Full Text of SB1998 95th General Assembly
SB1998ham001 95TH GENERAL ASSEMBLY
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Consumer Protection Committee
Filed: 5/21/2008
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09500SB1998ham001 |
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| AMENDMENT TO SENATE BILL 1998
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| AMENDMENT NO. ______. Amend Senate Bill 1998 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 1. Short title. This Act may be cited as the | 5 |
| Homeowner Protection Act. | 6 |
| Section 5. Purpose and construction. The purpose of this | 7 |
| Act is to help homeowners and communities avoid the devastating | 8 |
| effects of foreclosure. This Act is to be construed as a | 9 |
| borrower protection statute for all purposes. This Act shall be | 10 |
| liberally construed to effectuate its purpose. | 11 |
| Section 10. Definitions. As used in this Act: | 12 |
| "Approved counseling agency" means a housing counseling | 13 |
| agency approved by the U.S. Department of Housing and Urban | 14 |
| Development, a credit counseling agency approved by the | 15 |
| Secretary, or any other person or entity approved by the |
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| Secretary.
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| "Borrower" means a natural person who seeks or obtains a | 3 |
| home loan. | 4 |
| "Delinquent" means past due with respect to payments on a | 5 |
| home loan. | 6 |
| "Department" means the Department of Financial and | 7 |
| Professional Regulation. | 8 |
| "Foreclosure Prevention Report" means the report required | 9 |
| by Section 30 of this Act. | 10 |
| "Home loan" means a loan to or for the benefit of any | 11 |
| natural person made primarily for personal, family, or | 12 |
| household use, primarily secured by either a mortgage on | 13 |
| residential real property, title to a mobile home, or | 14 |
| certificates of stock or other evidence of ownership interests | 15 |
| in and proprietary leases from corporations, partnerships, or | 16 |
| limited liability companies formed for the purpose of | 17 |
| cooperative ownership of residential real property, all | 18 |
| located in this State. | 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. | 22 |
| "Secretary" means the Secretary of the Department of | 23 |
| Financial and Professional Regulation or other person | 24 |
| authorized to act in 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 or 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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| Section 15. Counseling prior to perfecting foreclosure | 15 |
| proceedings.
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| (a) Except for home loans in which any borrower has filed | 17 |
| for relief under the United States Bankruptcy Code, if a home | 18 |
| loan becomes delinquent by more than 30 days, the servicer | 19 |
| shall send a notice advising the borrower that he or she may | 20 |
| wish to seek approved credit counseling. | 21 |
| (b) The notice required in subsection (a) of this Section | 22 |
| shall state the date on which the notice was mailed, shall be | 23 |
| headed in bold, 14-point type, "GRACE PERIOD NOTICE", and shall | 24 |
| state the following in 14-point type:
"YOUR LOAN IS OR WAS MORE | 25 |
| THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL |
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| DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED | 2 |
| HOUSING OR CREDIT COUNSELING. YOU HAVE A GRACE PERIOD OF 30 | 3 |
| DAYS FROM THE DATE OF THIS FORM TO OBTAIN APPROVED HOUSING OR | 4 |
| CREDIT COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS | 5 |
| US FROM TAKING ANY LEGAL ACTION AGAINST YOU. A LIST OF APPROVED | 6 |
| COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS | 7 |
| DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION." The | 8 |
| notice shall also list the Department's current consumer | 9 |
| hotline, the Department's website, and the telephone number, | 10 |
| fax number, and mailing address of the servicer's loss | 11 |
| mitigation department. No language, other than the language | 12 |
| prescribed in this subsection (b), shall be included in the | 13 |
| notice. The requirements of this subsection (b) shall be deemed | 14 |
| satisfied if the language and format prescribed in this | 15 |
| subsection (b) is included in a counseling notification | 16 |
| required under federal law. | 17 |
| (c) Upon mailing the notice provided for under subsection | 18 |
| (b) of this Section, neither the lender, servicer, nor lender's | 19 |
| agent shall institute legal action under Part 15 of Article XV | 20 |
| of the Code of Civil Procedure for 30 days. Only one such | 21 |
| 30-day period of forbearance is allowed under this subsection | 22 |
| (c) per subject loan. | 23 |
| (d) If, within the 30-day period provided under subsection | 24 |
| (c) of this Section, an approved counseling agency notifies the | 25 |
| lender, servicer, or lender's agent that the borrower is | 26 |
| seeking approved counseling services, then the lender, |
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| servicer, or lender's agent shall not institute legal action | 2 |
| under Part 15 of Article XV of the Code of Civil Procedure for | 3 |
| 30 days after the date of that notice. During the 30-day period | 4 |
| provided under this subsection (d), the borrower or counselor | 5 |
| or both may prepare and proffer to the lender, servicer, or | 6 |
| lender's agent a proposed debt management plan. The lender, | 7 |
| servicer, or lender's agent shall then determine whether to | 8 |
| accept the proposed debt management plan, based upon an | 9 |
| evaluation of the borrower's ability to repay the loan under | 10 |
| the proffered plan, in light of the borrower's current income | 11 |
| and other financial resources. If the lender, servicer, or | 12 |
| lender's agent and the borrower agree to a debt management | 13 |
| plan, then the lender, servicer, or lender's agent shall not | 14 |
| institute legal action under Part 15 of Article XV of the Code | 15 |
| of Civil Procedure for as long as the debt management plan is | 16 |
| complied with by the borrower.
The agreed debt management plan | 17 |
| and any modifications thereto must be in writing and signed by | 18 |
| the lender, servicer, or lender's agent and the borrower.
Upon | 19 |
| written notice to the lender, servicer, or lender's agent, the | 20 |
| borrower may change approved counseling agencies, but such a | 21 |
| change does not entitle the borrower to any additional period | 22 |
| of forbearance. | 23 |
| (e) If the borrower fails to comply with the agreed debt | 24 |
| management plan, then nothing in this Section shall be | 25 |
| construed to impair the legal right of the lender, servicer, or | 26 |
| lender's agent to enforce the contract.
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| (f) This Section is repealed on December 31, 2010. | 2 |
| Section 20. Foreclosure Prevention Report; requirements. | 3 |
| (a) A servicer shall compile and submit to the Secretary on | 4 |
| or before the twentieth business day of every other month a | 5 |
| Foreclosure Prevention Report that contains the following | 6 |
| information for the preceding 2 months or as otherwise | 7 |
| indicated: | 8 |
| (1) The number of home loans the servicer is servicing. | 9 |
| (2) The number of home loans that the servicer is | 10 |
| servicing that are in payment default. | 11 |
| (3) Information on loss mitigation activities | 12 |
| undertaken, including, but not limited to, the following: | 13 |
| (A) the number and identification of home loans | 14 |
| that were refinanced into more affordable or fixed home | 15 |
| loans; | 16 |
| (B) the number and identification of home loans for | 17 |
| which the borrower has sought housing or credit | 18 |
| counseling, if known; | 19 |
| (C) the number of workout arrangements entered | 20 |
| into by the servicer in connection with home loans; and | 21 |
| (D) the proactive steps taken by the servicer to | 22 |
| identify borrowers at a heightened risk of default, | 23 |
| such as those with impending interest rate resets, | 24 |
| including, but not limited to, contacts with borrowers | 25 |
| to assess their ability to repay their home loan |
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| obligations. | 2 |
| (4) The number of foreclosure actions commenced in this | 3 |
| State in connection with home loans it is servicing.
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| (5) Any other information that the Secretary may deem | 5 |
| necessary, including geographic information regarding | 6 |
| applicable home loans. | 7 |
| (b) This Section is repealed on December 31, 2010. | 8 |
| Section 25. Foreclosure Prevention Report; publication. | 9 |
| The Secretary may publish for public review the Foreclosure | 10 |
| Prevention Report or any information contained in the | 11 |
| Foreclosure Prevention Report, except personally identifying | 12 |
| information regarding borrowers. This Section is repealed on | 13 |
| December 31, 2010. | 14 |
| Section 90. Enforcement.
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| (a) The Secretary shall have the power to issue orders | 16 |
| against any person or entity if the Secretary has reasonable | 17 |
| cause to believe that a violation of this Act has occurred, is | 18 |
| occurring, or is about to occur, if any person has violated, is | 19 |
| violating, or is about to violate any law, rule, order, or | 20 |
| written agreement with the Secretary, or for the purpose of | 21 |
| administering the provisions of this Act. | 22 |
| (b) The Secretary may impose civil penalties of up to | 23 |
| $1,000 against any person for each violation of any provision | 24 |
| of this Act. The Secretary shall also have the power to |
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| subpoena witnesses, to administer an oath, to examine any | 2 |
| person under oath, and to require the production of any | 3 |
| relevant books, papers, accounts, and documents in the course | 4 |
| of and pursuant to any investigation being conducted or any | 5 |
| action being taken by the Secretary in respect of any matter | 6 |
| relating to the duties imposed upon or the powers vested in the | 7 |
| Secretary under the provisions of this Act. | 8 |
| Section 95. No authority to make or promulgate rules. | 9 |
| Notwithstanding any other rulemaking authority that may exist, | 10 |
| neither the Governor nor any agency or agency head under the | 11 |
| jurisdiction of the Governor has any authority to make or | 12 |
| promulgate rules to implement or enforce the provisions of this | 13 |
| Act. If, however, the Governor believes that rules are | 14 |
| necessary to implement or enforce the provisions of this Act, | 15 |
| the Governor may suggest rules to the General Assembly by | 16 |
| filing them with the Clerk of the House and Secretary of the | 17 |
| Senate and by requesting that the General Assembly authorize | 18 |
| such rulemaking by law, enact those suggested rules into law, | 19 |
| or take any other appropriate action in the General Assembly's | 20 |
| discretion. Nothing contained in this Act shall be interpreted | 21 |
| to grant rulemaking authority under any other Illinois statute | 22 |
| where such authority is not otherwise explicitly given. For the | 23 |
| purposes of this Act, "rules" is given the meaning contained in | 24 |
| Section 1-70 of the Illinois Administrative Procedure Act, and | 25 |
| "agency" and "agency head" are given the meanings contained in |
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| Sections 1-20 and 1-25 of the Illinois Administrative Procedure | 2 |
| Act to the extent that such definitions apply to agencies or | 3 |
| agency heads under the jurisdiction of the Governor.".
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| Section 100. Judicial review. All final administrative | 5 |
| decisions under this Act are subject to judicial review | 6 |
| pursuant to the provisions of the Administrative Review Law and | 7 |
| any rules adopted pursuant thereto. | 8 |
| Section 105. Waiver prohibited. There shall be no waiver of | 9 |
| any provision of this Act.
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| Section 999. Effective date. This Act takes effect January | 11 |
| 1, 2009.".
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