The State of Illinois, like many other States, has recently had signed into law a bill addressing "high cost" / predatory lending on real estate loans. This new act requires that certain reports be filed with a State Department of Financial Institions.

The question I have is related to a definition that I have seen many times but never really questioned. Now that reporting directly refers to it I figure I need to clarify.

Could anyone either provide definition or direct me to a resource that provides explaination on the following:

"Conventional one to 4 family mortgage".... Conventional?

Thanks for any assistance / feedback.

Not rocket science - Usually loans are classified under the underwriting rules used. Conventional being the FannieMae/FreddieMac guidelines and the other is Government being the VA/FHA guidelines.

Just to continue with another thought - there are many safeguards built into the government (VA and FHA) programs, and many states have specifically excluded them from predatory lending regulations. Besides a state would have a hard time convincing the federal government that VA/FHA programs are predatory.

I agree with Anonymous, but would take the definition of "conventional" a little futher to include anything that isn't a government (FHA/VA) loan.