Sen. Iris Y. Martinez
Filed: 5/8/2017
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1 | AMENDMENT TO SENATE BILL 568
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2 | AMENDMENT NO. ______. Amend Senate Bill 568 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The Code of Civil Procedure is amended by | ||||||
5 | reenacting and changing Section 15-1502.5 as follows: | ||||||
6 | (735 ILCS 5/15-1502.5) | ||||||
7 | Sec. 15-1502.5. Homeowner protection. | ||||||
8 | (a) As used in this Section: | ||||||
9 | "Approved counseling agency" means a housing counseling | ||||||
10 | agency approved by the U.S. Department of Housing and Urban | ||||||
11 | Development. | ||||||
12 | "Approved Housing Counseling" means in-person counseling | ||||||
13 | provided by a counselor employed by an approved counseling | ||||||
14 | agency to all mortgagors borrowers , or documented telephone | ||||||
15 | counseling where a hardship would be imposed on one or more | ||||||
16 | mortgagors borrowers . A hardship shall exist in instances in |
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1 | which the mortgagor borrower is confined to his or her home due | ||||||
2 | to medical conditions, as verified in writing by a physician or | ||||||
3 | the mortgagor borrower resides 50 miles or more from the | ||||||
4 | nearest approved counseling agency. In instances of telephone | ||||||
5 | counseling, the mortgagor borrower must supply all necessary | ||||||
6 | documents to the counselor at least 72 hours prior to the | ||||||
7 | scheduled telephone counseling session. | ||||||
8 | "Delinquent" means past due with respect to a payment on a | ||||||
9 | mortgage secured by residential real estate or found to be in | ||||||
10 | breach of a mortgage secured by residential real estate . | ||||||
11 | "Department" means the Department of Financial and | ||||||
12 | Professional Regulation. | ||||||
13 | "Secretary" means the Secretary of Financial and | ||||||
14 | Professional Regulation or other person authorized to act in | ||||||
15 | the Secretary's stead. | ||||||
16 | "Sustainable loan workout plan" means a plan that the | ||||||
17 | mortgagor and approved counseling agency believe shall enable | ||||||
18 | the mortgagor to stay current on his or her mortgage payments | ||||||
19 | for the foreseeable future when taking into account the | ||||||
20 | mortgagor income and existing and foreseeable debts. A | ||||||
21 | sustainable loan workout plan may include, but is not limited | ||||||
22 | to, (1) a temporary suspension of payments, (2) a lengthened | ||||||
23 | loan term, (3) a lowered or frozen interest rate, (4) a | ||||||
24 | principal write down, (5) a repayment plan to pay the existing | ||||||
25 | loan in full, (6) deferred payments, or (7) refinancing into a | ||||||
26 | new affordable loan. |
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1 | (b) No Except in the circumstance in which a mortgagor has | ||||||
2 | filed a petition for relief under the United States Bankruptcy | ||||||
3 | Code, no mortgagee , servicer, or other party shall institute an | ||||||
4 | action under this Part file a complaint to foreclose a mortgage | ||||||
5 | secured by residential real estate until the requirements of | ||||||
6 | this Section have been satisfied. | ||||||
7 | (c) If Notwithstanding any other provision to the contrary, | ||||||
8 | with respect to a particular mortgage secured by residential | ||||||
9 | real estate, the procedures and forbearances described in this | ||||||
10 | Section apply only once per subject mortgage. Except for | ||||||
11 | mortgages secured by residential real estate in which any | ||||||
12 | mortgagor has filed for relief under the United States | ||||||
13 | Bankruptcy Code, if a mortgage secured by residential real | ||||||
14 | estate becomes delinquent , no later than the 45th day of the | ||||||
15 | mortgagor's delinquency, by more than 30 days the mortgagee or | ||||||
16 | its servicer shall send via U.S. mail a written grace period | ||||||
17 | notice (written notice) described in this subsection (c) | ||||||
18 | advising the mortgagor that he or she may wish to seek approved | ||||||
19 | housing counseling . A mortgagee, servicer, or other party is | ||||||
20 | not required to provide the written notice more than once | ||||||
21 | during any 180-day period except as provided otherwise in this | ||||||
22 | Section or by federal law. A mortgagee, servicer, or other | ||||||
23 | party may not institute an action under this Part until the | ||||||
24 | mortgagor is at least 120 days delinquent on the mortgage. | ||||||
25 | Notwithstanding anything to the contrary in this Section, | ||||||
26 | nothing shall preclude the mortgagor and mortgagee from |
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1 | communicating with each other during the initial 120 30 days of | ||||||
2 | delinquency or reaching agreement on a sustainable loan workout | ||||||
3 | plan, or both. | ||||||
4 | The duty to provide written notice and a corresponding | ||||||
5 | grace period under this Section prior to filing a legal action | ||||||
6 | under this Part arises when a delinquency exists and may not be | ||||||
7 | waived. | ||||||
8 | No foreclosure action under Part 15 of Article XV of the | ||||||
9 | Code of Civil Procedure shall be instituted on a mortgage | ||||||
10 | secured by residential real estate before mailing the notice | ||||||
11 | described in this subsection (c). | ||||||
12 | The written notice required in this subsection (c) shall | ||||||
13 | state the date on which the notice was mailed, shall be headed | ||||||
14 | in bold 14-point type "GRACE PERIOD NOTICE", and shall state | ||||||
15 | the following in 14-point type:
"YOUR MORTGAGE LOAN IS MORE | ||||||
16 | THAN 30 DAYS PAST DUE OR YOU HAVE BECOME DELINQUENT ON YOUR | ||||||
17 | MORTGAGE LOAN . YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. | ||||||
18 | PLEASE CONTACT US. THERE MAY BE MORTGAGE LOAN WORKOUT OPTIONS | ||||||
19 | AVAILABLE TO YOU. ALSO, IT MAY BE IN YOUR BEST INTEREST TO SEEK | ||||||
20 | APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 120 30 | ||||||
21 | DAYS FROM THE DATE YOUR MORTGAGE LOAN BECAME DELINQUENT, WHICH | ||||||
22 | IS (INSERT DATE OF DELINQUENCY) OF THIS NOTICE TO OBTAIN | ||||||
23 | APPROVED HOUSING COUNSELING . DURING THE 120-DAY GRACE PERIOD, | ||||||
24 | THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. | ||||||
25 | YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU | ||||||
26 | OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING |
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1 | AGENCY.
A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED | ||||||
2 | FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL | ||||||
3 | REGULATION." . | ||||||
4 | The written notice shall also list the United States | ||||||
5 | Department of Housing and Urban Development (HUD) toll-free | ||||||
6 | telephone number to access homeownership counselors or | ||||||
7 | counseling organizations; the Illinois Department of Financial | ||||||
8 | and Professional Regulation's Department's current consumer | ||||||
9 | hotline and its , the Department's website ; , and the customer | ||||||
10 | service telephone number, fax number, website and mailing | ||||||
11 | address of the mortgagee or its servicer . The written notice | ||||||
12 | shall also include a statement providing brief descriptions of | ||||||
13 | the loss mitigation options that may be available from the | ||||||
14 | mortgagee or its servicer. No language, other than language | ||||||
15 | substantially similar to the language prescribed in this | ||||||
16 | subsection (c), shall be included in the written notice. | ||||||
17 | Notwithstanding any other provision to the contrary, the | ||||||
18 | written notice and grace period notice required by this | ||||||
19 | subsection (c) may be combined with run concurrently with a | ||||||
20 | counseling notification , grace period, or any related | ||||||
21 | requirements required under federal law. | ||||||
22 | The sending of the written notice required under this | ||||||
23 | subsection (c) means depositing or causing to be deposited into | ||||||
24 | the United States mail an envelope with first class postage | ||||||
25 | prepaid that contains the document to be delivered. The | ||||||
26 | envelope shall be addressed to the mortgagor at the common |
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1 | address of the residential real estate securing the mortgage. | ||||||
2 | (d) Until 30 days after mailing the written notice required | ||||||
3 | by provided for under subsection (c) of this Section has been | ||||||
4 | provided , and no sooner than 120 days after the mortgagor | ||||||
5 | became delinquent, no legal action shall be instituted under | ||||||
6 | this Part 15 of Article XV of the Code of Civil Procedure . If a | ||||||
7 | party's action under this Part is based upon a violation of a | ||||||
8 | mortgagor's due-on-sale clause or if the party is joining an | ||||||
9 | action of a subordinate lienholder, this Section does not apply | ||||||
10 | to that action. | ||||||
11 | (e) If, within the 30-day period provided under subsection | ||||||
12 | (d) of this Section, an approved counseling agency provides | ||||||
13 | written notice to the mortgagee that the mortgagor is seeking | ||||||
14 | approved counseling services, then no legal action under Part | ||||||
15 | 15 of Article XV of the Code of Civil Procedure shall be | ||||||
16 | instituted for 30 days after the date of that notice. The date | ||||||
17 | that such notice is sent shall be stated in the notice, and | ||||||
18 | shall be sent to the address or fax number contained in the | ||||||
19 | grace period notice required under subsection (c) of this | ||||||
20 | Section. During the 30-day period provided under this | ||||||
21 | subsection (e), the mortgagor or counselor or both may prepare | ||||||
22 | and proffer to the mortgagee a proposed sustainable loan | ||||||
23 | workout plan. The mortgagee will then determine whether to | ||||||
24 | accept the proposed sustainable loan workout plan. If the | ||||||
25 | mortgagee and the mortgagor agree to a sustainable loan workout | ||||||
26 | plan, then no legal action under this Part 15 of Article XV of |
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1 | the Code of Civil Procedure shall be instituted for as long as | ||||||
2 | the sustainable loan workout plan is complied with by the | ||||||
3 | mortgagor. | ||||||
4 | The agreed sustainable loan workout plan and any | ||||||
5 | modifications thereto must be in writing and signed by the | ||||||
6 | mortgagee and the mortgagor. | ||||||
7 | Upon written notice to the mortgagee, the mortgagor may | ||||||
8 | change approved counseling agencies, but such a change does not | ||||||
9 | entitle the mortgagor to any additional period of forbearance. | ||||||
10 | (f) If the mortgagor fails to comply with the sustainable | ||||||
11 | loan workout plan, then nothing in this Section shall be | ||||||
12 | construed to impair the legal rights of the mortgagee to | ||||||
13 | enforce the contract. | ||||||
14 | (g) A counselor employed by a housing counseling agency or | ||||||
15 | the housing counseling agency that in good faith provides | ||||||
16 | counseling shall not be liable to a mortgagee or mortgagor for | ||||||
17 | civil damages, except for willful or wanton misconduct on the | ||||||
18 | part of the counselor in providing the counseling. | ||||||
19 | (h) There shall be no waiver of any provision of this | ||||||
20 | Section. | ||||||
21 | (i) It is the General Assembly's intent that compliance | ||||||
22 | with this Section shall not prejudice a mortgagee in ratings of | ||||||
23 | its bad debt collection or calculation standards or policies. | ||||||
24 | (j) This Section does shall not apply , or shall cease to | ||||||
25 | apply, to residential real estate that is not occupied as a | ||||||
26 | principal residence by an individual who is a signatory on the |
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1 | mortgage at the time the duty to mail the written notice | ||||||
2 | described in subsection (c) arises the mortgagor . | ||||||
3 | (k)(1) While any mortgagor is a debtor in bankruptcy under | ||||||
4 | title 11 of the United States Code, a mortgagee or its servicer | ||||||
5 | with regard to the mortgage is exempt from the written notice | ||||||
6 | required by subsection (c) of this Section if no loss | ||||||
7 | mitigation option is available or if any mortgagor has provided | ||||||
8 | a notification pursuant to the Fair Debt Collection Practices | ||||||
9 | Act (FDCPA), Section 805(c) (15 U.S.C. 1692c(c)), with respect | ||||||
10 | to the mortgage as referenced in subsection (l) of this | ||||||
11 | Section. If the conditions of this paragraph (1) are not met, | ||||||
12 | the mortgagee or its servicer must comply with the written | ||||||
13 | notice required by subsection (c) of this Section as modified | ||||||
14 | by paragraph (2) of this subsection (k). | ||||||
15 | (2) If a mortgagor is delinquent when the mortgagor becomes | ||||||
16 | a debtor in bankruptcy, a mortgagee or its servicer must | ||||||
17 | provide the written notice required by subsection (c) of this | ||||||
18 | Section not later than the 45th day after the mortgagor files a | ||||||
19 | bankruptcy petition under Title 11 of the United States Code. | ||||||
20 | If the mortgagor is not delinquent when the mortgagor files a | ||||||
21 | bankruptcy petition, but subsequently becomes delinquent while | ||||||
22 | a debtor in bankruptcy, the mortgagee or its servicer must | ||||||
23 | provide the written notice not later than the 45th day of the | ||||||
24 | mortgagor's delinquency. A mortgagee or its servicer must | ||||||
25 | comply with these timing requirements regardless of whether the | ||||||
26 | mortgagee or servicer provided the written notice in the |
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1 | preceding 180-day period. | ||||||
2 | A mortgagee or its servicer is not required to provide | ||||||
3 | written notice under subsection (c) of this Section more than | ||||||
4 | once during a single bankruptcy case. | ||||||
5 | (3) Except as provided in paragraph (4) of this subsection | ||||||
6 | (k), a mortgagee or its servicer that was exempt from the | ||||||
7 | written notice required by subsection (c) of this Section | ||||||
8 | pursuant to paragraph (1) of this subsection (k) must resume | ||||||
9 | compliance with the written notice required by subsection (c) | ||||||
10 | of this Section after the next payment due date that follows | ||||||
11 | the earliest of the following events: (i) the bankruptcy case | ||||||
12 | is dismissed, (ii) the bankruptcy case is closed, or (iii) the | ||||||
13 | mortgagor reaffirms personal liability for the mortgage. | ||||||
14 | (4) With respect to a mortgage for which the mortgagor has | ||||||
15 | discharged personal liability pursuant to 11 U.S.C. 727, 1141, | ||||||
16 | 1228, or 1328, the mortgagee or its servicer must resume | ||||||
17 | compliance with the written notice required by subsection (c) | ||||||
18 | of this Section if the mortgagor has made any partial or | ||||||
19 | periodic payment on the mortgage after the commencement of the | ||||||
20 | mortgagor's bankruptcy case. | ||||||
21 | (l) With regard to a mortgage for which a mortgagor has | ||||||
22 | provided notification pursuant to the Fair Debt Collection | ||||||
23 | Practices Act (FDCPA), Section 805(c) (15 U.S.C. 1692c(c)), the | ||||||
24 | mortgagee or its servicer subject to the FDCPA with respect to | ||||||
25 | that mortgagor's loan: | ||||||
26 | (1) is exempt from the requirements of the written |
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1 | notice under subsection (c) of this Section if no loss | ||||||
2 | mitigation option is available, or while a mortgagor is a | ||||||
3 | debtor in bankruptcy under Title 11 of the United States | ||||||
4 | Code as referenced in subsection (k) of this Section; and | ||||||
5 | (2) if the conditions of paragraph (1) of this | ||||||
6 | subsection (l) are not met, the mortgagee or its servicer | ||||||
7 | must comply with the requirements of the written notice | ||||||
8 | under subsection (c) of this Section as modified by this | ||||||
9 | paragraph (2): (i) In addition to the information contained | ||||||
10 | in the written notice required by subsection (c) of this | ||||||
11 | Section, the notice must include a statement as follows: | ||||||
12 | "(Name of the mortgagee or its servicer) intends to invoke | ||||||
13 | its specified remedy of foreclosure."; and (ii) The | ||||||
14 | mortgagee or its servicer is prohibited from providing the | ||||||
15 | written notice more than once during any 180-day period. | ||||||
16 | (m) (k) This Section is repealed July 1, 2027 2016 .
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17 | (n) This reenacted Section applies to causes of action that | ||||||
18 | arise on or after the effective date of this amendatory Act of | ||||||
19 | the 100th General Assembly. | ||||||
20 | (Source: P.A. 98-25, eff. 6-20-13.)
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21 | Section 99. Effective date. This Act takes effect upon | ||||||
22 | becoming law.".
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