Full Text of HB2973 95th General Assembly
HB2973sam003 95TH GENERAL ASSEMBLY
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Sen. Jacqueline Y. Collins
Filed: 11/12/2008
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| AMENDMENT TO HOUSE BILL 2973
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| AMENDMENT NO. ______. Amend House Bill 2973, AS AMENDED, by | 3 |
| replacing everything after the enacting clause with the | 4 |
| following:
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| "Section 1. Short title. This Act may be cited as the | 6 |
| Homeowner Protection Act. | 7 |
| Section 5. Purpose and construction. The purpose of this | 8 |
| Act is to protect and help homeowners and communities avoid the | 9 |
| devastating effects of foreclosure. This Act is to be construed | 10 |
| as a borrower protection statute. This Act shall be liberally | 11 |
| construed to effectuate its purpose. | 12 |
| Section 10. Definitions. As used in this Act: | 13 |
| "Approved counseling agency" means a housing counseling | 14 |
| agency approved by the U.S. Department of Housing and Urban | 15 |
| Development.
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| "Borrower" means a natural person who seeks or obtains a | 2 |
| home loan. | 3 |
| "Consumer reporting agency" shall have the same meaning as | 4 |
| that term is defined in the federal Fair Credit Reporting Act. | 5 |
| "Delinquent" means past due with respect to payments on a | 6 |
| home loan. | 7 |
| "Department" means the Department of Financial and | 8 |
| Professional Regulation. | 9 |
| "Home loan" means a loan to or for the benefit of any | 10 |
| natural person made primarily for personal, family, or | 11 |
| household use, primarily secured by either a mortgage on | 12 |
| residential real property, certificates of stock, or other | 13 |
| evidence of ownership interests in and proprietary leases from | 14 |
| corporations, partnerships, or limited liability companies | 15 |
| formed for the purpose of cooperative ownership of residential | 16 |
| real property, all located in Illinois. "Home loan" does not | 17 |
| include any loan used to purchase a home in which the borrower | 18 |
| or the borrower's immediate family does not intend to reside. | 19 |
| "Lender" means any person, partnership, association, | 20 |
| corporation, or any other entity who either transfers, offers, | 21 |
| lends, or invests money in home loans.
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| "Secretary" means the Secretary of Financial and | 23 |
| Professional Regulation or other person authorized to act in | 24 |
| the Secretary's stead. | 25 |
| "Servicer" means any entity chartered under the Illinois | 26 |
| Banking Act, the Savings Bank Act, the Illinois Credit Union |
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| Act, or the Illinois Savings and Loan Act of 1985 and any | 2 |
| person or entity licensed under the Residential Mortgage | 3 |
| License Act of 1987, the Consumer Installment Loan Act, or the | 4 |
| Sales Finance Agency Act who is responsible for the collection | 5 |
| or remittance for, or has the right or obligation to collect or | 6 |
| remit for, any lender, note owner, or note holder for a | 7 |
| lender's own account of payments, interest, principal, and | 8 |
| escrow items such as hazard insurance and taxes on a | 9 |
| residential mortgage loan in accordance with the terms of the | 10 |
| home loan, including loan payment follow up, delinquency loan | 11 |
| follow up, loan analysis, and any notifications to the borrower | 12 |
| that are necessary to enable the borrower to keep the loan | 13 |
| current and in good standing.
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| "Sustainable loan workout plan" means a plan that the | 15 |
| parties believe shall enable the borrower to stay current on | 16 |
| his or her mortgage payments for the foreseeable future when | 17 |
| taking into account the borrower's income and existing and | 18 |
| foreseeable debts. A sustainable loan workout plan may include, | 19 |
| but is not limited to, (1) a temporary suspension of payments, | 20 |
| (2) a lengthened loan term, (3) a lowered or frozen interest | 21 |
| rate, (4) a principal write down, (5) a repayment plan to pay | 22 |
| the existing loan in full, or (6) refinancing into a new | 23 |
| affordable loan. | 24 |
| Section 15. Initial one-time grace period. No lender, | 25 |
| servicer, or lender's agent shall institute legal action under |
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| Part 15 of Article XV of the Code of Civil Procedure with | 2 |
| respect to a home loan at any time during the first 45 days of | 3 |
| delinquency. A borrower is entitled to only one 45-day period | 4 |
| of forbearance under this Section per subject loan. A | 5 |
| borrower's right to a 45-day period of forbearance under this | 6 |
| Section is deemed to have been exercised as of the 46th | 7 |
| consecutive day of delinquency.
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| Section 20. One-time notice and counseling grace period.
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| (a) Notwithstanding any provision to the contrary, with | 10 |
| respect to a particular home loan, a lender, servicer, or | 11 |
| lender's agent need comply with the procedures and forbearances | 12 |
| described in this Section only once per subject loan. | 13 |
| (b) Except for home loans in which any borrower has filed | 14 |
| for relief under the United States Bankruptcy Code, if a home | 15 |
| loan becomes delinquent by more than 45 days, the lender, | 16 |
| servicer, or lender's agent shall send via certified U.S. mail, | 17 |
| return receipt requested, a notice advising the borrower that | 18 |
| he or she may wish to seek approved housing counseling. | 19 |
| At the same time, the lender, servicer, or lender's agent | 20 |
| shall send the notice via at least one of the following means: | 21 |
| regular U.S. mail, express or overnight mail, personal e-mail, | 22 |
| or personal fax machine. Neither the lender, servicer, nor | 23 |
| lender's agent shall institute legal action under Part 15 of | 24 |
| Article XV of the Code of Civil Procedure before mailing the | 25 |
| notice described in this subsection (b). |
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| The notice required in this subsection (b) shall state the | 2 |
| date on which the notice was mailed, shall be headed in bold | 3 |
| 14-point type "GRACE PERIOD NOTICE", and shall state the | 4 |
| following in 14-point type:
"YOUR LOAN IS OR WAS MORE THAN 45 | 5 |
| DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT | 6 |
| MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING | 7 |
| COUNSELING. YOU HAVE A GRACE PERIOD OF 45 DAYS FROM THE DATE OF | 8 |
| THIS FORM TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE | 9 |
| GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION | 10 |
| AGAINST YOU. A LIST OF APPROVED COUNSELING AGENCIES MAY BE | 11 |
| OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND | 12 |
| PROFESSIONAL REGULATION." | 13 |
| The notice shall also list the Department's current | 14 |
| consumer hotline, the Department's website, and the telephone | 15 |
| number, fax number, and mailing address of the servicer's loss | 16 |
| mitigation department. No language, other than the language | 17 |
| prescribed in this subsection (b), shall be included in the | 18 |
| notice. The requirements of this subsection (b) shall be deemed | 19 |
| satisfied if the language and format prescribed in this | 20 |
| subsection is included in a counseling notification required | 21 |
| under federal law. | 22 |
| (c) Upon mailing the notice provided for under subsection | 23 |
| (b) of this Section, neither the lender, servicer, nor lender's | 24 |
| agent shall institute legal action under Part 15 of Article XV | 25 |
| of the Code of Civil Procedure for 45 days. | 26 |
| (d) If, within the 45-day period provided under subsection |
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| (c) of this Section, an approved counseling agency provides | 2 |
| written notice to the lender, servicer, or lender's agent that | 3 |
| the borrower is seeking approved counseling services, then the | 4 |
| lender, servicer, or lender's agent must not institute legal | 5 |
| action under Part 15 of Article XV of the Code of Civil | 6 |
| Procedure for 45 days after the date of that notice. During the | 7 |
| 45-day period provided under this subsection (d), the borrower | 8 |
| or counselor or both may prepare and proffer to the lender, | 9 |
| servicer, or lender's agent a proposed sustainable loan workout | 10 |
| plan. The lender, servicer, or lender's agent will then | 11 |
| determine whether to accept the proposed sustainable loan | 12 |
| workout plan. If the lender, servicer, or lender's agent and | 13 |
| the borrower agree to a sustainable loan workout plan, then the | 14 |
| lender, servicer, or lender's agent shall not institute legal | 15 |
| action under Part 15 of Article XV of the Code of Civil | 16 |
| Procedure for as long as the sustainable loan workout plan is | 17 |
| complied with by the borrower. | 18 |
| The agreed sustainable loan workout plan and any | 19 |
| modifications thereto must be in writing and signed by the | 20 |
| lender, servicer, or lender's agent and the borrower. | 21 |
| Upon written notice to the lender, servicer, or lender's | 22 |
| agent, the borrower may change approved counseling agencies, | 23 |
| but such a change does not entitle the borrower to any | 24 |
| additional period of forbearance. | 25 |
| (e) If the borrower fails to comply with the sustainable | 26 |
| loan workout plan, then nothing in this Section shall be |
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| construed to impair the legal right of the lender, servicer, or | 2 |
| lender's agent to enforce the contract.
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| (f) A counselor employed by a housing counseling agency or | 4 |
| the housing counseling agency that in good faith provides | 5 |
| counseling shall not be liable to a lender, servicer, lender's | 6 |
| agent, or borrower for civil damages, except for willful or | 7 |
| wanton misconduct on the part of the counselor in providing the | 8 |
| counseling. | 9 |
| Section 25. Delinquent loans. | 10 |
| (a) Loans that are delinquent by 45 days or less as of the | 11 |
| effective date of this Act shall be entitled to the 45-day | 12 |
| period of forbearance prescribed in Section 15 of this Act. The | 13 |
| 45-day period of forbearance shall begin on the effective date | 14 |
| of this Act. After the 45-day period of forbearance, the | 15 |
| borrower shall be entitled to all the protections and | 16 |
| procedures period provided for in Section 20 of this Act. | 17 |
| (b) Loans that are delinquent by more than 45 days as of | 18 |
| the effective date of this Act shall not be entitled to the | 19 |
| 45-day period of forbearance provided for in Section 15 of this | 20 |
| Act. The borrower shall be entitled to all protections and | 21 |
| procedures provided for in Section 20 of this Act. | 22 |
| Section 30. Reports to consumer reporting agencies. A | 23 |
| lender, servicer, or lender's agent that provides information | 24 |
| to a consumer reporting agency about a borrower who is or has |
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| been in a period of forbearance provided under this Act shall | 2 |
| include in the report to the consumer reporting agency that the | 3 |
| borrower is or was in a statutorily guaranteed period of | 4 |
| forbearance and shall list the dates of the forbearance. | 5 |
| Section 35. Excess demand for counseling. If the Secretary | 6 |
| finds that the demand for counseling services in any particular | 7 |
| geographic area exceeds the number of available approved | 8 |
| counseling agencies, then he or she may certify other persons | 9 |
| or entities as approved counseling agencies. Except as provided | 10 |
| for in this Section, no for-profit entities may be certified as | 11 |
| approved counseling agencies. | 12 |
| Section 40. Enforcement.
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| (a) The Secretary shall have the power to issue orders | 14 |
| against any person or entity if the Secretary has reasonable | 15 |
| cause to believe that a violation of this Act has occurred, is | 16 |
| occurring, or is about to occur, if any person has violated, is | 17 |
| violating, or is about to violate any law, rule, order or | 18 |
| written agreement with the Secretary, or for the purpose of | 19 |
| administering the provisions of this Act and any rule | 20 |
| promulgated in accordance with this Act. | 21 |
| (b) The Secretary may impose civil penalties of up to | 22 |
| $1,000 against any person for each violation of any provision | 23 |
| of this Act, any rule promulgated in accordance with this Act, | 24 |
| or any order of the Secretary. The Secretary shall also have |
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| the power to subpoena witnesses, to administer an oath, to | 2 |
| examine any person under oath, and to require the production of | 3 |
| any relevant books, papers, accounts, and documents in the | 4 |
| course of and pursuant to any investigation being conducted or | 5 |
| any action being taken by the Secretary with respect to any | 6 |
| matter relating to the duties imposed upon, or the powers | 7 |
| vested in, the Secretary under the provisions of this Act or | 8 |
| any rule promulgated in accordance with this Act. | 9 |
| (c) Any actions taken by the Secretary pursuant to this | 10 |
| Section shall be done in accordance with the Illinois | 11 |
| Administrative Procedure Act.
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| Section 45. Rulemaking. The Department may adopt rules | 13 |
| necessary for implementation and administration of this Act. | 14 |
| Section 50. Judicial review. All final administrative | 15 |
| decisions under this Act are subject to judicial review | 16 |
| pursuant to the provisions of the Administrative Review Law and | 17 |
| any rules adopted pursuant thereto.
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| Section 55. Waiver prohibited. There shall be no waiver of | 19 |
| any provision of this Act. | 20 |
| Section 97. Severability. The provisions of this Act are | 21 |
| severable under Section 1.31 of the Statute on Statutes.
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| Section 99. Effective date. This Act takes effect upon | 2 |
| becoming law.".
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