HB1478ham001 95TH GENERAL ASSEMBLY

Rep. Daniel J. Burke

Filed: 4/17/2007

09500HB1478ham001 LRB095 06755 MJR 34978 a

AMENDMENT TO HOUSE BILL 1478

AMENDMENT NO. ______. Amend House Bill 1478 by replacing everything after the enacting clause with the following:

"Section 5. The Residential Mortgage License Act of 1987 is amended by adding Sections 4-15, 4-16, 5-6, 5-7, 5-8, 5-9, 5-10, 5-11, 5-12, 5-13, 5-14, 5-15, 5-16, and 5-17 as follows:

(205 ILCS 635/4-15 new)

Sec. 4-15. Enforcement under the Consumer Fraud and Deceptive Business Practices Act. The Attorney General may enforce any violation of Section 5-6, 5-7, 5-8, 5-9, 5-10, 5-11, 5-12, 5-13, 5-14, 5-15, or 5-16 of this Act as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act.

(205 ILCS 635/4-16 new)

Sec. 4-16. Private right of action. A borrower injured by a violation of the standards, duties, prohibitions, or requirements of Sections 5-6, 5-7, 5-8, 5-9, 5-10, 5-11, 5-12, 5-13, 5-14, 5-15, and 5-16 of this Act shall have a private right of action. The remedies and rights provided for in this Act are not exclusive, but cumulative, and all other applicable claims are specifically preserved.

(205 ILCS 635/5-6 new)

Sec. 5-6. Verification of borrower's ability to repay.

(a) No lender or loan broker may make, provide, or arrange for a residential mortgage loan without verifying the borrower's reasonable ability to pay the principal and interest on the loan, real estate taxes, homeowner's insurance, assessments, and mortgage insurance premiums, if applicable.

For residential mortgage loans in which the interest rate may vary, the reasonable ability to pay the principal and interest on the loan shall be determined based on a fully indexed rate, which rate shall be calculated by using the index rate prevailing at the time of origination of the loan plus the margin that will apply when calculating the adjustable rate under the terms of the loan, assuming a fully amortizing repayment schedule based on the term of the loan.

For loans that allow for negative amortization, the principal amount of the loan shall be calculated by including the maximum amount the principal balance may increase due to negative amortization under the terms of the loan.

(b) For all residential mortgage loans, the borrower's income and financial resources must be verified by tax returns, payroll receipts, bank records, or other similarly reliable documents. A statement by the borrower to the broker or lender of the borrower's income and resources is not sufficient to establish the existence of the income or resources when verifying the reasonable ability to pay.

(c) This Section does not apply to exempt persons or entities as defined in subsection (d) of Section 1-4 of this Act, except for those listed in item (v) of subdivision (1) of subsection (d) of Section 1-4 of this Act and their employees, notwithstanding item (1.5) of subsection (d) of Section 1-4 of this Act.

(205 ILCS 635/5-7 new)

Sec. 5-7. Broker fiduciary duty. Any person, partnership, association, corporation, or limited liability company engaged in conduct described in subsection (o) of Section 1-4 of this Act shall be considered to have created a fiduciary relationship with the borrower in all cases and shall comply with the duties imposed upon fiduciaries by statute or common law. This Section does not apply to exempt persons or entities as defined in subsection (d) of Section 1-4 of this Act, except for those listed in item (v) of subdivision (1) of subsection (d) of Section 1-4 of this Act and their employees, notwithstanding item (1.5) of subsection (d) of Section 1-4 of this Act.

(205 ILCS 635/5-8 new)

Sec. 5-8. Prepayment penalties prohibited. No lender, or person, partnership, association, corporation, or other entity who engages in the business of originating residential mortgage loans shall enter into a mortgage loan that contains a provision requiring or permitting the imposition of a penalty, fee, premium, or other charge in the event the residential mortgage loan is prepaid in whole or in part.

(205 ILCS 635/5-9 new)

Sec. 5-9. Notice of change in loan terms.

(a) No lender or loan broker may fail to do either of the following:

(1) Provide timely notice to the borrower of any material change in the terms of the residential mortgage loan. For purposes of this Section, a material change means any of the following:

(A) A change in the type of loan being offered, such as a fixed or variable rate loan or a loan with a balloon payment.

(B) A change in the term of the loan, as reflected in the number of monthly payments due before a final payment is scheduled to be made.

(C) A change in the interest rate of more than 0.15%, or an equivalent increase in the amount of discount points charged.

(D) A change in the regular monthly payment of principal and interest of more than 5%.

(E) A change regarding the escrow of taxes or insurance.

(F) A change regarding the payment of private mortgage insurance.

(2) Timely inform the borrower if any fees payable by the borrower to the lender or broker increase by more than 10% or $100, whichever is greater.

(b) The disclosures required by this Section shall be deemed timely if the lender or broker provides the borrower with the revised information not later than 24 hours after the change occurs or 24 hours before the residential mortgage loan is closed, whichever is earlier.

(c) If an increase in the total amount of the fee to be paid by the borrower to the lender or broker is not disclosed in accordance with this Section, the lender or broker, whoever received the increased fee, shall refund to the borrower the amount by which the fee was increased. If the fee is financed into the residential mortgage loan, the lender or broker shall also refund to the borrower the interest that would accrue over the term of the loan on that excess amount.

(d) This Section does not apply to exempt persons or entities as defined in subsection (d) of Section 1-4 of this Act, except for those listed in item (v) of subdivision (1) of subsection (d) of Section 1-4 of this Act and their employees, notwithstanding item (1.5) of subsection (d) of Section 1-4 of this Act.

(205 ILCS 635/5-10 new)

Sec. 5-10. Comparable monthly payment quotes. Any lender or broker, when informing a borrower of the anticipated or actual periodic payment amount for a first lien residential mortgage loan orally or in writing, must inform the borrower that an additional amount will be due for taxes and insurance and, if known, disclose to the borrower the amount of the anticipated or actual periodic escrow payments. Compliance with federal laws requiring disclosure of a periodic payment amount constitutes compliance with this Section, but only for purposes of the particular disclosure required under federal law. This Section does not apply to exempt persons or entities as defined in subsection (d) of Section 1-4 of this Act, except for those listed in item (v) of subdivision (1) of subsection (d) of Section 1-4 of this Act and their employees, notwithstanding item (1.5) of subsection (d) of Section 1-4 of this Act.

(205 ILCS 635/5-11 new)

Sec. 5-11. Requirement to provide borrower with a copy of all appraisals. Lenders must provide to the borrower a complete copy of any appraisal, including any appraisal generated using the Automated Valuation Model, obtained by the lender or loan broker for use in underwriting the residential mortgage loan not less than 14 days before the residential mortgage loan is closed. This Section does not apply to exempt persons or entities as defined in subsection (d) of Section 1-4 of this Act, except for those listed in item (v) of subdivision (1) of subsection (d) of Section 1-4 of this Act and their employees, notwithstanding item (1.5) of subsection (d) of Section 1-4 of this Act.

(205 ILCS 635/5-12 new)

Sec. 5-12. Prohibition on verbal promise to refinance on more favorable terms. No lender or loan broker shall, in order to induce a borrower to close a residential mortgage loan, represent to the borrower that the lender or broker promises or will be able to refinance the loan at a later date with more favorable terms, unless the representation is set forth in writing, states that the lender or broker is contractually bound to refinance the loan at a later date, specifies the more favorable terms, and is initialed by the borrower. This Section does not apply to exempt persons or entities as defined in subsection (d) of Section 1-4 of this Act, except for those listed in item (v) of subdivision (1) of subsection (d) of Section 1-4 of this Act and their employees, notwithstanding item (1.5) of subsection (d) of Section 1-4 of this Act.

(205 ILCS 635/5-13 new)

Sec. 5-13. Cap on delinquency charges allowed. A lender or any person, partnership, association, corporation, or limited liability company engaged in servicing may not collect, in the case of any residential mortgage loan providing for the payment thereof in 2 or more periodic installments, (i) for any loan installment in default, more than one delinquency charge on such loan installment regardless of the period during which it remains in default or (ii) any delinquency charge for any payment timely received by the lender or person engaged in servicing under a written extension or deferral agreement.

(205 ILCS 635/5-14 new)

Sec. 5-14. Prohibition on equity stripping and loan flipping. No loan broker may engage in equity stripping or loan flipping, as those terms are defined in the Illinois Fairness in Lending Act.

(205 ILCS 635/5-15 new)

Sec. 5-15. Prohibition on financing certain insurance premiums. No lender may make, provide, or arrange for a residential mortgage loan that finances, directly or indirectly, any credit life, credit disability, or credit unemployment insurance or any other life or health insurance premiums; however, insurance premiums calculated and paid on a monthly basis shall not be considered to be financed by the lender.

(205 ILCS 635/5-16 new)

Sec. 5-16. Prohibition on encouraging default. A lender or broker or any person, partnership, association, corporation, or limited liability company engaged in servicing may not recommend or encourage default or the failure to make timely payments on an existing residential mortgage loan or other debt prior to and in connection with the closing or planned closing of a residential mortgage loan that refinances all or any portion of the existing loan or debt. This Section does not apply to exempt persons or entities as defined in subsection (d) of Section 1-4 of this Act, except for those listed in item (v) of subdivision (1) of subsection (d) of Section 1-4 of this Act and their employees, notwithstanding item (1.5) of subsection (d) of Section 1-4 of this Act.

(205 ILCS 635/5-17 new)

Sec. 5-17. Severability. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application.

Section 10. The Code of Civil Procedure is amended by changing Sections 2-606, 15-1504, 15-1507, 15-1508, 15-1510, and 15-1604 and by adding Sections 15-1224, 15-1500, 15-1502.5, 15-1503.5, 15-1513, and 15-1514 as follows:

(735 ILCS 5/2-606) (from Ch. 110, par. 2-606)

Sec. 2-606. Exhibits.

(a) If a claim or defense is founded upon a written instrument, a copy thereof, or of so much of the same as is relevant, must be attached to the pleading as an exhibit or recited therein, unless the pleader attaches to his or her pleading an affidavit stating facts showing that the instrument is not accessible to him or her. In pleading any written instrument a copy thereof may be attached to the pleading as an exhibit. In either case the exhibit constitutes a part of the pleading for all purposes.

(b) If any note is required to be attached to a complaint filed pursuant to subsection (a) of Section 15-1504 of this Code, the affidavit filed by the pleader must state the following:

(1) all the holders of the note;

(2) the time each note holder held the note identified by the day, month, and year; and

(3) the reasonable efforts of the pleader to contact the note holder, which shall at minimum include the name of the representative, phone number, and address of each note holder; the date each was contacted by the pleader to ascertain whether the note holder was in possession of the note; and the reason provided by the representative that explains why the note cannot be located.

(Source: P.A. 82-280.)

(735 ILCS 5/15-1224 new)

Sec. 15-1224. Servicer. "Servicer" means any individual or entity that collects or remits or has the right or obligation to collect or remit for any lender, noteowner, noteholder, or itself payments, interest, principal, and trust items (such as hazard insurance and taxes on a residential real estate loan) in accordance with the terms of the residential real estate loan; and includes loan payment follow-up, delinquency loan follow-up, loan analysis, and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing.

(735 ILCS 5/15-1500 new)

Sec. 15-1500. Purpose. Both the mortgagee and the servicer of a residential real estate loan owe a duty of good faith and fair dealing to the mortgagor in all dealings related to the residential real estate loan. This duty includes, but is not limited to, an obligation to avoid foreclosure on a residential real estate, unless there is no other reasonable mechanism to collect on the loan secured by the mortgage. For the purposes of this Article, the servicer is the agent of the lender.

(735 ILCS 5/15-1502.5 new)

Sec. 15-1502.5. Pre-foreclosure right to cure residential real estate mortgage default.

(a) A mortgagor shall have the right to a pre-foreclosure cure of a residential real estate loan default. A mortgagor shall not be required to pay any charge, fee, or penalty attributable to the exercise of the right to cure a default as provided for in this Section. The mortgagor's payment of all amounts past due for principal, interest, escrow, and late charges, as specifically permitted in the residential real estate loan and under this Article, shall cure a default.

(b) A mortgagee or servicer must send a written notice of the pre-foreclosure right to cure, which includes the information listed in subsection (c) of this Section, to the mortgagor at least 30 days prior to accelerating a loan or filing a complaint for judicial foreclosure, whichever comes first.

(c) The notice shall clearly and conspicuously state to the mortgagor all of the following:

(1) The name and address of the mortgagee or servicer.

(2) The nature of the default claimed on the residential real estate loan and the mortgagor's right to cure the default.

(3) The sum of money required to cure the default. If the amount necessary to cure the default will change during the pre-foreclosure right to cure period due to the application of a daily interest rate or the addition of late fees as allowed by this Article, the notice shall contain an accounting that provides sufficient information to enable the mortgagor to calculate the amount at any point during the 30-day period.

(4) The name, address, and telephone number of the mortgagee or servicer whom the mortgagor may contact to request this assistance, a repayment plan, forbearance, loan modification, or another workout tool, if available.

(5) The name and telephone number of a representative of the mortgagee or servicer whom the mortgagor may contact if the mortgagor disagrees with the assertion that a default has occurred or with the calculation of the amount required to cure the default.

(6) The name, address, and phone number of a person to whom the payment or tender curing the default may be made.

(7) The mortgagee or servicer may take steps to accelerate the loan or terminate the mortgagor's ownership in the property by commencing a foreclosure suit in a court of competent jurisdiction if the mortgagor does not cure the default.

(8) Upon expiration of the pre-foreclosure right to cure period, the mortgagor shall still have the right to cure the default if the mortgagee or servicer commences a foreclosure action pursuant to Section 15-1602, 15-1603, or 15-1604 of this Code, but the mortgagor may be responsible for the mortgagee's or servicer's court costs and reasonable attorney's fees, as determined by a court of competent jurisdiction.

(9) The right, if any, of the mortgagor to transfer the real estate to another person subject to the security interest and that the transferee may have the right to cure the default as provided in this Section or Article, subject to the mortgage documents.

(10) The mortgagor is advised to seek counsel from an attorney of the mortgagor's own choosing concerning the mortgagor's residential real estate mortgage default. The mortgagor may be able to find assistance at, among others, the United States Department of Housing and Urban Development, the Legal Assistance Foundation of Metropolitan Chicago, the Land of Lincoln Legal Assistance Foundation, Prairie State Legal Services, the Illinois State Bar Association, or a county bar association by visiting the entity's website or calling its telephone number.

(11) Even if the mortgagor does not participate in the judicial proceeding, a judgment may still be entered against the residential real estate.

(d) The notice required by this Section shall be in writing or sent to the mortgagor's last known address by both first class mail and registered or certified mail, return receipt requested. The notice must also be sent by registered or certified mail, return receipt requested, to the address of the property that is the subject of the residential real estate mortgage, if different from the mortgagor's last known address. The notice is deemed to have been effectuated on the date the notice is mailed to the mortgagor.

(e) The notice required to be provided pursuant to this Section is not required if the mortgagor has voluntarily surrendered the property that is the subject of the residential real estate mortgage.

(f) The duty of the mortgagee or servicer under this Section to serve notice of the pre-foreclosure right to cure is independent of any other duty to give notice under the common law, principles of equity, State or federal statute, or a rule of court and of any other right or remedy the mortgagor may have as a result of the failure to give such notice.

(g) If a default is cured prior to the filing of a notice of foreclosure pursuant to Section 15-1505 of this Code or the initiation of any action to foreclose or to seize or transfer residential real estate as allowed under this Article, the mortgagee or servicer may not file a notice of foreclosure or institute the foreclosure proceeding or other action for that default. If a default is cured after the filing of notice of foreclosure or initiation of any action to foreclose, the mortgagee or servicer shall take such steps as are necessary to terminate the foreclosure proceeding or other action.

(735 ILCS 5/15-1503.5 new)

Sec. 15-1503.5. Payoff demands.

(a) For purposes of this Section:

"Deliver" or "delivery" means depositing or causing to be deposited into the United States mail an envelope with postage prepaid that contains a copy of the documents to be delivered and that is addressed to the person whose name and address are provided in the payoff demand. Delivery includes transmitting those documents by telefacsimile machine to the person. Delivery includes transmitting those documents electronically if the payoff demand specifically requests and authorizes that the documents be transmitted in electronic form.

"Payoff demand" means a written demand for a payoff demand statement made by a mortgagor.

"Payoff demand statement" means a written statement that is prepared in response to a written demand made by a mortgagor that sets forth the amounts required by the mortgagee or servicer to fully satisfy all of the obligations secured by the loan that is the subject of the demand.

(b) On the written demand of a mortgagor, a mortgagee or servicer shall prepare and deliver a payoff demand statement to the person who has requested it within 5 business days after receipt of the demand.

(c) The payoff demand statement shall provide the amounts required to cure the default as of the date of preparation and shall include the information reasonably necessary to calculate the payoff amount on a per diem basis.

(d) The mortgagor may rely on a payoff demand statement for the purpose of establishing the amount necessary to pay the obligation in full and obtain a release of the mortgage or deed of trust that secures the obligation through and including the time set forth in the payoff demand statement.

(e) Any sums that were due the mortgagor and that were not included in the payoff demand statement or in any amended statement constitute an unsecured obligation of the obligor and are recoverable by the mortgagor pursuant to the terms of the note and as otherwise provided by law.

(f) A mortgagee or servicer who fails to prepare and deliver a payoff demand statement for 6 or more business days after receipt of a written demand is liable to the mortgagor for all damages sustained for failure to deliver the statement.

(g) Each failure of the mortgagee or servicer to prepare and deliver the payoff demand statement when required to do so pursuant to this Section constitutes a separate cause of action. A judgment that awards a mortgagor a forfeiture or damages or both for any failure to prepare and deliver a payoff demand statement bars recovery of any other damages or forfeiture for any other failure to prepare and deliver a statement with respect to the same obligation, if the other demand for the statement was made within 6 months before or after the demand was made that resulted in the award.

(h) If the mortgagee or servicer has more than one branch, office, or other place of business, the payoff demand statement shall be made to the branch or office address provided in the payment billing notice or payment book. Unless the payoff demand statement provides otherwise, the statement is deemed to apply only to the unpaid balance of the single obligation that is named in the demand and that is secured by the mortgage or deed of trust that is payable at the address that is provided in the payment billing notice or payment book.

(i) The demand for and preparation and delivery of a payoff demand statement pursuant to this Section does not change any date or time period that is prescribed in the note or that is otherwise provided by law.

(j) The mortgage or servicer may assess a fee of no more than $1.50 for furnishing each payoff demand statement. This is conclusively presumed to be reasonable.

(735 ILCS 5/15-1504) (from Ch. 110, par. 15-1504)

Sec. 15-1504. Pleadings and service.

(a) Form of Complaint. A foreclosure complaint may be in substantially the following form:

(1) Plaintiff files this complaint to foreclose the mortgage (or other conveyance in the nature of a mortgage) (hereinafter called "mortgage") hereinafter described and joins the following person as defendants: (here insert names of all defendants).

(2) The following exhibits and documents shall be attached to the complaint:

(A) a copy of the mortgage (Exhibit "A");

(B) a copy of the note secured by the mortgage (Exhibit "B");

(C) the HUD 1 Settlement Statement reflecting the closing transaction for the loan secured by the property (Exhibit "C");

(D) a statement that identifies all prior holders of the note and the time each note holder held the note identified by the day, month, and year (Exhibit "D");

(E) a statement that identifies current and all the prior servicers of the note and the time each servicer served the note identified by the day, month, and year (Exhibit "E"); and

(F) a statement that documents all debits and credits to the mortgage account during the period of time, including, but not limited to, the application and disbursement of all payments received from or for the benefit of the mortgagor (Exhibit "F"). This statement shall also include an index of all digital or numerical codes associated with the loan history along with all definitions associated with each such code so as to make the history legible and understandable. The statement shall itemize the amount and basis for the following fees:

(i) the past due scheduled principal payments;

(ii) the interest due;

(iii) past due taxes;

(iv) hazard insurance;

(v) inspection fees;

(vi) mortgage insurance premiums;

(vii) late fees;

(viii) homeowners' association dues or assessments; and

(ix) filing fees. Attached as Exhibit "A" is a copy of the mortgage and as Exhibit "B" is a copy of the note secured thereby.

(3) Information concerning mortgage:

(A) Nature of instrument: (here insert whether a mortgage, trust deed or other instrument in the nature of a mortgage, etc.)

(B) Date of mortgage:

(C) Name of mortgagor:

(D) Name of mortgagee:

(E) Date and place of recording:

(F) Identification of recording: (here insert book and page number or document number)

(G) Interest subject to the mortgage: (here insert whether fee simple, estate for years, undivided interest, etc.)

(H) Amount of original indebtedness, including subsequent advances made under the mortgage:

(I) Both the legal description of the mortgaged real estate and the common address or other information sufficient to identify it with reasonable certainty:

(J) Statement as to defaults, including, but not necessarily limited to, date of default, current unpaid principal balance, per diem interest accruing, and any further information concerning the default:

(K) Name of present owner of the real estate:

(L) Names of other persons who are joined as defendants and whose interest in or lien on the mortgaged real estate is sought to be terminated:

(M) Names of defendants claimed to be personally liable for deficiency, if any:

(M) The specific capacity (N) Capacity in which plaintiff brings this foreclosure (here indicate whether plaintiff is the legal holder of the indebtedness, a pledgee, an agent, the trustee under a trust deed or otherwise, as appropriate):

(N) (O) Facts in support of redemption period shorter than the longer of (i) 7 months from the date the mortgagor or, if more than one, all the mortgagors (I) have been served with summons or by publication or (II) have otherwise submitted to the jurisdiction of the court, or (ii) 3 months from the entry of the judgment of foreclosure, if sought (here indicate whether based upon the real estate not being residential, abandonment, or real estate value less than 90% of amount owed, etc.):

(O) (P) Statement that the right of redemption has been waived by all owners of redemption, if applicable:

(P) (Q) Facts in support of request for attorneys' fees and of costs and expenses, if applicable:

(Q) (R) Facts in support of a request for appointment of mortgagee in possession or for appointment of receiver, and identity of such receiver, if sought:

(R) (S) Offer to mortgagor in accordance with Section 15-1402 to accept title to the real estate in satisfaction of all indebtedness and obligations secured by the mortgage without judicial sale, if sought:

(S) (T) Name or names of defendants whose right to possess the mortgaged real estate, after the confirmation of a foreclosure sale, is sought to be terminated and, if not elsewhere stated, the facts in support thereof:

REQUEST FOR RELIEF

Plaintiff requests:

(i) A judgment of foreclosure and sale.

(ii) An order granting a shortened redemption period, if sought.

(iii) A personal judgment for a deficiency, if sought.

(iv) An order granting possession, if sought.

(v) An order placing the mortgagee in possession or appointing a receiver, if sought.

(vi) A judgment for attorneys' fees, costs and expenses, if sought.

(a-5) Facts. Compliance with Section 15-1502.5 of this Code shall be set forth with facts stated in the complaint filed pursuant to this Section. If the mortgagee in any complaint seeking foreclosure of a residential real estate mortgage alleges that the property subject to the residential real estate mortgage has been abandoned or voluntarily surrendered, the mortgagee shall plead the specific facts upon which this allegation is based.

(b) Required Information. A foreclosure complaint need contain only such statements and requests called for by the form set forth in subsection (a) of Section 15-1504 as may be appropriate for the relief sought. Such complaint may be filed as a counterclaim, may be joined with other counts or may include in the same count additional matters or a request for any additional relief permitted by Article II of the Code of Civil Procedure.

(c) Allegations. The statements contained in a complaint in the form set forth in subsection (a) of Section 15-1504 are deemed and construed to include allegations as follows:

(1) on the date indicated the obligor of the indebtedness or other obligations secured by the mortgage was justly indebted in the amount of the indicated original indebtedness to the original mortgagee or payee of the mortgage note;

(2) that the exhibits attached are true and correct copies of the mortgage and note and are incorporated and made a part of the complaint by express reference;

(3) that the mortgagor was at the date indicated an owner of the interest in the real estate described in the complaint and that as of that date made, executed and delivered the mortgage as security for the note or other obligations;

(4) that the mortgage was recorded in the county in which the mortgaged real estate is located, on the date indicated, in the book and page or as the document number indicated;

(5) that defaults occurred as indicated;

(6) that at the time of the filing of the complaint the persons named as present owners are the owners of the indicated interests in and to the real estate described;

(7) that the mortgage constitutes a valid, prior and paramount lien upon the indicated interest in the mortgaged real estate, which lien is prior and superior to the right, title, interest, claim or lien of all parties and nonrecord claimants whose interests in the mortgaged real estate are sought to be terminated;

(8) that by reason of the defaults alleged, if the indebtedness has not matured by its terms, the same has become due by the exercise, by the plaintiff or other persons having such power, of a right or power to declare immediately due and payable the whole of all indebtedness secured by the mortgage;

(9) that any and all notices of default or election to declare the indebtedness due and payable or other notices required to be given have been duly and properly given;

(10) that any and all periods of grace or other period of time allowed for the performance of the covenants or conditions claimed to be breached or for the curing of any breaches have expired;

(11) that the amounts indicated in the statement in the complaint are correctly stated and if such statement indicates any advances made or to be made by the plaintiff or owner of the mortgage indebtedness, that such advances were, in fact, made or will be required to be made, and under and by virtue of the mortgage the same constitute additional indebtedness secured by the mortgage; and

(12) that, upon confirmation of the sale, the holder of the certificate of sale or deed issued pursuant to that certificate or, if no certificate or deed was issued, the purchaser at the sale will be entitled to full possession of the mortgaged real estate against the parties named in clause (T) of paragraph (3) of subsection (a) of Section 15-1504 or elsewhere to the same effect; the omission of any party indicates that plaintiff will not seek a possessory order in the order confirming sale unless the request is subsequently made under subsection (h) of Section 15-1701 or by separate action under Article 9 of this Code.

(d) Request for Fees and Costs. A statement in the complaint that plaintiff seeks the inclusion of attorneys' fees and of costs and expenses shall be deemed and construed to include allegations that:

(1) plaintiff has been compelled to employ and retain attorneys to prepare and file the complaint and to represent and advise the plaintiff in the foreclosure of the mortgage and the plaintiff will thereby become liable for the usual, reasonable and customary fees of the attorneys in that behalf;

(2) that the plaintiff has been compelled to advance or will be compelled to advance, various sums of money in payment of costs, fees, expenses and disbursements incurred in connection with the foreclosure, including, without limiting the generality of the foregoing, filing fees, stenographer's fees, witness fees, costs of publication, costs of procuring and preparing documentary evidence and costs of procuring abstracts of title, Torrens certificates, foreclosure minutes and a title insurance policy;

(3) that under the terms of the mortgage, all such advances, costs, attorneys' fees and other fees, expenses and disbursements are made a lien upon the mortgaged real estate and the plaintiff is entitled to recover all such advances, costs, attorneys' fees, expenses and disbursements, together with interest on all advances at the rate provided in the mortgage, or, if no rate is provided therein, at the statutory judgment rate, from the date on which such advances are made;

(4) that in order to protect the lien of the mortgage, it may become necessary for plaintiff to pay taxes and assessments which have been or may be levied upon the mortgaged real estate;

(5) that in order to protect and preserve the mortgaged real estate, it may also become necessary for the plaintiff to pay liability (protecting mortgagor and mortgagee), fire and other hazard insurance premiums on the mortgaged real estate, make such repairs to the mortgaged real estate as may reasonably be deemed necessary for the proper preservation thereof, advance for costs to inspect the mortgaged real estate or to appraise it, or both, and advance for premiums for pre-existing private or governmental mortgage insurance to the extent required after a foreclosure is commenced in order to keep such insurance in force; and

(6) that under the terms of the mortgage, any money so paid or expended will become an additional indebtedness secured by the mortgage and will bear interest from the date such monies are advanced at the rate provided in the mortgage, or, if no rate is provided, at the statutory judgment rate.

(e) Request for Foreclosure. The request for foreclosure is deemed and construed to mean that the plaintiff requests that:

(1) an accounting may be taken under the direction of the court of the amounts due and owing to the plaintiff;

(2) that the defendants be ordered to pay to the plaintiff before expiration of any redemption period (or, if no redemption period, before a short date fixed by the court) whatever sums may appear to be due upon the taking of such account, together with attorneys' fees and costs of the proceedings (to the extent provided in the mortgage or by law);

(3) that in default of such payment in accordance with the judgment, the mortgaged real estate be sold as directed by the court, to satisfy the amount due to the plaintiff as set forth in the judgment, together with the interest thereon at the statutory judgment rate from the date of the judgment;

(4) that in the event the plaintiff is a purchaser of the mortgaged real estate at such sale, the plaintiff may offset against the purchase price of such real estate the amounts due under the judgment of foreclosure and order confirming the sale;

(5) that in the event of such sale and the failure of any person entitled thereto to redeem prior to such sale pursuant to this Article, the defendants made parties to the foreclosure in accordance with this Article, and all nonrecord claimants given notice of the foreclosure in accordance with this Article, and all persons claiming by, through or under them, and each and any and all of them, may be forever barred and foreclosed of any right, title, interest, claim, lien, or right to redeem in and to the mortgaged real estate; and

(6) that if no redemption is made prior to such sale, a deed may be issued to the purchaser thereat according to law and such purchaser be let into possession of the mortgaged real estate in accordance with Part 17 of this Article.

(f) Request for Deficiency Judgment. A request for a personal judgment for a deficiency in a foreclosure complaint if the sale of the mortgaged real estate fails to produce a sufficient amount to pay the amount found due, the plaintiff may have a personal judgment against any party in the foreclosure indicated as being personally liable therefor and the enforcement thereof be had as provided by law.

(g) Request for Possession or Receiver. A request for possession or appointment of a receiver has the meaning as stated in subsection (b) of Section 15-1706.

(h) Answers by Parties. Any party may assert its interest by counterclaim and such counterclaim may at the option of that party stand in lieu of answer to the complaint for foreclosure and all counter complaints previously or thereafter filed in the foreclosure. Any such counterclaim shall be deemed to constitute a statement that the counter claimant does not have sufficient knowledge to form a belief as to the truth or falsity of the allegations of the complaint and all other counterclaims, except to the extent that the counterclaim admits or specifically denies such allegations.

(Source: P.A. 91-357, eff. 7-29-99.)

(735 ILCS 5/15-1507) (from Ch. 110, par. 15-1507)

Sec. 15-1507. Judicial Sale.

(a) In General. Except as provided in Sections 15-1402 and 15-1403, upon entry of a judgment of foreclosure, the real estate which is the subject of the judgment shall be sold at a judicial sale in accordance with this Section 15-1507.

(b) Sale Procedures. Upon expiration of the reinstatement period and the redemption period in accordance with subsection (b) or (c) of Section 15-1603 or upon the entry of a judgment of foreclosure after the waiver of all rights of redemption, except as provided in subsection (g) of Section 15-1506, the real estate shall be sold at a sale as provided in this Article, on such terms and conditions as shall be specified by the court in the judgment of foreclosure. A sale may be conducted by any judge or sheriff.

(c) Notice of Sale. The mortgagee, or such other party designated by the court, in a foreclosure under this Article shall give public notice of the sale as follows:

(1) The notice of sale shall include at least the following information, but an immaterial error in the information shall not invalidate the legal effect of the notice:

(A) the name, address and telephone number of the person to contact for information regarding the real estate;

(B) the common address and other common description (other than legal description), if any, of the real estate;

(C) a legal description of the real estate sufficient to identify it with reasonable certainty;

(D) a description of the improvements on the real estate;

(E) the times specified in the judgment, if any, when the real estate may be inspected prior to sale;

(F) the time and place of the sale;

(G) the terms of the sale;

(H) the case title, case number and the court in which the foreclosure was filed;

(H-1) in the case of a condominium unit to which subsection (g) of Section 9 of the Condominium Property Act applies, the statement required by subdivision (g)(5) of Section 9 of the Condominium Property Act; and

(I) such other information ordered by the Court.

(2) The notice of sale shall be published at least 3 consecutive calendar weeks (Sunday through Saturday), once in each week, the first such notice to be published not more than 45 days prior to the sale, the last such notice to be published not less than 7 days prior to the sale, by: (i) (A) advertisements in a newspaper circulated to the general public in the county in which the real estate is located, in the section of that newspaper where legal notices are commonly placed and (B) separate advertisements in the section of such a newspaper, which (except in counties with a population in excess of 3,000,000) may be the same newspaper, in which real estate other than real estate being sold as part of legal proceedings is commonly advertised to the general public; provided, that the separate advertisements in the real estate section need not include a legal description and that where both advertisements could be published in the same newspaper and that newspaper does not have separate legal notices and real estate advertisement sections, a single advertisement with the legal description shall be sufficient; and (ii) such other publications as may be further ordered by the court.

(3) The party who gives notice of public sale in accordance with subsection (c) of Section 15-1507 shall also give notice to all parties in the action who have been served with a complaint pursuant to Section 15-1504 of this Code appeared and have not theretofore been found by the court to be in default for failure to plead. Such notice shall be given in the manner provided in the applicable rules of court for service of papers other than process and complaint, not more than 45 days nor less than 7 days prior to the day of sale. After notice is given as required in this Section a copy thereof shall be filed in the office of the clerk of the court entering the judgment, together with a certificate of counsel or other proof that notice has been served in compliance with this Section.

(4) The party who gives notice of public sale in accordance with subsection (c) of Section 15-1507 shall again give notice in accordance with that Section of any adjourned sale; provided, however, that if the adjourned sale is to occur less than 60 days after the last scheduled sale, notice of any adjourned sale need not be given pursuant to this Section. In the event of adjournment, the person conducting the sale shall, upon adjournment, announce the date, time and place upon which the adjourned sale shall be held. Notwithstanding any language to the contrary, for any adjourned sale that is to be conducted more than 60 days after the date on which it was to first be held, the party giving notice of such sale shall again give notice in accordance with this Section.

(5) Notice of the sale may be given prior to the expiration of any reinstatement period or redemption period.

(6) No other notice by publication or posting shall be necessary unless required by order or rule of the court.

(7) The person named in the notice of sale to be contacted for information about the real estate may, but shall not be required, to provide additional information other than that set forth in the notice of sale.

(d) Election of Property. If the real estate which is the subject of a judgment of foreclosure is susceptible of division, the court may order it to be sold as necessary to satisfy the judgment. The court shall determine which real estate shall be sold, and the court may determine the order in which separate tracts may be sold.

(e) Receipt upon Sale. Upon and at the sale of mortgaged real estate, the person conducting the sale shall give to the purchaser a receipt of sale. The receipt shall describe the real estate purchased and shall show the amount bid, the amount paid, the total amount paid to date and the amount still to be paid therefor. An additional receipt shall be given at the time of each subsequent payment.

(f) Certificate of Sale. Upon payment in full of the amount bid, the person conducting the sale shall issue, in duplicate, and give to the purchaser a Certificate of Sale. The Certificate of Sale shall be in a recordable form, describe the real estate purchased, indicate the date and place of sale and show the amount paid therefor. The Certificate of Sale shall further indicate that it is subject to confirmation by the court. The duplicate certificate may be recorded in accordance with Section 12-121. The Certificate of Sale shall be freely assignable by endorsement thereon.

(g) Interest after Sale. Any bid at sale shall be deemed to include, without the necessity of a court order, interest at the statutory judgment rate on any unpaid portion of the sale price from the date of sale to the date of payment.

(Source: P.A. 94-1049, eff. 1-1-07.)

(735 ILCS 5/15-1508) (from Ch. 110, par. 15-1508)

Sec. 15-1508. Report of Sale and Confirmation of Sale.

(a) Report. The person conducting the sale shall promptly make a report to the court, which report shall include a copy of all receipts and, if any, certificate of sale.

(b) Hearing. Upon motion and notice in accordance with court rules applicable to motions generally, which motion shall not be made prior to sale, the court shall conduct a hearing to confirm the sale. Unless the court finds that (i) a notice required in accordance with subsection (c) of Section 15-1507 was not given, (ii) the terms of sale were unconscionable, (iii) the sale was conducted fraudulently or (iv) that justice was otherwise not done, the court shall then enter an order confirming the sale. The confirmation order may also:

(1) approve the mortgagee's fees and costs arising between the entry of the judgment of foreclosure and the confirmation hearing, those costs and fees to be allowable to the same extent as provided in the note and mortgage and in Section 15-1504;

(2) provide for a personal judgment against any party for a deficiency; and

(3) determine the priority of the judgments of parties who deferred proving the priority pursuant to subsection (h) of Section 15-1506, but the court shall not defer confirming the sale pending the determination of such priority.

(c) Failure to Give Notice. If any sale is held without compliance with subsection (c) of Section 15-1507 of this Article, any party entitled to the notice provided for in paragraph (3) of that subsection (c) who was not so notified may, by motion supported by affidavit made prior to confirmation of such sale, ask the court which entered the judgment to set aside the sale, provided that such party shall guarantee or secure by bond a bid equal to the successful bid at the prior sale. Any subsequent sale is subject to the same notice requirement as the original sale.

(d) Validity of Sale. Except as provided in subsection (c) of Section 15-1508, no sale under this Article shall be held invalid or be set aside because of any defect in the notice thereof or in the publication of the same, or in the proceedings of the officer conducting the sale, except upon good cause shown in a hearing pursuant to subsection (b) of Section 15-1508. At any time after a sale has occurred, any party entitled to notice under paragraph (3) of subsection (c) of Section 15-1507 may recover from the mortgagee any damages caused by the mortgagee's failure to comply with such paragraph (3). Any party who recovers damages in a judicial proceeding brought under this subsection may also recover from the mortgagee the reasonable expenses of litigation, including reasonable attorney's fees.

(e) Deficiency Judgment. In any order confirming a sale pursuant to the judgment of foreclosure, the court shall also enter a personal judgment for deficiency against any party (i) if otherwise authorized and (ii) to the extent requested in the complaint and proven upon presentation of the report of sale in accordance with Section 15-1508. Except as otherwise provided in this Article, a judgment may be entered for any balance of money that may be found due to the plaintiff, over and above the proceeds of the sale or sales, and enforcement may be had for the collection of such balance, the same as when the judgment is solely for the payment of money. Such judgment may be entered, or enforcement had, only in cases where personal service has been had upon the persons personally liable for the mortgage indebtedness, unless they have entered their appearance in the foreclosure action.

(f) Satisfaction. Upon confirmation of the sale, the judgment stands satisfied to the extent of the sale price less expenses and costs. If the order confirming the sale includes a deficiency judgment, the judgment shall become a lien in the manner of any other judgment for the payment of money.

(g) The order confirming the sale shall include, notwithstanding any previous orders awarding possession during the pendency of the foreclosure, an award to the purchaser of possession of the mortgaged real estate, as of the date 30 days after the entry of the order, against the parties to the foreclosure whose interests have been terminated.

An order of possession authorizing the removal of a person from possession of the mortgaged real estate shall be entered and enforced only against those persons personally named as individuals in the complaint or the petition under subsection (h) of Section 15-1701 and in the order of possession and shall not be entered and enforced against any person who is only generically described as an unknown owner or nonrecord claimant or by another generic designation in the complaint.

Notwithstanding the preceding paragraph, the failure to personally name, include, or seek an award of possession of the mortgaged real estate against a person in the confirmation order shall not abrogate any right that the purchaser may have to possession of the mortgaged real estate and to maintain a proceeding against that person for possession under Article 9 of this Code or subsection (h) of Section 15-1701; and possession against a person who (1) has not been personally named as a party to the foreclosure and (2) has not been provided an opportunity to be heard in the foreclosure proceeding may be sought only by maintaining a proceeding under Article 9 of this Code or subsection (h) of Section 15-1701.

(Source: P.A. 88-265; 89-203, eff. 7-21-95.)

(735 ILCS 5/15-1510) (from Ch. 110, par. 15-1510)

Sec. 15-1510. Attorney's Fees and Costs by Written Agreement.

(a) Attorneys' fees and other costs incurred in connection with the preparation, filing or prosecution of the foreclosure suit shall be recoverable in a foreclosure only to the extent specifically set forth in the mortgage or other written agreement between the mortgagor and the mortgagee or as otherwise provided in this Article.

(b) The mortgagor shall not be liable for any attorney's fees or other costs attributable to providing the notice required by Section 15-1502.5 of this Code.

(c) A court of competent jurisdiction may award reasonable attorney's fees to the prevailing party.

(Source: P.A. 86-974.)

(735 ILCS 5/15-1513 new)

Sec. 15-1513. Waiver. No mortgagee of a residential real estate loan may waive any of the rights in Sections 15-1502.5, 15-1504, 15-1506, 15-1507, or 15-1510 of this Code.

(735 ILCS 5/15-1514 new)

Sec. 15-1514. Severability. If any provision of this Article or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Article that can be given effect without the invalid provision or application.

(735 ILCS 5/15-1604) (from Ch. 110, par. 15-1604)

Sec. 15-1604. Special Right to Redeem.

(a) Circumstances. With respect to residential real estate, if (i) the purchaser at the sale was a mortgagee who was a party to the foreclosure or its nominee and (ii) the sale price was less than the amount specified in subsection (d) of Section 15-1603, then, and only in such circumstances, an owner of redemption as specified in subsection (a) of Section 15-1603 shall have a special right to redeem, for a period ending 60 30 days after the date the sale is confirmed, by paying to the mortgagee (i) the sale price, (ii) all additional costs and expenses incurred by the mortgagee set forth in the report of sale and confirmed by the court, and (iii) interest at the statutory judgment rate from the date the purchase price was paid or credited as an offset.

(b) Procedure. Upon receipt of such amount, the mortgagee shall assign to the redeeming owner of redemption its certificate of sale or its right to such certificate or to a deed. The mortgagee shall give to the redeeming owner of redemption an executed duplicate of such assignment, marked "Duplicate", which duplicate the owner of redemption shall file with the court. If a deed has been issued to the mortgagee or its nominee, the holder of such deed, or such holder's successor in title, shall execute and deliver a deed conveying the mortgaged real estate to the redeeming owner of redemption subject only to those encumbrances that would normally arise on title if a redemption were made under Section 15-1603, including a deficiency, if any, resulting from the foreclosure sale. Nothing contained herein shall affect the right to a personal or in rem deficiency judgment, and enforcement thereof shall be allowed as provided by law. Any deficiency judgment shall retain the same priority on title as did the mortgage from which it arose. The mortgagee, its nominee or its successors in title shall not permit encumbrances on title arising on or after the date of the deed to the mortgagee or nominee caused by or relating to the mortgagee or its nominee or its successors in title.

(Source: P.A. 86-974.)

Section 15. The Interest Act is amended by changing Section 4.1a as follows:

(815 ILCS 205/4.1a) (from Ch. 17, par. 6406)

Sec. 4.1a. Charges for and cost of the following items paid or incurred by any lender in connection with any loan shall not be deemed to be charges for or in connection with any loan of money referred to in Section 6 of this Act, or charges by the lender as a consideration for the loan referred to in this Section:

(a) hazard, mortgage or life insurance premiums, survey, credit report, title insurance, abstract and attorneys' fees, recording charges, escrow and appraisal fees, and similar charges.

(b) in the case of construction loans, in addition to the matters referred to in clause (a) above, the actual cost incurred by the lender for services for making physical inspections, processing payouts, examining and reviewing contractors' and subcontractors' sworn statements and waivers of lien and the like.

(c) in the case of any loan made pursuant to the provisions of the Emergency Home Purchase Assistance Act of 1974 (Section 313 of the National Housing Act, Chapter B of Title 12 of the United States Code), in addition to the matters referred to in paragraphs (a) and (b) of this Section all charges required or allowed by the Government National Mortgage Association, whether designated as processing fees, commitment fees, loss reserve and marketing fees, discounts, origination fees or otherwise designated.

(d) in the case of a single payment loan, made for a period of 6 months or less, a regulated financial institution or licensed lender may contract for and receive a maximum charge of $15 in lieu of interest. Such charge may be collected when the loan is made, but only one such charge may be contracted for, received, or collected for any such loan, including any extension or renewal thereof.

(e) if the agreement governing the loan so provides, a charge not to exceed the rate permitted under Section 3-806 of the Uniform Commercial Code-Commercial Paper for any check, draft or order for the payment of money submitted in accordance with said agreement which is unpaid or not honored by a bank or other depository institution.

(f) if the agreement governing the loan so provides, for each loan installment in default for a period of not less than 10 days, a charge in an amount not in excess of 5% of such loan installment. Only one delinquency charge may be collected on any such loan installment regardless of the period during which it remains in default. Payments timely received by the lender under a written extension or deferral agreement shall not be subject to any delinquency charge.

Notwithstanding subdivisions (k) and (l) of subsection (1) of Section 4 of this Act, the provisions of this Section apply to any residential mortgage loan, as defined in Section 1-4 of the Residential Mortgage License Act of 1987.

Notwithstanding subsections (k) and (l) of subsection (1) of Section 4 of this Act, the borrower, in the case of any nonexempt residential mortgage loan, as defined in Section 1-4 of the Residential Mortgage License Act of 1987, shall have the right to prepay the loan in whole or in part at any time without paying any penalty, fee, premium, or other charge.

No lender shall make, provide, or arrange for a residential mortgage loan, as that term is defined in Section 1-4 of the Residential Mortgage License Act of 1987, that finances, directly or indirectly, any credit life, credit disability, or credit unemployment insurance or any other life or health insurance premiums; however, insurance premiums calculated and paid on a monthly basis shall not be considered to be financed by the lender.

Where there is a charge in addition to the stated rate of interest payable directly or indirectly by the borrower and imposed directly or indirectly by the lender as a consideration for the loan, or for or in connection with the loan of money, whether paid or payable by the borrower, the seller, or any other person on behalf of the borrower to the lender or to a third party, or for or in connection with the loan of money, other than as hereinabove in this Section provided, whether denominated "points," "service charge," "discount," "commission," or otherwise, and without regard to declining balances of principal which would result from any required or optional amortization of the principal of the loan, the rate of interest shall be calculated in the following manner:

The percentage of the principal amount of the loan represented by all of such charges shall first be computed, which in the case of a loan with an interest rate in excess of 8% per annum secured by residential real estate, other than loans described in paragraphs (e) and (f) of Section 4, shall not exceed 3% of such principal amount. Said percentage shall then be divided by the number of years and fractions thereof of the period of the loan according to its stated maturity. The percentage thus obtained shall then be added to the percentage of the stated annual rate of interest.

The borrower in the case of nonexempt loan shall have the right to prepay the loan in whole or in part at any time, but, except as may otherwise be provided by Section 4, the lender may require payment of not more than 6 months' advance interest on that part of the aggregate amount of all prepayments on a loan in one year, which exceeds 20% of the original principal amount of the loan.

(Source: P.A. 87-496.)".