Officials in Illinois, motivated by what they said was a spike in foreclosures in the Chicago area last year, are taking unusually strong measures to combat predatory lending.

Gov. Rod R. Blagojevich plans to sign a bill to create a state-run database to which lenders and mortgage brokers would have to submit every loan application they take in certain low-income areas.

His press secretary, Gerardo Cardenas, said the governor has until the end of the first week of August to sign the bill, which both houses of the General Assembly passed May 31.

The Illinois Department of Financial and Professional Regulation would determine where the law would apply and whether an applicant must get credit counseling before taking out the loan. Whenever counseling is deemed necessary, the lender or broker would have to pay for it.

The originator would also have to submit to the database any changes made to the loan before closing, and the department would have to rule again on whether counseling is needed.

The bill would also require title insurance companies or closing agents to file a host of information for the database.

Don Lampe, a partner in the Charlotte office of the law firm Womble Carlyle Sandridge & Rice PLLC, said the bill is "the first of its kind that would require detailed reporting to a governmental agency regarding the terms of the loan before the loan is made."

Lenders will be making a lot of calls to the department to find out how the database would work, Mr. Lampe said. The earliest the bill would likely take effect is January, he said.

The state would run a four-year pilot test of the database. Lenders and a department spokeswoman, Sue Hofer, expressed uncertainty about how the database would work. The bill does not specify how it would be set up or how originators would connect to it.

Lenders also complained that the bill not only would make loans more costly for the consumer, but also would probably delay closings.

"It would be very disruptive of the current process for a loan going through stages in underwriting and processing," said David E. Hertzel, the general counsel for Accredited Home Lenders Inc. in San Diego.

The problem would become most acute in the days before the closing, he said, because borrowers or brokers often "come in with new terms at the last minute," trying to get the best possible deal. The requirement that the department review changes would "make it impossible to close on time" and thus hurt the borrower.

Ray McKewon, an executive vice president and a co-founder of Accredited, said the closing delay "adds cost to the process," which lenders would "have to pass along" to the consumer.

John Robbins, the chief executive of AmNet Mortgage Inc., also in San Diego, agreed that the cost of getting a loan would rise. He took particular issue with the requirement that the database include all loans, including prime ones, made in the designated areas.

"Why would you take someone with a high-credit prime loan and put them through credit counseling?" he asked. The consumer would "ultimately pay a higher cost" to get the loan.

Mr. McKewon said that because lenders would probably avoid making loans in areas subject to the database process, he also wondered whether the state's measure would cause redlining.

Marc Savitt, a director of the National Association of Mortgage Brokers and the owner of the Martinsburg, W.Va., brokerage Mortgage Center Inc., said he expects lenders to avoid the areas involved with the database.

Legislators will roll back the database provision once they see that borrowers are losing access to credit, as other states did when lenders stopped or curtailed lending because of stiff anti-predator measures, he said.

Ms. Hofer, the department spokeswoman, said it is already collecting data on foreclosures and on loans classified as "high-risk" under a 2003 Illinois law, to determine the neighborhoods where the pilot test should focus its efforts.

The department would get $2.9 million of appropriations from the bill to build the database but has not yet determined what it would look like, how it would interface with originators, or how many people would run it, she said.

Mike Mills, a vice president and the Illinois state manager for the Santa Ana, Calif., title insurer First American Corp., said it "is troubled by the legislation due to the potential impact it may have on the real estate closing process. … However, without further guidance from the department charged with handling the implementation, it's too early for us to comment."

Mr. Cardenas, the governor's spokesman, said there were as many as 900 foreclosures in one Cook County ZIP code last year.

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