SB0056 EngrossedLRB098 02622 HEP 32627 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Code of Civil Procedure is amended by
5changing Section 15-1502.5 as follows:
 
6    (735 ILCS 5/15-1502.5)
7    (Section scheduled to be repealed on July 1, 2013)
8    Sec. 15-1502.5. Homeowner protection.
9    (a) As used in this Section:
10    "Approved counseling agency" means a housing counseling
11agency approved by the U.S. Department of Housing and Urban
12Development.
13    "Approved Housing Counseling" means in-person counseling
14provided by a counselor employed by an approved counseling
15agency to all borrowers, or documented telephone counseling
16where a hardship would be imposed on one or more borrowers. A
17hardship shall exist in instances in which the borrower is
18confined to his or her home due to medical conditions, as
19verified in writing by a physician or the borrower resides 50
20miles or more from the nearest approved counseling agency. In
21instances of telephone counseling, the borrower must supply all
22necessary documents to the counselor at least 72 hours prior to
23the scheduled telephone counseling session.

 

 

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1    "Delinquent" means past due with respect to a payment on a
2mortgage secured by residential real estate.
3    "Department" means the Department of Financial and
4Professional Regulation.
5    "Secretary" means the Secretary of Financial and
6Professional Regulation or other person authorized to act in
7the Secretary's stead.
8    "Sustainable loan workout plan" means a plan that the
9mortgagor and approved counseling agency believe shall enable
10the mortgagor to stay current on his or her mortgage payments
11for the foreseeable future when taking into account the
12mortgagor income and existing and foreseeable debts. A
13sustainable loan workout plan may include, but is not limited
14to, (1) a temporary suspension of payments, (2) a lengthened
15loan term, (3) a lowered or frozen interest rate, (4) a
16principal write down, (5) a repayment plan to pay the existing
17loan in full, (6) deferred payments, or (7) refinancing into a
18new affordable loan.
19    (b) Except in the circumstance in which a mortgagor has
20filed a petition for relief under the United States Bankruptcy
21Code, no mortgagee shall file a complaint to foreclose a
22mortgage secured by residential real estate until the
23requirements of this Section have been satisfied.
24    (c) Notwithstanding any other provision to the contrary,
25with respect to a particular mortgage secured by residential
26real estate, the procedures and forbearances described in this

 

 

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1Section apply only once per subject mortgage.
2    Except for mortgages secured by residential real estate in
3which any mortgagor has filed for relief under the United
4States Bankruptcy Code, if a mortgage secured by residential
5real estate becomes delinquent by more than 30 days the
6mortgagee shall send via U.S. mail a notice advising the
7mortgagor that he or she may wish to seek approved housing
8counseling. Notwithstanding anything to the contrary in this
9Section, nothing shall preclude the mortgagor and mortgagee
10from communicating with each other during the initial 30 days
11of delinquency or reaching agreement on a sustainable loan
12workout plan, or both.
13    No foreclosure action under Part 15 of Article XV of the
14Code of Civil Procedure shall be instituted on a mortgage
15secured by residential real estate before mailing the notice
16described in this subsection (c).
17    The notice required in this subsection (c) shall state the
18date on which the notice was mailed, shall be headed in bold
1914-point type "GRACE PERIOD NOTICE", and shall state the
20following in 14-point type: "YOUR LOAN IS MORE THAN 30 DAYS
21PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY
22BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING.
23YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE
24TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD,
25THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU.
26YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU

 

 

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1OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING
2AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED
3FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL
4REGULATION."
5    The notice shall also list the Department's current
6consumer hotline, the Department's website, and the telephone
7number, fax number, and mailing address of the mortgagee. No
8language, other than language substantially similar to the
9language prescribed in this subsection (c), shall be included
10in the notice. Notwithstanding any other provision to the
11contrary, the grace period notice required by this subsection
12(c) may be combined with a counseling notification required
13under federal law.
14    The sending of the notice required under this subsection
15(c) means depositing or causing to be deposited into the United
16States mail an envelope with first-class postage prepaid that
17contains the document to be delivered. The envelope shall be
18addressed to the mortgagor at the common address of the
19residential real estate securing the mortgage.
20    (d) Until 30 days after mailing the notice provided for
21under subsection (c) of this Section, no legal action shall be
22instituted under Part 15 of Article XV of the Code of Civil
23Procedure.
24    (e) If, within the 30-day period provided under subsection
25(d) of this Section, an approved counseling agency provides
26written notice to the mortgagee that the mortgagor is seeking

 

 

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1approved counseling services, then no legal action under Part
215 of Article XV of the Code of Civil Procedure shall be
3instituted for 30 days after the date of that notice. The date
4that such notice is sent shall be stated in the notice, and
5shall be sent to the address or fax number contained in the
6Grace Period Notice required under subsection (c) of this
7Section. During the 30-day period provided under this
8subsection (e), the mortgagor or counselor or both may prepare
9and proffer to the mortgagee a proposed sustainable loan
10workout plan. The mortgagee will then determine whether to
11accept the proposed sustainable loan workout plan. If the
12mortgagee and the mortgagor agree to a sustainable loan workout
13plan, then no legal action under Part 15 of Article XV of the
14Code of Civil Procedure shall be instituted for as long as the
15sustainable loan workout plan is complied with by the
16mortgagor.
17    The agreed sustainable loan workout plan and any
18modifications thereto must be in writing and signed by the
19mortgagee and the mortgagor.
20    Upon written notice to the mortgagee, the mortgagor may
21change approved counseling agencies, but such a change does not
22entitle the mortgagor to any additional period of forbearance.
23    (f) If the mortgagor fails to comply with the sustainable
24loan workout plan, then nothing in this Section shall be
25construed to impair the legal rights of the mortgagee to
26enforce the contract.

 

 

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1    (g) A counselor employed by a housing counseling agency or
2the housing counseling agency that in good faith provides
3counseling shall not be liable to a mortgagee or mortgagor for
4civil damages, except for willful or wanton misconduct on the
5part of the counselor in providing the counseling.
6    (h) There shall be no waiver of any provision of this
7Section.
8    (i) It is the General Assembly's intent that compliance
9with this Section shall not prejudice a mortgagee in ratings of
10its bad debt collection or calculation standards or policies.
11    (j) This Section shall not apply, or shall cease to apply,
12to residential real estate that is not occupied as a principal
13residence by the mortgagor.
14    (k) This Section is repealed July 1, 2016 2013.
15(Source: P.A. 95-1047, eff. 4-6-09; 96-1419, eff. 10-1-10.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.