Sen. Jacqueline Y. Collins
Filed: 11/12/2008
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1 | AMENDMENT TO HOUSE BILL 2973
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2 | AMENDMENT NO. ______. Amend House Bill 2973, AS AMENDED, by | ||||||
3 | replacing everything after the enacting clause with the | ||||||
4 | following:
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5 | "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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1 | "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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22 | "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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1 | 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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14 | "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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1 | 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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8 | Section 20. One-time notice and counseling grace period.
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9 | (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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1 | 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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1 | (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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1 | construed to impair the legal right of the lender, servicer, or | ||||||
2 | lender's agent to enforce the contract.
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3 | (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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1 | 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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13 | (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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1 | 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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12 | 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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18 | 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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1 | Section 99. Effective date. This Act takes effect upon | ||||||
2 | becoming law.".
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