BRADY FIRST ADDRESSED ISSUE IN 2003
Senator Brady first addressed the issue of medical malpractice in 2003.
On February 26, 2003, several hundred doctors met in Springfield to rally against skyrocketing medical malpractice insurance premiums that were driving physicians and hospitals out of business and leaving Illinois citizens with fewer healthcare options.
Senator Brady introduced legislation that year to address the crisis, but state Democrat leaders blocked his efforts.
2005 LAW SOUGHT BALANCE
Senate Republicans were strong supporters of medical malpractice reform, arguing that many doctors were buckling under the weight of skyrocketing insurance rates that were the result of frivolous lawsuits and runaway jury verdicts.
The 2005 law only capped damages that have no dollar value, such as loss of companionship, pain and suffering, etc. The law did not place limits on damages that result in financial costs to the injured party, such as loss of wages or medical expenses.
The non-economic damages were limited because juries often award exorbitant amounts to plaintiffs based on emotion rather than the facts of the case. Because these awards can be unpredictable, insurance companies have no way to determine what the premiums should be and are compelled to charge the doctors for the highest possible risk—which drives up the cost of healthcare for everyone.
The state’s skyrocketing medical malpractice rates forced many physicians and specialists to flee Illinois, particularly in areas bordering other states and the Chicago metropolitan region, because rates in neighboring states were much more reasonable. As a result, some Illinois residents had limited or no access to much-needed medical care.
HOMEOWNERS, BE WARY OF PREDATORY MORTGAGE LENDING
Federal authorities are warning that Illinois has become a hotspot for mortgage fraud.
As a greater number of banks reject mortgage refinancing during the economic downturn, more homeowners stuck with high mortgage payments and desperate to save their homes have found themselves victims of unethical mortgage brokers.
As the practice of predatory mortgage lending escalates in Illinois, educating citizens about predatory lending becomes increasingly important.
Predatory lending is making a loan that the borrower does not need, does not want, or cannot afford. In a predatory loan, the primary benefit of the loan always goes to the lender, not the borrower.
Any current or first time homeowner considering a new mortgage should consider these tips to protect themselves from potential predatory lending practices:
• False or misleading promises – Be wary of claims that sound too good to be true. Promises of “easy credit,” “we say ‘yes’ to anybody,” “no out-of-pocket expenses,” “easy payment terms,” and “no payment for 60, 90, 120 days, or more” should send up a red flag.
• Excessive fees – Look for all the charges that you will have to pay as a borrower. Don’t agree to pay any charges that you have not been told about ahead of time, and don’t agree to pay any charges that you don’t understand.
• High or adjustable interest rates – Find out what type of interest rate will be applied to the loan and if the rate is adjustable. If the loan interest rate is adjustable, find out how much the rate can increase over the life of the loan. While a loan with an adjustable rate often starts out with reasonable monthly payments, the loan rate can increase over time, making it unaffordable.
• End-of-loan features – Be aware of terms that don’t come into play until the end of the loan. These features can include balloon payments (a large payment due at the end of a loan, typically following lower monthly payments) or “prepayment penalties” for paying the loan off before the end of the loan term.
• “Interest only” loans – Be extremely cautious of “interest only” loans. With this type of loan, the monthly payments only cover the interest owed to the lender for financing the loan. Unlike other loans, your payments will not reduce the principle amount that you owe the lender. At the end of an “interest only” loan, you will still owe the original amount you borrowed.
• Excessive loan amounts – Don’t let a lender convince you to take out a larger loan than you need or can afford. Borrowing against all of the value in your home leaves you without any cushion in case of emergency.
• Repeated refinancing – Be wary of any lender who tries to get you to refinance repeatedly. This practice, called “loan flipping” or “churning,” can vastly increase your overall debt and will get you a relatively small amount of cash compared to the refinanced amount.
Homeowners who would like to educate themselves regarding personal and home equity loans are encouraged to consult with an attorney who can review a loan contract so the mortgage seeker knows exactly what he or she is getting into financially and legally.
For more information regarding predatory mortgage lending, visit the Mortgage Fraud Task Force (MFTF) on the Illinois Department of Financial and Professional Regulation’s Web site at http://idfpr.com/. If you feel you’re a victim of mortgage fraud, call 1-800-532-8785.
Since its inception in 2006, the MFTF has taken disciplinary action against more than 100 people and entities, and assessed fines in excess of $1 million. Last year, the MFTF conducted a regulatory sweep of more than 150 mortgage companies to ensure that they were complying with a new law that established stricter underwriting standards for mortgage companies.