employment law attorneys license suspension living trust benefits Des Plaines tax law firm probate lawyer Illinois insurance dispute lawyers Crystal Lake employment attorney Schaumburg injury lawyer creditors PTSD BAIID employment contract Arlington Heights car accident lawyer Palatine corporate attorney Arlington Heights personal injury attorney car accident Illinois insurance lawyer Buffalo Grove corporate attorney boating DUI Employment Discrimination Law Arlington Heights wills and trusts attorney Inverness civil lawyer Rolling Meadows marijuana attorney real estate contract living trust vs will DMV Buffalo Grove law firm Des Plaines insurance attorney Schaumburg personal injury lawyer Palatine employment law lawyer wrongful death Exclusions cell phone tower data revenge porn home inspection lawyer Chicago insurance law firm digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers Illinois red light cameras TBI medical research Schaumburg probate attorney Schaumburg employment law attorneys jet ski accidents texting and driving involuntary manslaughter Illinois personal injury lawyer motorcycle accident Illinois Workers’ Compensation Commission Chicago biking tips insurance claim dispute Illinois wills and trusts sexual harassment Schaumburg criminal attorney Long Grove wills and trusts attorneys Self-Directed IRA Accounts Barrington injury attorney cell phone accidents Rolling Meadows insurance dispute lawyers, insurance dispute first degree murder car accident lawyers products liability license revocation estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, bicycle dooring accidents IRA benefits changes to mortgage law Rolling Meadows real estate attorney estate plan employees medication errors healthcare claims Schaumburg construction accident lawyer Inverness DUI lawyer IRS disability benefits clemency Inverness real estate attorney Palatine real estate lawyer Rolling Meadows employment law attorneys medical malpractice llinois Real Estate Lawyers Association Chicago insurance claim attorneys Illinois defective products attorney Long Grove estate planning attorney Illinois employment lawyer Palatine construction attorney insurance agent negligence liability claims insurance denials mass shooting unauthorized overtime Inverness injury lawyer Palatine Attorney Rolling Meadows litigation lawyer Arlington Heights trucking lawyer Chicago corporate attorney estate tax Rolling Meadows insurance dispute lawyers traumatic brain injury Barrington Illinois estate planning lawyer Buffalo Grove employment lawyer Illinois lawyer Barrington attorney rollover accidents denial of life insurance Arlington Heights wills and trusts lawyers head on collisions Long Grove estate planning attorneys real estate closing texting while driving workers comp car accidents Illinois employment law car collision Rolling Meadows tax attorney Palatine traffic lawyer DUI attorney medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers Illinois insurance disputes dog bites right to work insurance claim delay criminal law comparative negligence owner responsibility Illinois medical malpractice lawyers forming a corporation in Illinois civil litigation attorney Schaumburg personal injury attorney Crystal Lake personal injury lawyer overtime pay ken apicella Arlington Heights criminal lawyer wage theft expungement FSLA pay when paid contract Buffalo Grove criminal defense lawyer Schaumburg personal injury lawyers Riverwoods estate planning lawyer Kenilworth estate planning lawyer Crystal Lake civil litigation lawyer Des Plaines personal injury lawyer product liability IRA trust transfer Illinois insurance attorney Schaumburg employment attorney gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys meal breaks fatal car accidents small business privacy laws Chicago employment attorney Crystal Lake insurance lawyer Arlington Heights personal injury lawyer Des Plaines Traffic Lawyer Palatine traffic accidents Long Grove real estate attorney controlled substance Illinois boating accident lawyer advance healthcare directive murder Illinois employment law firm Deer Park traffic accident attorney probate Rolling Meadows employment attorney preventing accidents Schaumburg civil litigation attorney automated cars medical malpractice compensation pet law DUI Illinois Smoke Detector Act Rolling Meadows boating crash lawyer child safety Arlington Heights insurance attorney Rolling Meadows insurance lawyer Crystal Lake business law attorneys Illinois traffic attorneys premises liability Des Plaines personal injury lawyers insurance claim Crystal Lake personal injury attorney Deer Park traffic lawyer Des Plaines claims law firm probate claims process loss of consortium insurance claim denials golf accidents Arlington Heights Traffic Lawyer estate planning trusts Rolling Meadows business lawyer Rolling Meadows DUI lawyer traffic offenses compensatory time Des Plaines accident attorney Barrington medical malpractice lawyers Illinois collections attorney Palatine drug lawyer traffic deaths Rolling Meadows traffic attorney Fair Labor Standards Act minimum wage boating accidents personal injury nursing home negligence Chicago trucking accident attorney Crystal Lake car accident attorney ObamaCare Schaumburg medical malpractice lawyer Chicago estate planning lawyer marijuana crimes attorney swimming pools Crystal Lake medical malpractice attorneys Illinois trucking safety POA Schaumburg traffic lawyer Crystal Lake traffic lawyer foreclosure Illinois probate lawyer life insurance lawyer wrongful termination DUI defense irrevocable trust insurance dispute attorney probate claims license reinstatement Buffalo Grove traffic lawyers Schaumburg liability Arlington Heights accident attorney drugs personal injury claim insurance negligence drug crime sexual images healthcare Inverness personal injury attorney pedestrian accident Illinois personal injury lawyers installment contracts Inverness probate lawyer Liquor Control Act Illinois Wage Payment and Collection Act Palatine insurance lawyer drunk driving Mt Prospect Attorney no contest clauses special needs trust estate planning for college students vacation home fines Illinois injury lawyer criminal Illinois estate planning blood alcohol content taxes deed transfer Super Mario Food and Drug Administration's Food Safety Modernization Act GM ignition switches Schaumburg criminal law attorney Deer Park employment law attorney Illinois home inspection Rolling Meadows personal injury lawyers DUI penalities speeding insurance adjusters Barrington business law firm Barrington personal injury lawyer life insurance claims Arlington Heights lawyer consent to a search driving rent to own real estate contracts jet ski denied insurance claims Palatine employment attorney income distribution deducation Schaumburg drug defense lawyer Buffalo Grove car accident lawyer Jay Andrew estate planning attorney Illinois workplace lawyer Crystal Lake bike accident lawyer Barrington employment law attorney Arlington Heights estate planning attorney Thanksgiving FMLA Illinois traffic laws Illinois employment attorneys Palatine employment lawyer Illinois law Illinois living will rumble strips digital assets Illinois corporate lawyer car accident lawyer Buffalo Grove medical malpractice lawyers Illinois will lawyer Barrington civil litigation attorney car crash injuries Illinois insurance claims lawyers rest breaks wills life insurance policy Palatine civil litigation lawyer distracted driving accidents Des Plaines real estate attorney Transfer on Death Instrument Palatine injury attorney Illinois wills and trusts attorneys trust payments Illinois medical malpractice attorney digital media accounts, estate planning, Arlington Heights estate planning attorney, Buffalo Grove real estate attorney employment law Palatine estate planning lawyer federal regulations for LLCs car crashes landlord bad faith insurance claims Rolling Meadows criminal lawyer power of attorney for healthcare real estate Rolling Meadows estate planning attorney Buffalo Grove injury lawyer natural gas explosion murder defense rollover car crashes cell phone Illinois small business Inverness corporate attorney power of attorney drug possession South Barrington real estate lawyer personal injury law firm Palatine workers compensation lawyer attorney fees Chicago will attorney, social media platforms, Illinois estate planning lawyer, Rolling Meadows corporate lawyer Crystal Lake law firm probate fees real estate attorney Arlington Heights Attorney Arlington Heights injury attorney social media after death insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys Des Plaines DUI attorney Crystal Lake pet attorney personal injury lawyer medical marijuana Deer Park real estate law firm employment law, Illinois employment laws Palatine criminal defense lawyer Illinois workplace discrimination attorney Palatine elder law attorney institutional trustee mortgage Rolling Meadows Illinois attorney hiring employees Illinois traffic ticket lawyer new real estate form business litigation Class A misdemeanor Rolling Meadows Attorney Des Plaines pet law attorney Buffalo Grove probate lawyer Des Plaines drug lawyer DGAA reckless homicide liens job lawyers Crystal Lake car accident lawyer BUI LLCs college kids Crystal Lake employment law attorney capital gains tax Palatine punch death gift taxes Rolling Meadows criminal attorney Arlington Heights wills and trusts attorneys Crystal Lake tax lawyer Palatine civil attorney Chicago lawyer Inverness estate planning lawyer Rolling Meadows personal injury attorney field sobriety test breathalyzer test Illinois bicycle safety traffic crimes Crystal Lake pedestrian accident lawyer sole proprietorship trucking accident lawyers Illinois personal injury attorney Illinois employee rights attorney. Buffalo Grove insurance claim dispute lawyers Rolling Meadows probate lawyer Illinois Transfer on Death Instrument Des Plaines motorcycle accident attorney unpaid assessment Inverness real estate lawyer blended families caretaker rights Des Plaines injury law firm insurance dispute overtime violations paid sick leave unpaid overtime Chicago attorney natural gas estate planning accidental death benefits Illinois wrongful termination lawyer Illinois speeding lawyer Joliet general practice lawyers hit and run accident modern family estate planning fiduciary rule delay Rolling Meadows employment law attorney traffic tickets workers compensation deadly crashes Inverness elder law lawyer Deer Park medical malpractice attorney Illinois elder law attorney Schaumburg insurance lawyers trauma after an accident insurance claims operating agreements financial advisors Palatine personal injury lawyer Arlington Heights pedestrian accidents employment lawyer work unions foreclosed rental property Barrington litigation attorney Illinois Sales Representative Act workers compensation benefits Family Medical Leave Act Do Not Resuscitate hands free device food poisoning Schaumburg corporate attorney traffic violations Colin H. Gilbert Mount Prospect elder law attorney DNR Barrington Traffic Lawyer Crystal Lake injury attorney Barrington employment attorney Rolling Meadows accident lawyer Kenilworth estate planning attorneys Arlington Heights car crash attorneys privacy Illinois Probate Act of 1975 construction contracts Schaumburg estate planning lawyer suspended license Home Sale Contingencies severance agreements traffic laws independent contractor Rolling Meadows Traffic Lawyer Illinois tax attorney Crystal Lake accident attorney Deer Park criminal attorney Des Plaines criminal attorney Des Plaines Landlord Tenant Ordinance problem employees Attorney Ken Apicella Buffalo Grove personal injury lawyer Arlington Heights TBI attorney murder charges Crystal Lake estate planning lawyer Illinois employment law attorney auto accidents Inverness insurance attorney motorcycle accident lawyer insurance agents Rolling Meadows car accident lawyers brain injury CAM Illinois real estate lawyer elder law Illinois traffic attorney Barrington workers compensation attorney Illinois civil litigation lawyer Illinois insurance claim attorney denied insurance claim manufacturing Deer Park personal injury lawyer Illinois car accident attorney living wills elder abuse agent Federal Food Drug and Cosmetic Act employment attorney pain and suffering Inverness accident lawyer estate attorney pet bites Illinois business lawyer Des Plaines drug crimes lawyer real estate attorneys crossover accidents spinal cord injury Deer Park workers compensation lawyer Arlington Heights employment law attorneys car crash commercial leases Crystal Lake medical malpractice lawyer Palatine law firm surgical mistakes digital information Crystal Lake traffic attorney Deer Park DUI lawyer Palatine corporate law attorneys holiday statistics estate planning lawyer trench injuries personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys Fourth of July traffic violations defense pedestrian injuries, pedestrian fatality corporate law Crystal Lake medical malpractice law firm investment property Rolling Meadows drug defense attorney personal injury accidents Des Plaines collections attorney employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys low-ball insurance settlement vacation home Whistleblower Claims Illinois motorcycle accident lawyer Chicago estate planning Illinois workers compensation attorney pizza emoji pregnant women Barrington estate planning lawyer comp time Schaumburg elder law lawyer insurance disputes medical malpractice claims caregiver tax attorney personal injury claims condo whistleblower protections employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, Illinois Human Rights Act Affordable Care Act underinsured motorist slip and fall accidents Buffalo Grove traffic attorney icy parking lots insurance denial appeals Illinois insurance claim dispute lawyers license landlord tenant law preventable medical errors defective products lawyer bicycle accidents appealing an insurance claim Schaumburg wrongful death attorney residential real estate insurance claim denial wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace insurance attorney Detainer Actions Illinois personal injury Schaumburg Attorney Illinois job attorney Chicago car accident lawyer real estate leasing drunk driving statistics commercial real estate back injuries Illinois insurance claim dispute lawyer Illinois estate planning attorney Des Plaines real estate lawyer Barrington boating accident attorney Illinois real estate construction accidents Arlington Heights traffic attorney probate process anesthesia errors Illinois trusts attorney Illinois medical malpractice claim BAC dram shop law IRELA Des Plaines civil attorney Forcible Entry distracted driving accident victims trusts real estate lawyer underage DUI ACA Schaumburg car accident attorney employee discrimination eluding a police officer employee misclassification living trust trustee Crystal Lake will lawyer digital evidence Illinois DUI attorney internet unfunded trust Buffalo Grove personal injury attorney Schaumburg estate attorney Barrington personal injury attorney traffic accidents health insurance dispute