SB1998sam001 95TH GENERAL ASSEMBLY

Sen. Jacqueline Y. Collins

Filed: 4/2/2008

09500SB1998sam001 LRB095 18639 MJR 48529 a

AMENDMENT TO SENATE BILL 1998

AMENDMENT NO. ______. Amend Senate Bill 1998 on page 1, line 8, by replacing "Section 1-1.5" with "Sections 1-1.5 and 5-20 and Article VIII"; and

on page 17, immediately below line 16, by inserting the following:

"(jj) "HUD-approved housing counselor" means a counselor employed by a housing counseling agency approved by the United States Department of Housing and Urban Development."; and

on page 70, immediately below line 21, by inserting the following:

"(205 ILCS 635/5-20 new)

Sec. 5-20. Counseling prior to perfecting foreclosure proceedings.

(a) If a mortgage loan becomes delinquent by more than 30 days, the servicer shall send a notice advising the borrower that he or she may wish to seek HUD-approved housing counseling.

(b) The notice required in subsection (a) of this Section shall state the date on which the notice was mailed and state the following in 14-point type:

"YOUR LOAN IS OR WAS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK HUD-APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS FORM TO OBTAIN A HUD-APPROVED HOUSING COUNSELOR. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. A LIST OF HUD-APPROVED HOUSING COUNSELORS MAY BE OBTAINED FROM THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT OR FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION."

No language, other than the language prescribed in this subsection (b), shall be included in the notice.

(c) Upon mailing the notice provided for under subsection (b), the lender, servicer, or lender's agent shall not institute legal action under Part 15 of Article XV of the Code of Civil Procedure for 30 days. Only one 30-day period of forbearance is allowed under this subsection (c) per subject loan.

(d) If, within the 30-day period provided under subsection (c) of this Section, a HUD-approved housing counselor notifies the lender, servicer, or lender's agent that the borrower is seeking HUD-approved housing counseling, then the lender, servicer, or lender's agent shall not institute legal action under Part 15 of Article XV of the Code of Civil Procedure for 30 days after the date of that notice. During the 30-period provided under this subsection (d), the lender, servicer, or lender's agent shall attempt to agree to a debt management plan with the borrower. If the lender, servicer, or lender's agent and the borrower agree to a debt management plan, then the lender, servicer, or lender's agent shall not institute legal action under Part 15 of Article XV of the Code of Civil Procedure for as long as the debt management plan is complied with by the borrower.

The agreed debt management plan must be in writing and signed by the lender, servicer, or lender's agent, the HUD-approved housing counselor, and the borrower. No modification of an approved debt management plan can be made without the mutual agreement of the lender, servicer, or lender's agent, the HUD-approved housing counselor, and the borrower.

Upon written notice to the lender, servicer, or lender's agent, the borrower may change HUD-approved housing counselors.

(e) If the borrower fails to comply with the agreed debt management plan, then nothing in this Section shall be construed to impair the legal right of the lender, servicer, or lender's agent to enforce the contract."; and

on page 71, immediately below line 23, by inserting the following:

"(205 ILCS 635/Art. VIII heading new)

ARTICLE VIII. SERVICER REPORTING

(205 ILCS 635/8-1 new)

Sec. 8-1. Servicer reporting; requirements. A licensee acting as a servicer shall compile and submit to the Secretary on or before the twentieth business day of each month a report on a form required by the Secretary that contains all of following information for the preceding month, or as otherwise indicated:

(1) The number of mortgage loans the licensee is servicing.

(2) The number of mortgage loans that the licensee is servicing that are in payment default and a breakdown of these mortgage loans by length of payment delinquency including 30-day, 60-day, and 90-day and greater delinquencies.

(3) Information on loss mitigation activities undertaken, including, but not limited to, the following:

(A) the number and identification of mortgage loans that were refinanced into more affordable or fixed mortgage loans;

(B)the number and identification of mortgage loans for which the homeowner has sought credit or housing counseling, if known;

(C) the number of workout arrangements entered into by the licensee in connection with mortgage loans;

(D) a description of the types of workout arrangements, including mortgage loan modifications, and the percentage of each type of workout arrangement entered into; and

(E) the proactive steps taken by the licensee to identify borrowers at a heightened risk of default, such as those with impending interest rate resets, including, but not limited to, contacts with borrowers to assess their ability to repay their mortgage loan obligations.

(4) The number of foreclosure actions commenced in this State in connection with mortgage loans it is servicing.

(5) Information regarding the types and volume of adjustable rate mortgage loans that the licensee is servicing.

(6) Any other information that the Secretary may deem necessary, including geographic information regarding applicable mortgage loans.

(205 ILCS 635/8-2 new)

Sec. 8-2. Public review of reports. The Secretary may publish, for public review, the report, or any information contained in the report, required under Section 8-1 of this Act, except personally-identifying information regarding borrowers.

(205 ILCS 635/8-3 new)

Sec. 8-3. Repeal. This Article is repealed on December 31, 2010.".