Full Text of HB2004 96th General Assembly
HB2004ham001 96TH GENERAL ASSEMBLY
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Rep. André M. Thapedi
Filed: 3/17/2009
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| AMENDMENT TO HOUSE BILL 2004
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| AMENDMENT NO. ______. Amend House Bill 2004 immediately | 3 |
| above the enacting clause by inserting the following:
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| "WHEREAS, this amendatory Act of the 96th General Assembly | 5 |
| may be cited as the Emergency Foreclosure Relief Act of 2009; | 6 |
| and | 7 |
| WHEREAS, The last substantive amendments to the Illinois | 8 |
| Mortgage Foreclosure Law were adopted in 1987; and, therefore, | 9 |
| it is necessary to address the mortgage foreclosure crisis with | 10 |
| effective polices, procedures, and legislation; and | 11 |
| WHEREAS, Mortgage foreclosure filings on residential | 12 |
| properties have continued to grow at alarming rates in counties | 13 |
| with 400,000 or more residents; and | 14 |
| WHEREAS, Mortgage default situations where the homeowner |
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| and lender cannot reach any type of agreement on a loan | 2 |
| modification or short sale typically end up with a mortgage | 3 |
| foreclosure lawsuit being filed; and | 4 |
| WHEREAS, Mortgage foreclosures on 2, 3, 4, 5, and 6-unit | 5 |
| multifamily properties have the potential to both disrupt local | 6 |
| rental markets and displace tenants even if those tenants are | 7 |
| current on their monthly rents; and | 8 |
| WHEREAS, When property goes to a foreclosure auction, very | 9 |
| few of those properties are being purchased by third-party | 10 |
| investors; instead, the properties revert to the lender or | 11 |
| investor in the mortgage on which the foreclosure has been | 12 |
| filed; and | 13 |
| WHEREAS, Although the worst wave of foreclosures tied to | 14 |
| the highest risk mortgages such as subprime hybrid adjustable | 15 |
| rate mortgages (ARM) loans may have passed, there remain | 16 |
| significant concerns about the financial condition of | 17 |
| homeowners; the continued weakness in the local housing market, | 18 |
| combined with the declining local and national economy, has led | 19 |
| to increased default and foreclosure rates for Alternate | 20 |
| A-paper and prime mortgages; therefore"; and
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| by replacing everything after the enacting clause with the | 22 |
| following:
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| "Section 5. The Code of Civil Procedure is amended by | 2 |
| adding Section 15-1502.7 as follows: | 3 |
| (735 ILCS 5/15-1502.7 new)
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| Sec. 15-1502.7. Emergency foreclosure relief. | 5 |
| (a) As used in this Section: | 6 |
| "Approved counseling agency" means a housing counseling | 7 |
| agency approved by the U.S. Department of Housing and Urban | 8 |
| Development. | 9 |
| "Approved Housing Counseling" means in-person counseling | 10 |
| provided by a counselor employed by an approved counseling | 11 |
| agency to all borrowers, or documented telephone counseling | 12 |
| where a hardship would be imposed on one or more borrowers. A | 13 |
| hardship shall exist in instances in which the borrower is | 14 |
| confined to his or her home due to medical conditions, as | 15 |
| verified in writing by a physician or the borrower resides 50 | 16 |
| miles or more from the nearest approved counseling agency. In | 17 |
| instances of telephone counseling, the borrower must supply all | 18 |
| necessary documents to the counselor at least 72 hours prior to | 19 |
| the scheduled telephone counseling session. | 20 |
| "Delinquent" means past due with respect to a payment on a | 21 |
| mortgage secured by residential real estate. | 22 |
| "Department" means the Department of Financial and | 23 |
| Professional Regulation. | 24 |
| "Loan workout plan" means a plan that the mortgagor and |
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| approved counseling agency reasonably believe shall enable the | 2 |
| mortgagor to stay current on his or her mortgage payments for | 3 |
| the foreseeable future when taking into account the mortgagor's | 4 |
| income and existing and reasonably foreseeable debts. A | 5 |
| sustainable loan workout plan may include, but is not limited | 6 |
| to, (1) a temporary suspension of payments, (2) a lengthened | 7 |
| loan term, (3) a lowered or frozen interest rate, (4) a | 8 |
| principal write down, (5) a repayment plan to pay the existing | 9 |
| loan in full, (6) deferred payments, (7) refinancing into a new | 10 |
| affordable loan, or (8) a deed in lieu of foreclosure | 11 |
| consistent with Section 15-1401 of this Law. | 12 |
| "Secretary" means the Secretary of Financial and | 13 |
| Professional Regulation or other person authorized to act in | 14 |
| the Secretary's stead. | 15 |
| (b) Except in the circumstance in which a mortgagor has | 16 |
| filed a petition for relief under the United States Bankruptcy | 17 |
| Code, no mortgagee shall file a complaint to foreclose a | 18 |
| mortgage secured by residential real estate until the | 19 |
| requirements of this Section have been satisfied. | 20 |
| (c) Except for mortgages secured by residential real estate | 21 |
| in which any mortgagor has filed for relief under the United | 22 |
| States Bankruptcy Code, if a mortgage secured by residential | 23 |
| real estate becomes delinquent by more than 30 days, then the | 24 |
| mortgagee shall serve via certified mail, return receipt | 25 |
| requested, a notice advising the mortgagor that he or she | 26 |
| should seek approved housing counseling. Notwithstanding |
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| anything to the contrary in this Section, nothing shall | 2 |
| preclude the mortgagor and mortgagee from communicating with | 3 |
| each other during the initial 30 days of delinquency or | 4 |
| reaching agreement on a sustainable loan workout plan, or both. | 5 |
| No foreclosure action under Part 15 of Article XV of the | 6 |
| Code of Civil Procedure shall be instituted on a mortgage | 7 |
| secured by residential real estate before serving and complying | 8 |
| with the notice described in this subsection (c). | 9 |
| The notice required in this subsection (c) shall state the | 10 |
| date on which the notice was mailed, shall be headed in bold | 11 |
| 14-point type "FORECLOSURE RELIEF NOTICE", and shall state the | 12 |
| following in 14-point type:
"YOUR LOAN IS MORE THAN 30 DAYS | 13 |
| PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY | 14 |
| BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. | 15 |
| YOU HAVE A GRACE PERIOD OF 60 DAYS FROM THE DATE OF THIS NOTICE | 16 |
| TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, | 17 |
| THE LAW PROHIBITS US FROM FILING A FORECLOSURE ACTION AGAINST | 18 |
| YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 60-DAY GRACE PERIOD | 19 |
| IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING | 20 |
| COUNSELING AGENCY.
A LIST OF APPROVED COUNSELING AGENCIES MAY | 21 |
| BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND | 22 |
| PROFESSIONAL REGULATION." | 23 |
| The notice shall also list the Department's current | 24 |
| consumer hotline, the Department's website, and the telephone | 25 |
| number, fax number, and mailing address of the mortgagee. No | 26 |
| language, other than language substantially similar to the |
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| language prescribed in this subsection (c), shall be included | 2 |
| in the notice. Notwithstanding any other provision to the | 3 |
| contrary, the grace period notice required by this subsection | 4 |
| (c) may be combined with a counseling notification required | 5 |
| under federal law. | 6 |
| Service of the notice required under this subsection (c) | 7 |
| means depositing or causing to be deposited into the United | 8 |
| States mail an envelope with first-class postage prepaid that | 9 |
| contains the document to be delivered. The envelope shall be | 10 |
| addressed to the mortgagor at the common address of the | 11 |
| residential real estate securing the mortgage. | 12 |
| (d) Until 60 days after serving the notice required under | 13 |
| subsection (c) of this Section, no legal action shall be | 14 |
| instituted under Part 15 of Article XV of the Code of Civil | 15 |
| Procedure. | 16 |
| (e) If, within the 60-day period provided under subsection | 17 |
| (d) of this Section, an approved counseling agency provides | 18 |
| written notice to the mortgagee that the mortgagor is seeking | 19 |
| approved counseling services, then no legal action under Part | 20 |
| 15 of Article XV of the Code of Civil Procedure shall be | 21 |
| instituted for 60 days after the date of that notice. The date | 22 |
| that such notice is sent shall be stated in the notice, and | 23 |
| shall be sent to the address or fax number contained in the | 24 |
| Foreclosure Relief Notice required under subsection (c) of this | 25 |
| Section. During the 60-day period provided under this | 26 |
| subsection (e), the mortgagor or counselor or both may prepare |
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| and proffer to the mortgagee a proposed loan workout plan. The | 2 |
| mortgagee will then determine whether to accept the proposed | 3 |
| loan workout plan within 30 days after receiving the proffered | 4 |
| loan workout plan. If the mortgagee and the mortgagor agree to | 5 |
| a loan workout plan, then no legal action under Part 15 of | 6 |
| Article XV of the Code of Civil Procedure shall be instituted | 7 |
| for as long as the loan workout plan is complied with by the | 8 |
| mortgagor. | 9 |
| The agreed loan workout plan and any modifications thereto | 10 |
| must be in writing and signed by the mortgagee and the | 11 |
| mortgagor. | 12 |
| If the mortgagee opts not to accept the proposed loan | 13 |
| workout plan, then the mortgagee shall notify the mortgagor and | 14 |
| counselor of its decision, in writing, setting forth, with | 15 |
| specificity, the reasons for rejecting the proposed loan | 16 |
| workout plan within 30 days after receiving the proffered loan | 17 |
| workout plan. | 18 |
| Upon written notice to the mortgagee, the mortgagor may | 19 |
| change approved counseling agencies, but such a change does not | 20 |
| entitle the mortgagor to any additional period of forbearance. | 21 |
| (f) If the mortgagor fails to comply with the loan workout | 22 |
| plan, then nothing in this Section shall be construed to impair | 23 |
| the legal rights of the mortgagee to institute legal action | 24 |
| under Part 15 of Article XV of the Code of Civil Procedure. | 25 |
| (g) A counselor employed by a housing counseling agency or | 26 |
| the housing counseling agency that in good faith provides |
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| counseling shall not be liable to a mortgagee or mortgagor for | 2 |
| civil damages, except for willful or wanton misconduct on the | 3 |
| part of the counselor in providing the counseling. | 4 |
| (h) There shall be no waiver of any provision of this | 5 |
| Section. | 6 |
| (i) It is the General Assembly's intent that compliance | 7 |
| with this Section shall not prejudice a mortgagee in ratings of | 8 |
| its bad debt collection or calculation standards or policies. | 9 |
| (j) This Section shall not apply, or shall cease to apply, | 10 |
| to residential real estate that is not occupied as a principal | 11 |
| residence by the mortgagor. ".
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