Public Act 096-1419
 
SB3739 EnrolledLRB096 20387 AJO 36030 b

    AN ACT concerning civil law.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 1. Short title. This amendatory Act may be referred
to as the Save Our Neighborhoods Act of 2010.
 
    Section 5. The Illinois Housing Development Act is amended
by adding Sections 7.30 and 7.31 as follows:
 
    (20 ILCS 3805/7.30 new)
    Sec. 7.30. Foreclosure Prevention Program.
    (a) The Authority shall establish and administer a
Foreclosure Prevention Program. The Authority shall use moneys
in the Foreclosure Prevention Program Fund, and any other funds
appropriated for this purpose, to make grants to (i) approved
counseling agencies for approved housing counseling and (ii)
approved community-based organizations for approved
foreclosure prevention outreach programs. The Authority shall
promulgate rules to implement this Program and may adopt
emergency rules as soon as practicable to begin implementation
of the Program.
    (b) Subject to appropriation, the Authority shall make
grants from the Foreclosure Prevention Program Fund as follows:
        (1) 25% of the moneys in the Fund shall be used to make
    grants to approved counseling agencies that provide
    services in Illinois outside of the City of Chicago. Grants
    shall be based upon the number of foreclosures filed in an
    approved counseling agency's service area, the capacity of
    the agency to provide foreclosure counseling services, and
    any other factors that the Authority deems appropriate.
        (2) 25% of the moneys in the Fund shall be distributed
    to the City of Chicago to make grants to approved
    counseling agencies located within the City of Chicago for
    approved housing counseling or to support foreclosure
    prevention counseling programs administered by the City of
    Chicago.
        (3) 25% of the moneys in the Fund shall be used to make
    grants to approved community-based organizations located
    outside of the City of Chicago for approved foreclosure
    prevention outreach programs.
        (4) 25% of the moneys in the Fund shall be used to make
    grants to approved community-based organizations located
    within the City of Chicago for approved foreclosure
    prevention outreach programs.
    As used in this Section:
    "Approved community-based organization" means a
not-for-profit entity that provides educational and financial
information to residents of a community through in-person
contact. "Approved community-based organization" does not
include a not-for-profit corporation or other entity or person
that provides legal representation or advice in a civil
proceeding or court-sponsored mediation services, or a
governmental agency.
    "Approved foreclosure prevention outreach program" means a
program developed by an approved community-based organization
that includes in-person contact with residents to provide (i)
pre-purchase and post-purchase home ownership counseling, (ii)
education about the foreclosure process and the options of a
mortgagor in a foreclosure proceeding, and (iii) programs
developed by an approved community-based organization in
conjunction with a State or federally chartered financial
institution.
    (c) As used in this Section, "approved counseling agencies"
and "approved housing counseling" have the meanings ascribed to
those terms in Section 15-1502.5 of the Code of Civil
Procedure.
 
    (20 ILCS 3805/7.31 new)
    Sec. 7.31. Abandoned Residential Property Municipality
Relief Program.
    (a) The Authority shall establish and administer an
Abandoned Residential Property Municipality Relief Program.
The Authority shall use moneys in the Abandoned Residential
Property Municipality Relief Fund, and any other funds
appropriated for this purpose, to make grants to municipalities
to assist with removal costs and securing or enclosing costs
incurred by the municipality pursuant to Section 11-20-15.1 of
the Illinois Municipal Code, as approved by the Authority under
the Program. The Authority shall promulgate rules for the
administration, operation, and maintenance of the Program and
may adopt emergency rules as soon as practicable to begin
implementation of the Program.
    (b) Subject to appropriation, the Authority shall make
grants from the Abandoned Residential Property Municipality
Relief Fund as follows:
        (1) 75% of the moneys in the Fund shall be distributed
    to municipalities, other than the City of Chicago, to
    assist with removal costs and securing or enclosing costs
    incurred by the municipality pursuant to Section
    11-20-15.1 of the Illinois Municipal Code.
        (2) 25% of the moneys in the Fund shall be distributed
    to the City of Chicago to assist with removal costs and
    securing or enclosing costs incurred by the municipality
    pursuant to Section 11-20-15.1 of the Illinois Municipal
    Code.
 
    Section 10. The Illinois Municipal Code is amended by
changing Section 11-20-15.1 as follows:
 
    (65 ILCS 5/11-20-15.1)
    Sec. 11-20-15.1. Lien for costs of removal, securing, and
enclosing on abandoned residential property.
    (a) If the municipality elects to incur a removal cost
pursuant to subsection (d) of Section 11-20-7, subsection (d)
of Section 11-20-8, subsection (d) of Section 11-20-12, or
subsection (e) of Section 11-20-13, or a securing or enclosing
cost pursuant to Section 11-31-1.01 with respect to an
abandoned residential property, then that cost is a lien upon
the underlying parcel of that abandoned residential property.
This lien is superior to all other liens and encumbrances,
except tax liens and as otherwise provided in this Section.
    (b) To perfect a lien under this Section, the municipality
must, within one year after the cost is incurred for the
activity, file notice of the lien in the office of the recorder
in the county in which the abandoned residential property is
located or, if the abandoned residential property is registered
under the Torrens system, in the office of the Registrar of
Titles of that county, a sworn statement setting out:
        (1) a description of the abandoned residential
    property that sufficiently identifies the parcel;
        (2) the amount of the cost of the activity;
        (3) the date or dates when the cost for the activity
    was incurred by the municipality; and
        (4) a statement that the lien has been filed pursuant
    to subsection (d) of Section 11-20-7, subsection (d) of
    Section 11-20-8, subsection (d) of Section 11-20-12,
    subsection (e) of Section 11-20-13, or Section 11-31-1.01,
    as applicable.
    If, for any abandoned residential property, the
municipality engaged in any activity on more than one occasion
during the course of one year, then the municipality may
combine any or all of the costs of each of those activities
into a single notice of lien.
    (c) To enforce a lien pursuant to this Section, the
municipality must maintain contemporaneous records that
include, at a minimum: (i) a dated statement of finding by the
municipality that the property for which the work is to be
performed has become abandoned residential property, which
shall include (1) the date when the property was first known or
observed to be unoccupied by any lawful occupant or occupants,
(2) a description of the actions taken by the municipality to
contact the legal owner or owners of the property identified on
the recorded mortgage, or, if known, any agent of the owner or
owners, including the dates such actions were taken, and (3) a
statement that no contacts were made with the legal owner or
owners or their agents as a result of such actions, (ii) a
dated certification by an authorized official of the
municipality of the necessity and specific nature of the work
to be performed, (iii) a copy of the agreement with the person
or entity performing the work that includes the legal name of
the person or entity, the rate or rates to be charged for
performing the work, and an estimate of the total cost of the
work to be performed, (iv) detailed invoices and payment
vouchers for all payments made by the municipality for such
work, and (v) a statement as to whether the work was engaged
through a competitive bidding process, and if so, a copy of all
proposals submitted by the bidders for such work.
    (d) A lien under this Section shall be enforceable
exclusively at the hearing for confirmation of sale of the
abandoned residential property that is held pursuant to
subsection (b) of Section 15-1508 of the Code of Civil
Procedure and shall be limited to a claim of interest in the
proceeds of the sale and subject to the requirements of this
Section. Any mortgagee who holds a mortgage on the property, or
any beneficiary or trustee who holds a deed of trust on the
property, may contest the lien or the amount of the lien at any
time during the foreclosure proceeding upon motion and notice
in accordance with court rules applicable to motions generally.
Grounds for forfeiture of the lien or the superior status of
the lien granted by subsection (a) of this Section shall
include, but not be limited to, a finding by the court that:
(i) the municipality has not complied with subsection (b) or
(c) of this Section, (ii) the scope of the work was not
reasonable under the circumstances, (iii) the work exceeded the
authorization for the work to be performed under subsection (a)
of Section 11-20-7, subsection (a) of Section 11-20-8,
subsection (a) of Section 11-20-12, subsection (a) of Section
11-20-13, or subsection (a) of Section 11-31-1.01, as
applicable, or (iv) the cost of the services rendered or
materials provided was not commercially reasonable. Forfeiture
of the superior status of the lien otherwise granted by this
Section shall not constitute a forfeiture of the lien as a
subordinate lien.
    (e) Upon payment of the amount of a lien filed under this
Section by the mortgagee, servicer, owner, or any other person,
the municipality shall release the lien, and the release may be
filed of record by the person making such payment at the
person's sole expense as in the case of filing notice of lien.
    (f) Notwithstanding any other provision of this Section, a
municipality may not file a lien pursuant to this Section for
activities performed pursuant to Section 11-20-7, Section
11-20-8, Section 11-20-12, Section 11-20-13, or Section
11-31-1.01, if: (i) the mortgagee or servicer of the abandoned
residential property has provided notice to the municipality
that the mortgagee or servicer has performed or will perform
the remedial actions specified in the notice that the
municipality otherwise might perform pursuant to subsection
(d) of Section 11-20-7, subsection (d) of Section 11-20-8,
subsection (d) of Section 11-20-12, subsection (e) of Section
11-20-13, or Section 11-31-1.01, provided that the remedial
actions specified in the notice have been performed or are
performed or initiated in good faith within 30 days of such
notice; or (ii) the municipality has provided notice to the
mortgagee or servicer of a problem with the property requiring
the remedial actions specified in the notice that the
municipality otherwise would perform pursuant to subsection
(d) of Section 11-20-7, subsection (d) of Section 11-20-8,
subsection (d) of Section 11-20-12, subsection (e) of Section
11-20-13, or Section 11-31-1.01, and the mortgagee or servicer
has performed or performs or initiates in good faith the
remedial actions specified in the notice within 30 days of such
notice.
    (g) This Section and subsection (d) of Section 11-20-7,
subsection (d) of Section 11-20-8, subsection (d) of Section
11-20-12, subsection (e) of Section 11-20-13, or Section
11-31-1.01 shall apply only to activities performed, costs
incurred, and liens filed after the effective date of this
amendatory Act of the 96th General Assembly.
    (h) For the purposes of this Section and subsection (d) of
Section 11-20-7, subsection (d) of Section 11-20-8, subsection
(d) of Section 11-20-12, subsection (e) of Section 11-20-13, or
Section 11-31-1.01:
    "Abandoned residential property" means any type of
permanent residential dwelling unit, including detached single
family structures, and townhouses, condominium units and
multifamily rental apartments covering the entire property,
and manufactured homes treated under Illinois law as real
estate and not as personal property, that has been unoccupied
by any lawful occupant or occupants for at least 90 days, and
for which after such 90 day period, the municipality has made
good faith efforts to contact the legal owner or owners of the
property identified on the recorded mortgage, or, if known, any
agent of the owner or owners, and no contact has been made. A
property for which the municipality has been given notice of
the order of confirmation of sale pursuant to subsection (b-10)
of Section 15-1508 of the Code of Civil Procedure shall not be
deemed to be an abandoned residential property for the purposes
of subsection (d) of Section 11-20-7, subsection (d) of Section
11-20-8, subsection (d) of Section 11-20-12, subsection (e) of
Section 11-20-13, and Section 11-31-1.01 of this Code.
    "MERS program" means the nationwide Mortgage Electronic
Registration System approved by Fannie Mae, Freddie Mac, and
Ginnie Mae that has been created by the mortgage banking
industry with the mission of registering every mortgage loan in
the United States to lawfully make information concerning each
residential mortgage loan and the property securing it
available by Internet access to mortgage originators,
servicers, warehouse lenders, wholesale lenders, retail
lenders, document custodians, settlement agents, title
companies, insurers, investors, county recorders, units of
local government, and consumers.
    (i) Any entity or person who performs a removal, securing,
or enclosing activity pursuant to the authority of a
municipality under subsection (d) of Section 11-20-7,
subsection (d) of Section 11-20-8, subsection (d) of Section
11-20-12, subsection (e) of Section 11-20-13, or Section
11-31-1.01, may, in its, his, or her own name, file a lien
pursuant to subsection (b) of this Section and appear in a
foreclosure action on that lien pursuant to subsection (d) of
this Section in the place of the municipality, provided that
the municipality shall remain subject to subsection (c) of this
Section, and such party shall be subject to all of the
provisions in this Section as if such party were the
municipality.
    (i-5) All amounts received by the municipality for costs
incurred pursuant to this Section for which the municipality
has been reimbursed under Section 7.31 of the Illinois Housing
Development Act shall be remitted to the State Treasurer for
deposit into the Abandoned Residential Property Municipality
Relief Fund.
    (j) If prior to subsection (d) of Section 11-20-7,
subsection (d) of Section 11-20-8, subsection (d) of Section
11-20-12, and subsection (e) of Section 11-20-13 becoming
inoperative a lien is filed pursuant to any of those
subsections, then the lien shall remain in full force and
effect after the subsections have become inoperative, subject
to all of the provisions of this Section. If prior to the
repeal of Section 11-31-1.01 a lien is filed pursuant to
Section 11-31-1.01, then the lien shall remain in full force
and effect after the repeal of Section 11-31-1.01, subject to
all of the provisions of this Section.
(Source: P.A. 96-856, eff. 3-1-10.)
 
    Section 15. The Code of Civil Procedure is amended by
changing Section 15-1502.5 and by adding Sections 15-1504.1 and
15-1507.1 as follows:
 
    (735 ILCS 5/15-1502.5)
    (Section scheduled to be repealed on April 6, 2011)
    Sec. 15-1502.5. Homeowner protection.
    (a) As used in this Section:
    "Approved counseling agency" means a housing counseling
agency approved by the U.S. Department of Housing and Urban
Development.
    "Approved Housing Counseling" means in-person counseling
provided by a counselor employed by an approved counseling
agency to all borrowers, or documented telephone counseling
where a hardship would be imposed on one or more borrowers. A
hardship shall exist in instances in which the borrower is
confined to his or her home due to medical conditions, as
verified in writing by a physician or the borrower resides 50
miles or more from the nearest approved counseling agency. In
instances of telephone counseling, the borrower must supply all
necessary documents to the counselor at least 72 hours prior to
the scheduled telephone counseling session.
    "Delinquent" means past due with respect to a payment on a
mortgage secured by residential real estate.
    "Department" means the Department of Financial and
Professional Regulation.
    "Secretary" means the Secretary of Financial and
Professional Regulation or other person authorized to act in
the Secretary's stead.
    "Sustainable loan workout plan" means a plan that the
mortgagor and approved counseling agency believe shall enable
the mortgagor to stay current on his or her mortgage payments
for the foreseeable future when taking into account the
mortgagor income and existing and foreseeable debts. A
sustainable loan workout plan may include, but is not limited
to, (1) a temporary suspension of payments, (2) a lengthened
loan term, (3) a lowered or frozen interest rate, (4) a
principal write down, (5) a repayment plan to pay the existing
loan in full, (6) deferred payments, or (7) refinancing into a
new affordable loan.
    (b) Except in the circumstance in which a mortgagor has
filed a petition for relief under the United States Bankruptcy
Code, no mortgagee shall file a complaint to foreclose a
mortgage secured by residential real estate until the
requirements of this Section have been satisfied.
    (c) Notwithstanding any other provision to the contrary,
with respect to a particular mortgage secured by residential
real estate, the procedures and forbearances described in this
Section apply only once per subject mortgage.
    Except for mortgages secured by residential real estate in
which any mortgagor has filed for relief under the United
States Bankruptcy Code, if a mortgage secured by residential
real estate becomes delinquent by more than 30 days the
mortgagee shall send via U.S. mail a notice advising the
mortgagor that he or she may wish to seek approved housing
counseling. Notwithstanding anything to the contrary in this
Section, nothing shall preclude the mortgagor and mortgagee
from communicating with each other during the initial 30 days
of delinquency or reaching agreement on a sustainable loan
workout plan, or both.
    No foreclosure action under Part 15 of Article XV of the
Code of Civil Procedure shall be instituted on a mortgage
secured by residential real estate before mailing the notice
described in this subsection (c).
    The notice required in this subsection (c) shall state the
date on which the notice was mailed, shall be headed in bold
14-point type "GRACE PERIOD NOTICE", and shall state the
following in 14-point type: "YOUR LOAN IS MORE THAN 30 DAYS
PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY
BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING.
YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE
TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD,
THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU.
YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU
OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING
AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED
FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL
REGULATION."
    The notice shall also list the Department's current
consumer hotline, the Department's website, and the telephone
number, fax number, and mailing address of the mortgagee. No
language, other than language substantially similar to the
language prescribed in this subsection (c), shall be included
in the notice. Notwithstanding any other provision to the
contrary, the grace period notice required by this subsection
(c) may be combined with a counseling notification required
under federal law.
    The sending of the notice required under this subsection
(c) means depositing or causing to be deposited into the United
States mail an envelope with first-class postage prepaid that
contains the document to be delivered. The envelope shall be
addressed to the mortgagor at the common address of the
residential real estate securing the mortgage.
    (d) Until 30 days after mailing the notice provided for
under subsection (c) of this Section, no legal action shall be
instituted under Part 15 of Article XV of the Code of Civil
Procedure.
    (e) If, within the 30-day period provided under subsection
(d) of this Section, an approved counseling agency provides
written notice to the mortgagee that the mortgagor is seeking
approved counseling services, then no legal action under Part
15 of Article XV of the Code of Civil Procedure shall be
instituted for 30 days after the date of that notice. The date
that such notice is sent shall be stated in the notice, and
shall be sent to the address or fax number contained in the
Grace Period Notice required under subsection (c) of this
Section. During the 30-day period provided under this
subsection (e), the mortgagor or counselor or both may prepare
and proffer to the mortgagee a proposed sustainable loan
workout plan. The mortgagee will then determine whether to
accept the proposed sustainable loan workout plan. If the
mortgagee and the mortgagor agree to a sustainable loan workout
plan, then no legal action under Part 15 of Article XV of the
Code of Civil Procedure shall be instituted for as long as the
sustainable loan workout plan is complied with by the
mortgagor.
    The agreed sustainable loan workout plan and any
modifications thereto must be in writing and signed by the
mortgagee and the mortgagor.
    Upon written notice to the mortgagee, the mortgagor may
change approved counseling agencies, but such a change does not
entitle the mortgagor to any additional period of forbearance.
    (f) If the mortgagor fails to comply with the sustainable
loan workout plan, then nothing in this Section shall be
construed to impair the legal rights of the mortgagee to
enforce the contract.
    (g) A counselor employed by a housing counseling agency or
the housing counseling agency that in good faith provides
counseling shall not be liable to a mortgagee or mortgagor for
civil damages, except for willful or wanton misconduct on the
part of the counselor in providing the counseling.
    (h) There shall be no waiver of any provision of this
Section.
    (i) It is the General Assembly's intent that compliance
with this Section shall not prejudice a mortgagee in ratings of
its bad debt collection or calculation standards or policies.
    (j) This Section shall not apply, or shall cease to apply,
to residential real estate that is not occupied as a principal
residence by the mortgagor.
    (k) This Section is repealed July 1, 2013 2 years after the
effective date of this amendatory Act of the 95th General
Assembly.
(Source: P.A. 95-1047, eff. 4-6-09.)
 
    (735 ILCS 5/15-1504.1 new)
    Sec. 15-1504.1. Filing fee for Foreclosure Prevention
Program Fund.
    (a) With respect to residential real estate, at the time of
the filing of a foreclosure complaint, the plaintiff shall pay
to the clerk of the court in which the foreclosure complaint is
filed a fee of $50 for deposit into the Foreclosure Prevention
Program Fund, a special fund created in the State treasury. The
clerk shall remit the fee to the State Treasurer as provided in
this Section to be expended for the purposes set forth in
Section 7.30 of the Illinois Housing Development Act. All fees
paid by plaintiffs to the clerk of the court as provided in
this Section shall be disbursed within 60 days after receipt by
the clerk of the court as follows: (i) 98% to the State
Treasurer for deposit into the Foreclosure Prevention
Counseling Program Fund, and (ii) 2% to the clerk of the court
for administrative expenses related to implementation of this
Section.
    (b) Not later than March 1 of each year, the clerk of the
court shall submit to the Illinois Housing Development
Authority a report of the funds collected and remitted pursuant
to this Section during the preceding year.
 
    (735 ILCS 5/15-1507.1 new)
    Sec. 15-1507.1. Judicial sale fee for Abandoned
Residential Property Municipality Relief Fund.
    (a) Upon and at the sale of residential real estate under
Section 15-1507, the purchaser shall pay to the person
conducting the sale pursuant to Section 15-1507 a fee for
deposit into the Abandoned Residential Property Municipality
Relief Fund, a special fund created in the State treasury. The
fee shall be calculated at the rate of $1 for each $1,000 or
fraction thereof of the amount paid by the purchaser to the
person conducting the sale, as reflected in the receipt of sale
issued to the purchaser, provided that in no event shall the
fee exceed $300. No fee shall be paid by the mortgagee
acquiring the residential real estate pursuant to its credit
bid at the sale or by any mortgagee, judgment creditor, or
other lienor acquiring the residential real estate whose rights
in and to the residential real estate arose prior to the sale.
Upon confirmation of the sale under Section 15-1508, the person
conducting the sale shall remit the fee to the clerk of the
court in which the foreclosure case is pending. The clerk shall
remit the fee to the State Treasurer as provided in this
Section, to be expended for the purposes set forth in Section
7.31 of the Illinois Housing Development Act.
    (b) All fees paid by purchasers as provided in this Section
shall be disbursed within 60 days after receipt by the clerk of
the court as follows: (i) 98% to the State Treasurer for
deposit into the Abandoned Residential Property Municipality
Relief Fund, and (ii) 2% to the clerk of the court for
administrative expenses related to implementation of this
Section.
    (c) Not later than March 1 of each year, the clerk of the
court shall submit to the Illinois Housing Development
Authority a report of the funds collected and remitted during
the preceding year pursuant to this Section.
    (d) Subsections (a) and (b) of this Section shall become
inoperative on January 1, 2016. This Section is repealed on
March 2, 2016.
 
    Section 20. The State Finance Act is amended by adding
Sections 5.755 and 5.756 as follows:
 
    (30 ILCS 105/5.755 new)
    Sec. 5.755. The Foreclosure Prevention Program Fund.
 
    (30 ILCS 105/5.756 new)
    Sec. 5.756. The Abandoned Residential Property
Municipality Relief Fund.
 
    Section 99. Effective date. This Act takes effect 60 days
after becoming law.