Homebuyers in selected zip codes of Illinois will need to turn over all their financial, personal and loan data to the state for a mandatory review before they will be allowed to buy a home. This review was mandated by a new law recently signed by Governor Rod Blagojevich.

Illinois House Bill 4050 creates a database that stores information submitted by a broker, originator, credit counselor and title insurance company or closing agent about a potential borrower. The Illinois Department of Financial and Professional Regulation will use this database to decide whether the borrower must undergo mandatory financial counseling before agreeing to allow the home loan to proceed. The bill is intended to aid state regulators in tracking and cracking down on abusive lenders, and it goes into effect on January 1, 2006, in selected areas of Cook County.