Rep. Karen A. Yarbrough

Filed: 3/8/2011





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2    AMENDMENT NO. ______. Amend House Bill 1108 by replacing
3everything after the enacting clause with the following:
4    "Section 1. Findings. The General Assembly finds that
5additional action is needed to help prevent foreclosures and
6revitalize the economy in the State of Illinois. Foreclosures
7are leaving families homeless or in dire financial straits.
8Many borrowers could receive loan modifications under their
9existing mortgage, which would help to alleviate this crisis,
10keep families in their homes, and save Illinois neighborhoods
11and communities from further damage. Many foreclosures could be
12prevented with a modest investment in prevention activities,
13including, outreach to borrowers and court-sponsored mediation
14to help borrowers and lenders arrive at mutually-agreeable loan
15modifications. Foreclosed properties contribute to the number
16of vacant, abandoned, and tax-delinquent properties that
17threaten communities around the State because those properties



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1diminish property values, enable crime, and create health
2hazards. Such properties also impose large costs on
3municipalities and, at the same time, result in decreased
4revenue for the municipalities. The need exists to address the
5problems of vacant and abandoned property in a coordinated
6manner and to foster the development of such property and
7promote economic growth. Municipalities lack tools necessary
8to ensure that vacant properties are adequately maintained and
9secured. Land banks are one of the tools that can be used by
10communities to facilitate the return of vacant, abandoned, and
11tax-delinquent properties to productive use. Local governments
12should be empowered to create land banks to acquire, develop,
13maintain, and dispose of vacant and abandoned properties that
14present a threat to communities around the State. Abandoned
15properties may remain in the foreclosure process for a year or
16more, which harms both communities and financial institutions
17with a legal interest in the property. The foreclosure process
18for abandoned properties should be expedited to help return the
19properties to productive use.
20    Section 3. Short title. This Act may be cited as the
21Illinois Land Banking Act.
22    Section 5. Definitions.
23    "Authority" means the land bank authority created pursuant
24to this Act.



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1    "Governmental unit" means a county or municipality.
2    "Intergovernmental agreement" means a contractual
3agreement between 2 or more governmental agencies, including,
4but not limited to, an agreement to jointly exercise any power,
5privilege, or authority that agencies share in common and that
6each might exercise separately under this Act.
7    Section 10. Authorization. A municipality may create a land
8bank authority with the powers and restrictions specified in
9this Act. In creating an authority, the municipality shall
10provide for all of the following:
11        (1) Articles of incorporation for the authority, that
12    shall be filed with the Secretary of State and shall
13    include, in addition to other required and permissible
14    articles, an article specifying that the purpose of the
15    land bank authority is to stabilize communities by:
16            (A) Acquiring property that is vacant or abandoned
17        and in the foreclosure process or is otherwise
18        nonrevenue-generating or nontax-producing.
19            (B) Facilitating the reclamation, rehabilitation,
20        and reutilization of property that is vacant,
21        abandoned, in process of foreclosure, or is otherwise
22        nonrevenue-generating or nontax-producing.
23            (C) Efficiently holding and managing property that
24        is vacant, abandoned, in process of foreclosure, or is
25        otherwise nonrevenue-generating or nontax-producing



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1        pending its reclamation, rehabilitation, and
2        reutilization.
3        (2) The size of the board of directors for the
4    authority, which shall be composed of an odd number of
5    members.
6        (3) The qualifications, methods of selection, and
7    terms of office of the board members.
8    Two or more governmental units may elect to enter into an
9intergovernmental agreement that creates a single land bank to
10act on behalf of the governmental units, and the agreement
11shall be authorized by and be in accordance with the provisions
12of this Section.
13    Section 15. Board of directors; conflicts of interest. The
14authority shall be governed by a board of directors. The board
15shall consist of 3 or more directors. The board of directors
16shall be composed of an odd number of members. The size of the
17board may be adjusted in accordance with the land bank's
19    Notwithstanding any law to the contrary, any public officer
20shall be eligible to serve as a board member and the acceptance
21of the appointment shall neither terminate nor impair such
22public office. For the purposes of this Section, "public
23officer" means a person who is elected to a State or local
24government office.
25    Any State or local government employee shall be eligible to



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1serve as a board member.
2    The board of the authority shall meet from time to time as
3required, and the presence of a majority of the board of
4directors shall constitute a quorum. A chairperson shall be
5elected from among the members, and he or she shall execute all
6deeds, leases, and contracts of the authority when authorized
7by the board. The board of the authority shall conduct meetings
8in accordance with the Open Meetings Act. The board of the
9authority shall adopt a code of ethics for its directors,
10officers, and employees. The board of the authority shall
11establish policies and procedures requiring the disclosure of
12relationships that may give rise to a conflict of interest.
13    Members of a board shall not be liable personally for the
14obligations of the land bank, and the rights of creditors shall
15be solely against the land bank.
16    Members of the board must file written statements of
17economic interest in accordance with Section 4A-101 of the
18Illinois Governmental Ethics Act.
19    The board of the authority shall require that any member of
20the board with a direct or indirect interest in any matter
21disclose the member's interest to the board before the board
22takes any action on that matter.
23    Members of the board of directors of an authority shall
24serve without compensation.
25    It shall be unlawful for a member of the board, the spouse
26of a member of the board, or an immediate family member of a



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1member of the board to have or acquire a contract or have or
2acquire a direct pecuniary interest in a contract with the
3authority that relates to the authority. Any of these contracts
4shall be deemed null and void. The limitations shall remain in
5force for one year after the conclusion of the person's term of
7    If a member of the board, the spouse of a member of the
8board, or an immediate family member of a member of the board
9is entitled to receive distributable income of a partnership,
10association, corporation, or other business entity, then it is
11unlawful for that partnership, association, corporation, or
12other business entity to have or acquire a contract or a direct
13pecuniary interest in a contract with the authority that
14relates to the authority. Any of these contracts shall be
15deemed null and void. The limitations shall remain in force for
16one year after the conclusion of the person's term of office.
17    Section 20. Powers. The authority may perform any or all
18of the powers enumerated in this Section, subject to any
19conditions, restrictions, or limitations of the governmental
20unit, including the power to:
21        (a) Acquire property pursuant to Section 25 of this
22    Act.
23        (b) Adopt, amend, and repeal bylaws for the regulation
24    of its affairs and the conduct of its business.
25        (c) Sue and be sued in its own name and plead and be



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1    impleaded, including, but not limited to, defending the
2    authority in an action to clear title to property conveyed
3    by the authority.
4        (d) Take any action, provide any notice, or instate any
5    proceeding required to clear or quiet title to property
6    held by the authority in order to establish ownership by
7    and vest title to property in the authority.
8        (e) Be made party to and defend any action or
9    proceeding concerning title claims against property held
10    by the authority.
11        (f) Subject to the written approval of the board of
12    directors and the municipality that created the authority
13    under this Act, borrow money and issue bonds and notes.
14        (g) Enter into contracts and other instruments
15    necessary, incidental, or convenient to the performance of
16    its duties and the exercise of its powers, including, but
17    not limited to, intergovernmental agreements, for the
18    joint exercise of power under this Act.
19        (h) Enter into contracts for the management of, the
20    collection of rent from, and the sale of real property held
21    by an authority.
22        (i) Enter into contracts with other entities, public or
23    private, for the provision of all or a portion of the
24    services necessary for the management and operation of the
25    authority.
26        (j) Solicit and accept gifts, grants, labor, loans, and



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1    other aid from any person, the federal government, this
2    State, a political subdivision of this State or any agency
3    of the federal government, or an intergovernmental entity
4    created under the laws of this State or participate in any
5    other way in a program of the federal government, this
6    State, a political subdivision of this State, or an
7    intergovernmental entity created under the laws of this
8    State.
9        (k) Procure insurance against loss in connection with
10    the property, assets, or activities of the authority.
11        (l) Control, hold, manage, maintain, operate, repair,
12    lease as lessor, secure, prevent the waste or deterioration
13    of, demolish, and take all other actions necessary to
14    preserve the value of the property it holds or owns.
15        (m) Remediate environmental contamination on any
16    property held by the authority.
17        (n) Fix, charge, and collect rents, fees, and charges
18    for use of property under the control of the authority or
19    for services provided by the authority.
20        (o) Grant or acquire a license, easement, or option
21    with respect to property as the authority determines is
22    reasonably necessary to achieve the purposes of the Act.
23        (p) Pay any tax or special assessment due on property
24    acquired or owned by the authority.
25        (q) Subject to the Public Funds Investment Act, invest
26    money of the authority, at the discretion of the board of



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1    directors of the authority, in instruments, obligations,
2    securities, or property determined proper by the board of
3    directors of the authority, and name and use depositories
4    for its money.
5        (r) Employ its own employees or use employees of the
6    authorizing municipality or employees of the parties to
7    intergovernmental agreements.
8        (s) Employ legal and technical experts, other
9    officers, agents, or employees and pay them from the funds
10    of the authority and determine the qualifications, duties,
11    and compensation of those it employs.
12        (t) The board of directors of an authority may delegate
13    to one or more of its members, officers, agents, or
14    employees any powers or duties it considers proper.
15        (u) Reimburse members of the board of directors of the
16    authority for actual and necessary expenses subject to
17    available appropriations.
18        (v) Contract for goods and services and engage
19    personnel as necessary and engage the services of private
20    consultants, managers, legal counsel, engineers, accounts,
21    and auditors for rendering professional financial
22    assistance and advice payable out of any money available to
23    the authority.
24        (w) Prepare the reports or plans the authority
25    considers necessary to assist it in the exercise of its
26    powers under this Act and to monitor and evaluate progress



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1    under this Act.
2        (x) Extinguish taxes pursuant to Section 35 of this
3    Act.
4        (y) Convey, sell, transfer, exchange, lease as lessor,
5    or otherwise dispose of property, rights, or interests in
6    property to which the authority holds a legal interest to
7    any public or private person for value determined by the
8    authority.
9    An authority shall not exercise the power of eminent
11    The powers granted by this Act are in addition to the
12powers granted by any other law, statute, or charter.
13    Section 25. Acquisition of property. The authority may
14acquire real property or rights or interests in real property
15by gift, devise, transfer, exchange, foreclosure, purchase,
16purchase contracts, lease purchase agreements, installment
17sales contracts, land contracts, or otherwise on terms and
18conditions and in a manner the authority considers proper.
19    The authority may hold and own in its name any property
20acquired by it or conveyed to it by this State, a foreclosing
21governmental unit, a unit of local government, an
22intergovernmental entity created under the laws of this State,
23or any other public or private person, including, but not
24limited to, property without clear title.
25    The authority may only acquire property within the



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1jurisdiction of one of the municipalities granting the
2authority power under this Act or within the jurisdiction of a
3governmental entity pursuant to an intergovernmental agreement
4with that governmental entity. A property outside the corporate
5limits of a municipality is not considered within the
6jurisdiction of the municipality until annexation is completed
7pursuant to Section 7-1-1 of the Illinois Municipal Code.
8    All deeds, mortgages, contracts, leases, purchases, or
9other agreements regarding property of an authority, including
10agreements to acquire or dispose of real property, shall be
11approved by and executed in the name of the authority.
12    The authority shall have the right to purchase properties
13at tax sales conducted in accordance with Division 3.5 of the
14Property Tax Code.
15        (1) The authority may tender a bid at a tax sale that
16    is a credit bid, consisting of the obligation of the
17    authority to satisfy the component parts of the bid by
18    payments to the respective political subdivisions.
19        (2) A bid by the authority at a tax sale for the
20    minimum amount shall take priority over all other bids for
21    the same property.
22    Section 30. Financing of land bank operations. A land bank
23may receive funding through grants and loans from the
24governmental unit that created the land bank, from other
25municipalities, from the State of Illinois, from the federal



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1government, and from other public and private sources.
2    A land bank may receive and retain payments for services
3rendered, for rents and leasehold payments received, for
4consideration for disposition of real and personal property,
5for proceeds of insurance coverage for losses incurred, for
6income from investments, and for any other asset and activity
7lawfully permitted to a land bank under this Act
8    A municipality may authorize the remittance of a portion of
9the real property taxes collected on real property conveyed by
10a land bank authority. Up to 50% of those taxes may be remitted
11to the land bank authority for up to 5 years after the land
12bank has completed the conveyance of the property.
13    A land bank shall have power to issue bonds for any of its
14corporate purposes, the principal and interest of which are
15payable from its revenues generally. Any of the bonds may be
16secured by a pledge of any revenues, including grants or
17contributions, or by a mortgage of any property of the land
19    Bonds issued by the land bank shall be authorized by
20resolution of the board and shall be limited obligations of the
21land bank; the principal and interest, costs of issuance, and
22other costs incidental thereto shall be payable solely from the
23income and revenue derived from the sale, lease, or other
24disposition of the assets of the land bank. In the discretion
25of the land bank, the bonds may be additionally secured by
26mortgage or other security device covering all or part of the



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1project from which the revenues so pledged may be derived. Any
2refunding bonds issued shall be payable from any source
3described in this Section or from the investment of any of the
4proceeds of the refunding bonds and shall not constitute an
5indebtedness or pledge of the general credit of any
6governmental unit or municipality within the meaning of any
7constitutional or statutory limitation of indebtedness, and
8each bond shall state that requirement.
9    Section 35. Taxes. When real property is acquired by the
10authority, and that real property is encumbered by a lien or
11claim for real property taxes owed to the governmental unit or
12units that created the land bank, the land bank shall have the
13power, by resolution of the board, to discharge and extinguish
14any and all liens and claims. Whenever any real property is
15acquired by a land bank, and that real property is encumbered
16by a lien or claim for real property taxes owed to the school
17district, or to a municipality other than the governmental unit
18or units that created the land bank, the land bank shall have
19the power, by resolution of the board, to discharge and
20extinguish any and all such liens or claims if and only if the
21school district, or municipality other than the governmental
22unit or units that created the land bank, and the land bank,
23have entered into an agreement authorizing such discharge and
24extinguishment. To the extent necessary and appropriate, the
25land bank shall file in appropriate public records evidence of



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1the extinguishment and dissolution of the liens or claims.
2    All moneys received by an authority as payment of taxes,
3penalties, or interest, or from the redemption or sale of
4property subject to a tax lien of any taxing unit shall be
5returned to the appropriate local tax collecting unit in which
6the property is located.
7    Property of an authority is public property devoted to an
8essential public and governmental function and purpose. Income
9of the authority is considered to be for a public and
10governmental purpose. The property of the authority and its
11income and operation are exempt from all taxes and special
12assessments of this State and all units of local government.
13Bonds or notes issued by the authority, and the interest on and
14income from those bonds and notes, are exempt from all taxation
15of this State or a unit of local government.
16    Section 40. Proceeds. Except as otherwise provided in this
17Act, as required by other law, as required under the provisions
18of a deed, or as an authority otherwise agrees, any proceeds
19received by the authority may be retained by the authority for
20the purposes of this Act.
21    Section 45. Record maintenance. The authority shall
22maintain a written inventory of all property held by the
23authority. The property shall be inventoried and classified by
24the authority according to title status and suitability for



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1use. The inventory shall be available for public inspection
2during regular business hours.
3    For each property held, the authority shall establish and
4maintain itemized records and accounts reflecting all
5transactions, expenditures, and revenues relating to all
6property held by the authority.
7    Section 50. Dissolution. The articles of incorporation
8shall specify the procedure under which a land bank authority
9may be dissolved. Upon dissolution of the land bank all real
10property, personal property, and other assets of the land bank
11shall become the assets of the governmental unit or units that
12created the land bank. In the event that 2 or more governmental
13units create a land bank authority, the withdrawal of one or
14more governmental units shall not result in the dissolution of
15the land bank unless the intergovernmental agreement so
16provides, and there is no governmental unit that desires to
17continue the existence of the land bank.
18    Section 55. The Illinois Municipal Code is amended by
19changing Section 11-20-15 and by adding Sections 11-20-15.1 and
2011-20-17 as follows:
21    (65 ILCS 5/11-20-15)
22    Sec. 11-20-15. Lien for removal costs.
23    (a) If the municipality incurs a removal cost under Section



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111-20-7, 11-20-8, 11-20-12, or 11-20-13, or 11-20-17 with
2respect to any underlying parcel, then that cost is a lien upon
3that underlying parcel. This lien is superior to all other
4liens and encumbrances, except tax liens and as otherwise
5provided in subsection (c) of this Section.
6    (b) To perfect a lien under this Section, the municipality
7must, within one year after the removal cost is incurred, file
8notice of lien in the office of the recorder in the county in
9which the underlying parcel is located or, if the underlying
10parcel is registered under the Torrens system, in the office of
11the Registrar of Titles of that county. The notice must consist
12of a sworn statement setting out:
13        (1) a description of the underlying parcel that
14    sufficiently identifies the parcel;
15        (2) the amount of the removal cost; and
16        (3) the date or dates when the removal cost was
17    incurred by the municipality.
18    If, for any one parcel, the municipality engaged in any
19removal activity on more than one occasion during the course of
20one year, then the municipality may combine any or all of the
21costs of each of those activities into a single notice of lien.
22    (c) A lien under this Section is not valid as to: (i) any
23purchaser whose rights in and to the underlying parcel arose
24after the removal activity but before the filing of the notice
25of lien; or (ii) any mortgagee, judgment creditor, or other
26lienor whose rights in and to the underlying parcel arose



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1before the filing of the notice of lien.
2    (d) The removal cost is not a lien on the underlying parcel
3unless a notice is personally served on, or sent by certified
4mail to, the person to whom was sent the tax bill for the
5general taxes on the property for the taxable year immediately
6preceding the removal activities. The notice must be delivered
7or sent after the removal activities have been performed, and
8it must: (i) state the substance of this Section and the
9substance of any ordinance of the municipality implementing
10this Section; (ii) identify the underlying parcel, by common
11description; and (iii) describe the removal activity.
12    (e) A lien under this Section may be enforced by
13proceedings to foreclose as in case of mortgages or mechanics'
14liens. An action to foreclose a lien under this Section must be
15commenced within 2 years after the date of filing notice of
17    (f) Any person who performs a removal activity by the
18authority of the municipality may, in his or her own name, file
19a lien and foreclose on that lien in the same manner as a
20municipality under this Section.
21    (g) A failure to file a foreclosure action does not, in any
22way, affect the validity of the lien against the underlying
24    (h) Upon payment of the lien cost by the owner of the
25underlying parcel after notice of lien has been filed, the
26municipality (or its agent under subsection (f)) shall release



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1the lien, and the release may be filed of record by the owner
2at his or her sole expense as in the case of filing notice of
4    (i) For the purposes of this Section:
5    "Lien cost" means the removal cost and the filing costs for
6any notice of lien under subsection (b).
7    "Removal activity" means any activity for which a removal
8cost was incurred.
9    "Removal cost" means a removal cost as defined under
10Section 11-20-7, 11-20-8, 11-20-12, or 11-20-13, or 11-20-17.
11    "Underlying parcel" means a parcel of private property upon
12which a removal activity was performed.
13    "Year" means a 365-day period.
14    (j) This Section applies only to liens filed after August
1514, 2009 (the effective date of Public Act 96-462).
16    (k) This Section shall not apply to a lien filed pursuant
17to Section 11-20-15.1.
18(Source: P.A. 96-462, eff. 8-14-09; 96-856, eff. 3-1-10;
1996-1000, eff. 7-2-10.)
20    (65 ILCS 5/11-20-15.1)
21    Sec. 11-20-15.1. Lien for costs of removal, securing, and
22enclosing on abandoned residential property.
23    (a) If the municipality elects to incur a removal cost
24pursuant to subsection (d) of Section 11-20-7, subsection (d)
25of Section 11-20-8, subsection (d) of Section 11-20-12, or



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1subsection (e) of Section 11-20-13, or subsection (g) of
211-20-17, or a securing or enclosing cost pursuant to Section
311-31-1.01 with respect to an abandoned residential property,
4then that cost is a lien upon the underlying parcel of that
5abandoned residential property. This lien is superior to all
6other liens and encumbrances, except tax liens and as otherwise
7provided in this Section.
8    (b) To perfect a lien under this Section, the municipality
9must, within one year after the cost is incurred for the
10activity, file notice of the lien in the office of the recorder
11in the county in which the abandoned residential property is
12located or, if the abandoned residential property is registered
13under the Torrens system, in the office of the Registrar of
14Titles of that county, a sworn statement setting out:
15        (1) a description of the abandoned residential
16    property that sufficiently identifies the parcel;
17        (2) the amount of the cost of the activity;
18        (3) the date or dates when the cost for the activity
19    was incurred by the municipality; and
20        (4) a statement that the lien has been filed pursuant
21    to subsection (d) of Section 11-20-7, subsection (d) of
22    Section 11-20-8, subsection (d) of Section 11-20-12,
23    subsection (e) of Section 11-20-13, subsection (g) of
24    11-20-17, or Section 11-31-1.01, as applicable.
25    If, for any abandoned residential property, the
26municipality engaged in any activity on more than one occasion



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1during the course of one year, then the municipality may
2combine any or all of the costs of each of those activities
3into a single notice of lien.
4    (c) To enforce a lien pursuant to this Section, the
5municipality must maintain contemporaneous records that
6include, at a minimum: (i) a dated statement of finding by the
7municipality that the property for which the work is to be
8performed has become abandoned residential property, which
9shall include (1) the date when the property was first known or
10observed to be unoccupied by any lawful occupant or occupants,
11(2) a description of the actions taken by the municipality to
12contact the legal owner or owners of the property identified on
13the recorded mortgage, or, if known, any agent of the owner or
14owners, including the dates such actions were taken, and (3) a
15statement that no contacts were made with the legal owner or
16owners or their agents as a result of such actions, (ii) a
17dated certification by an authorized official of the
18municipality of the necessity and specific nature of the work
19to be performed, (iii) a copy of the agreement with the person
20or entity performing the work that includes the legal name of
21the person or entity, the rate or rates to be charged for
22performing the work, and an estimate of the total cost of the
23work to be performed, (iv) detailed invoices and payment
24vouchers for all payments made by the municipality for such
25work, and (v) a statement as to whether the work was engaged
26through a competitive bidding process, and if so, a copy of all



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1proposals submitted by the bidders for such work.
2    (d) A lien under this Section shall be enforceable
3exclusively at the hearing for confirmation of sale of the
4abandoned residential property that is held pursuant to
5subsection (b) of Section 15-1508 of the Code of Civil
6Procedure and shall be limited to a claim of interest in the
7proceeds of the sale and subject to the requirements of this
8Section. Any mortgagee who holds a mortgage on the property, or
9any beneficiary or trustee who holds a deed of trust on the
10property, may contest the lien or the amount of the lien at any
11time during the foreclosure proceeding upon motion and notice
12in accordance with court rules applicable to motions generally.
13Grounds for forfeiture of the lien or the superior status of
14the lien granted by subsection (a) of this Section shall
15include, but not be limited to, a finding by the court that:
16(i) the municipality has not complied with subsection (b) or
17(c) of this Section, (ii) the scope of the work was not
18reasonable under the circumstances, (iii) the work exceeded the
19authorization for the work to be performed under subsection (a)
20of Section 11-20-7, subsection (a) of Section 11-20-8,
21subsection (a) of Section 11-20-12, subsection (a) of Section
2211-20-13, or subsection (a) of Section 11-31-1.01, as
23applicable, or (iv) the cost of the services rendered or
24materials provided was not commercially reasonable. Forfeiture
25of the superior status of the lien otherwise granted by this
26Section shall not constitute a forfeiture of the lien as a



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1subordinate lien.
2    (e) Upon payment of the amount of a lien filed under this
3Section by the mortgagee, servicer, owner, or any other person,
4the municipality shall release the lien, and the release may be
5filed of record by the person making such payment at the
6person's sole expense as in the case of filing notice of lien.
7    (f) Notwithstanding any other provision of this Section, a
8municipality may not file a lien pursuant to this Section for
9activities performed pursuant to Section 11-20-7, Section
1011-20-8, Section 11-20-12, Section 11-20-13, or Section
1111-31-1.01, if: (i) the mortgagee or servicer of the abandoned
12residential property has provided notice to the municipality
13that the mortgagee or servicer has performed or will perform
14the remedial actions specified in the notice that the
15municipality otherwise might perform pursuant to subsection
16(d) of Section 11-20-7, subsection (d) of Section 11-20-8,
17subsection (d) of Section 11-20-12, subsection (e) of Section
1811-20-13, or Section 11-31-1.01, provided that the remedial
19actions specified in the notice have been performed or are
20performed or initiated in good faith within 30 days of such
21notice; or (ii) the municipality has provided notice to the
22mortgagee or servicer of a problem with the property requiring
23the remedial actions specified in the notice that the
24municipality otherwise would perform pursuant to subsection
25(d) of Section 11-20-7, subsection (d) of Section 11-20-8,
26subsection (d) of Section 11-20-12, subsection (e) of Section



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111-20-13, or Section 11-31-1.01, and the mortgagee or servicer
2has performed or performs or initiates in good faith the
3remedial actions specified in the notice within 30 days of such
5    (g) This Section and subsection (d) of Section 11-20-7,
6subsection (d) of Section 11-20-8, subsection (d) of Section
711-20-12, subsection (e) of Section 11-20-13, subsection (g) of
811-20-17, or Section 11-31-1.01 shall apply only to activities
9performed, costs incurred, and liens filed after the effective
10date of this amendatory Act of the 96th General Assembly.
11    (h) For the purposes of this Section and subsection (d) of
12Section 11-20-7, subsection (d) of Section 11-20-8, subsection
13(d) of Section 11-20-12, subsection (e) of Section 11-20-13,
14subsection (g) of 11-20-17, or Section 11-31-1.01:
15    "Abandoned residential property" means any type of
16permanent residential dwelling unit, including detached single
17family structures, and townhouses, condominium units and
18multifamily rental apartments covering the entire property,
19and manufactured homes treated under Illinois law as real
20estate and not as personal property, that has been unoccupied
21by any lawful occupant or occupants for at least 90 days, and
22for which after such 90 day period, the municipality has made
23good faith efforts to contact the legal owner or owners of the
24property identified on the recorded mortgage, or, if known, any
25agent of the owner or owners, and no contact has been made. A
26property for which the municipality has been given notice of



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1the order of confirmation of sale pursuant to subsection (b-10)
2of Section 15-1508 of the Code of Civil Procedure shall not be
3deemed to be an abandoned residential property for the purposes
4of subsection (d) of Section 11-20-7, subsection (d) of Section
511-20-8, subsection (d) of Section 11-20-12, subsection (e) of
6Section 11-20-13, subsection (g) of 11-20-17, and Section
711-31-1.01 of this Code.
8    "MERS program" means the nationwide Mortgage Electronic
9Registration System approved by Fannie Mae, Freddie Mac, and
10Ginnie Mae that has been created by the mortgage banking
11industry with the mission of registering every mortgage loan in
12the United States to lawfully make information concerning each
13residential mortgage loan and the property securing it
14available by Internet access to mortgage originators,
15servicers, warehouse lenders, wholesale lenders, retail
16lenders, document custodians, settlement agents, title
17companies, insurers, investors, county recorders, units of
18local government, and consumers.
19    (i) Any entity or person who performs a removal, securing,
20or enclosing activity pursuant to the authority of a
21municipality under subsection (d) of Section 11-20-7,
22subsection (d) of Section 11-20-8, subsection (d) of Section
2311-20-12, subsection (e) of Section 11-20-13, subsection (g) of
24Section 11-20-17, or Section 11-31-1.01, may, in its, his, or
25her own name, file a lien pursuant to subsection (b) of this
26Section and appear in a foreclosure action on that lien



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1pursuant to subsection (d) of this Section in the place of the
2municipality, provided that the municipality shall remain
3subject to subsection (c) of this Section, and such party shall
4be subject to all of the provisions in this Section as if such
5party were the municipality.
6    (i-5) All amounts received by the municipality for costs
7incurred pursuant to this Section for which the municipality
8has been reimbursed under Section 7.31 of the Illinois Housing
9Development Act shall be remitted to the State Treasurer for
10deposit into the Abandoned Residential Property Municipality
11Relief Fund.
12    (j) If prior to subsection (d) of Section 11-20-7,
13subsection (d) of Section 11-20-8, subsection (d) of Section
1411-20-12, and subsection (e) of Section 11-20-13, and
15subsection (g) of Section 11-20-17, becoming inoperative a lien
16is filed pursuant to any of those subsections, then the lien
17shall remain in full force and effect after the subsections
18have become inoperative, subject to all of the provisions of
19this Section. If prior to the repeal of Section 11-31-1.01 a
20lien is filed pursuant to Section 11-31-1.01, then the lien
21shall remain in full force and effect after the repeal of
22Section 11-31-1.01, subject to all of the provisions of this
24(Source: P.A. 96-856, eff. 3-1-10; 96-1419, eff. 10-1-10.)
25    (65 ILCS 5/11-20-17 new)



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1    Sec. 11-20-17. Vacant and abandoned property ordinances.
2    (a) For the purposes of minimizing the hazards to persons
3and property resulting from vacant and abandoned property, the
4corporate authority of each municipality may prescribe rules,
5regulations, or ordinances for the maintenance of vacant and
6abandoned property. The corporate authorities of a
7municipality may impose registration fees for vacant and
8abandoned property and fines for failure to comply with the
9rules, regulations, or ordinances enacted pursuant to this
11    (b) Pursuant to such rules, regulations, or ordinances,
12municipalities may hold responsible for failure to maintain or
13secure a vacant and abandoned property (i) any owner of the
14property, (ii) any beneficiary or trustee who holds a deed of
15trust on the property, or (iii) any mortgagee who holds a
16mortgage on the property.
17    (c) A beneficiary, trustee, or mortgagee seeking to comply
18with rules, regulations, or ordinances regarding the
19maintenance or security of vacant property may enter that
20property to remedy any potential violation of a rule,
21regulation, or ordinance to maintain or secure vacant property,
22provided such entry is not barred by an automatic stay issued
23by a bankruptcy court.
24    (d) Beneficiaries, trustees, mortgagees, and their agents
25and assignees shall be held harmless from and against all
26claims of negligence, civil trespass, and criminal trespass in



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1connection with compliance activity under the rules,
2regulations, and ordinances for the maintenance or security of
3vacant property, provided that the person authorizing or
4engaging in the compliance activity has (i) made a good faith
5effort to identify any owner and occupant of the property, and
6(ii) made a good faith effort to contact any owner and occupant
7in a manner reasonably calculated to give the owner and
8occupant notice that the compliance activity is imminent.
9    (e) For the purpose of this Section, "owner" means the
10legal or beneficial owner of an improved or unimproved parcel
11of real estate.
12    (f) For the purpose of this Section, "mortgagee" means (i)
13the holder of an indebtedness, obligee of a non-monetary
14obligation secured by a mortgage, any assignee of the mortgage,
15or any person designated or authorized to act on behalf of such
16holder, (ii) any person or entity who previously initiated a
17foreclosure on the vacant property or obtained a foreclosure
18judgment against the vacant property if the deed to vacant
19property has not been transferred to the purchaser at the
20judicial sale, or (iii) any person claiming through a mortgagee
21as successor.
22    (g) For the purpose of this section, "vacant property"
23means any property having complete or incomplete structures
24that are empty or otherwise uninhabited.
25    (h) For the purpose of this Section, "removal cost" means
26the total value of fees and fines imposed pursuant to rules,



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1regulations, or ordinances regarding maintenance, security, or
2demolition of vacant property.
3    (i) To enforce fees and fines pursuant to this Section, a
4municipality may: (i) elect to obtain a lien upon the
5underlying property for the removal cost in accordance with
6Section 11-20-15; (ii) in the case of an abandoned residential
7property as defined in Section 11-20-15.1, elect to obtain a
8lien for the removal cost pursuant to Section 11-20-15.1, in
9which case the provisions of Section 11-20-15.1 shall be the
10exclusive remedy for the removal cost; or (iii) elect to obtain
11a lien for the removal cost by exercising any enforcement
12actions available under its police powers.
13    Section 60. The Code of Civil Procedure is amended by
14changing Sections 15-1512 and by adding Section 15-1510.5 as
16    (735 ILCS 5/15-1510.5 new)
17    Sec. 15-1510.5. Mortgage Foreclosure Prevention Fee.
18    (a) Definitions.
19        "Civil legal services provider" means a not-for-profit
20    corporation that (1) employs one or more attorneys who are
21    licensed to practice law in the State of Illinois and who
22    directly provide civil legal services or (2) is established
23    for the purpose of providing civil legal services by an
24    organized panel of pro bono attorneys.



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1        "Community-based outreach" means in-person contact
2    with mortgagors in foreclosure intended to inform such
3    mortgagors about the foreclosure process and the
4    mortgagors' rights and options for assistance in the
5    process, including the availability of mortgage
6    foreclosure housing counseling and mortgage foreclosure
7    legal services.
8        "Comprehensive court-sponsored foreclosure mediation
9    programs" means programs, administered at least in part by
10    an Illinois Circuit Court, that offer mediation in actions
11    for foreclosure. Programs shall provide mortgagors access
12    to housing counseling and legal services and include
13    community-based outreach.
14        "Governmental agency" means any State, county, or
15    local government body in Illinois, and any agency or
16    instrumentality thereof, corporate or otherwise.
17        "HUD-approved housing counseling agency" means a
18    mortgage foreclosure housing counseling agency that is
19    approved by the United States Department of Housing and
20    Urban Development, or any successor agency.
21        "Mortgage foreclosure housing counseling" means
22    housing counseling provided by a mortgage foreclosure
23    counselor that works for a HUD-approved housing counseling
24    agency.
25        "Mortgage foreclosure legal services" means legal
26    services to mortgagors with an interest in a property



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1    subject to a mortgage foreclosure proceeding under Article
2    XV of the Code of Civil Procedure provided by a civil legal
3    service attorney that works for a civil legal services
4    provider.
5        "Mortgage Foreclosure Prevention Fund" means a special
6    fund used expressly to support mortgage foreclosure
7    prevention programs.
8    (b) There shall be a $500 Mortgage Foreclosure Prevention
9Fee collected from the proceeds resulting from a judicial sale
10of residential real estate conducted pursuant to a foreclosure
11judgment under this Article. The fee shall be remitted to the
12Department of Revenue by the purchaser at the time of sale and
13the Department shall deposit these amounts into the Mortgage
14Foreclosure Prevention Fund. Amounts in the Fund may be
15expended only for eligible activities described in this
17    Eligible foreclosure mitigation activities are mortgage
18foreclosure housing counseling, mortgage foreclosure legal
19services, community-based outreach, and administration of
20comprehensive court-sponsored foreclosure mediation programs.
21    Eligible entities are HUD-approved housing counseling
22agencies, civil legal services providers, not-for-profit
23corporations, and governmental agencies.
24    (c) All of the moneys in the Fund collected in counties
25with a population greater than 3,000,000 shall be used to make
26grants to eligible entities for eligible foreclosure



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1mitigation activities to be carried out in coordination with
2comprehensive court-sponsored foreclosure mediation programs
3serving residents of the county in which the funds were
4collected. At least 75% of those moneys shall be used to make
5grants to eligible entities for mortgage foreclosure housing
6counseling or mortgage foreclosure legal services.
7    (d) Moneys in the Fund collected in counties with a
8population less than 3,000,000 shall be used to make grants to
9eligible entities for eligible foreclosure mitigation
10activities serving residents of the county in which the funds
11were collected. At least 75% of those moneys shall be used to
12make grants to eligible entities for mortgage foreclosure
13housing counseling or mortgage foreclosure legal services.
14    (e) All grants shall be made by the Illinois Housing
15Development Authority (IDHA). IHDA may prescribe reasonable
16rules for the administration of this Section.
17    (735 ILCS 5/15-1512)  (from Ch. 110, par. 15-1512)
18    Sec. 15-1512. Application of Proceeds of Sale and Surplus.
19The proceeds resulting from a sale of real estate under this
20Article shall be applied in the following order:
21    (a) the reasonable expenses of sale;
22    (b) the reasonable expenses of securing possession before
23sale, holding, maintaining, and preparing the real estate for
24sale, including payment of taxes and other governmental
25charges, premiums on hazard and liability insurance,



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1receiver's and management fees, the Mortgage Foreclosure
2Prevention Fee, and, to the extent provided for in the mortgage
3or other recorded agreement and not prohibited by law,
4reasonable attorneys' fees, payments made pursuant to Section
515-1505 and other legal expenses incurred by the mortgagee;
6    (c) if the sale was pursuant to judicial foreclosure,
7satisfaction of claims in the order of priority adjudicated in
8the judgment of foreclosure or order confirming the sale; and
9    (d) remittance of any surplus to be held by the person
10appointed by the court to conduct the sale until further order
11of the court. If there is a surplus, such person conducting the
12sale shall send written notice to all parties to the proceeding
13advising them of the amount of the surplus, and that the
14surplus shall be held until a party obtains a court order for
15its distribution or until, in the absence of an order, the
16surplus is forfeited to the State.
17(Source: P.A. 86-974.)
18    Section 65. The State Finance Act is amended by adding
19Section 5.786 as follows:
20    (30 ILCS 105/5.786 new)
21    Sec. 5.786. The Mortgage Foreclosure Prevention Fund.
22    Section 99. Effective date. This Act takes effect upon
23becoming law.".