Sen. Jacqueline Y. Collins
Filed: 11/20/2008
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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 5. The Code of Civil Procedure is amended by | ||||||
6 | adding Section 15-1502.5 as follows: | ||||||
7 | (735 ILCS 5/15-1502.5 new) | ||||||
8 | Sec. 15-1502.5. Homeowner protection. | ||||||
9 | (a) As used in this Section: | ||||||
10 | "Approved counseling agency" means a housing counseling | ||||||
11 | agency approved by the U.S. Department of Housing and Urban | ||||||
12 | Development. | ||||||
13 | "Delinquent" means past due with respect to a payment on a | ||||||
14 | mortgage secured by residential real estate. | ||||||
15 | "Department" means the Department of Financial and | ||||||
16 | Professional Regulation. |
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1 | "Secretary" means the Secretary of Financial and | ||||||
2 | Professional Regulation or other person authorized to act in | ||||||
3 | the Secretary's stead. | ||||||
4 | "Sustainable loan workout plan" means a plan that the | ||||||
5 | mortgagor and approved counseling agency believe shall enable | ||||||
6 | the mortgagor to stay current on his or her mortgage payments | ||||||
7 | for the foreseeable future when taking into account the | ||||||
8 | mortgagor income and existing and foreseeable debts. A | ||||||
9 | sustainable loan workout plan may include, but is not limited | ||||||
10 | to, (1) a temporary suspension of payments, (2) a lengthened | ||||||
11 | loan term, (3) a lowered or frozen interest rate, (4) a | ||||||
12 | principal write down, (5) a repayment plan to pay the existing | ||||||
13 | loan in full, (6) deferred payments, or (7) refinancing into a | ||||||
14 | new affordable loan. | ||||||
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) Notwithstanding any provision to the contrary, with | ||||||
21 | respect to a particular mortgage secured by residential real | ||||||
22 | estate, the procedures and forbearances described in this | ||||||
23 | Section apply only once per subject mortgage. | ||||||
24 | Except for mortgages secured by residential real estate in | ||||||
25 | which any mortgagor has filed for relief under the United | ||||||
26 | States Bankruptcy Code, if a mortgage secured by residential |
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1 | real estate becomes delinquent by more than 30 days the | ||||||
2 | mortgagee shall send via U.S. mail a notice advising the | ||||||
3 | mortgagor that he or she may wish to seek approved housing | ||||||
4 | counseling. Notwithstanding anything to the contrary in this | ||||||
5 | Section, nothing shall preclude the mortgagor and mortgagee | ||||||
6 | from communicating with each other during the initial 30 day of | ||||||
7 | delinquency and reaching agreement on a sustainable loan | ||||||
8 | current plan. | ||||||
9 | No foreclosure action under Part 15 of Article XV of the | ||||||
10 | Code of Civil Procedure shall be instituted on a mortgage | ||||||
11 | secured by residential real estate before mailing the notice | ||||||
12 | described in this subsection (c). | ||||||
13 | The notice required in this subsection (c) shall state the | ||||||
14 | date on which the notice was mailed, shall be headed in bold | ||||||
15 | 14-point type "GRACE PERIOD NOTICE", and shall state the | ||||||
16 | following in 14-point type:
"YOUR LOAN IS MORE THAN 30 DAYS | ||||||
17 | PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY | ||||||
18 | BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. | ||||||
19 | YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE | ||||||
20 | TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, | ||||||
21 | THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. | ||||||
22 | A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE | ||||||
23 | ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION." | ||||||
24 | The notice shall also list the Department's current | ||||||
25 | consumer hotline, the Department's website, and the telephone | ||||||
26 | number, fax number, and mailing address of the mortgagee. No |
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1 | language, other than the language prescribed in this subsection | ||||||
2 | (c), shall be included in the notice. The requirements of this | ||||||
3 | subsection (c) shall be deemed satisfied if the language and | ||||||
4 | format prescribed in this subsection is included in a | ||||||
5 | counseling notification required under federal law. | ||||||
6 | The sending of the notice required under this subsection | ||||||
7 | (c) 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 30 days after mailing the notice provided for | ||||||
13 | under 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 30-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 30 days after the date of that notice. The date | ||||||
22 | that such notice is set shall be stated in the notice, and | ||||||
23 | shall be sent to the address or fax number contained in the | ||||||
24 | Grace Period Notice required under subsection (c) of this | ||||||
25 | Section. During the 30-day period provided under this | ||||||
26 | subsection (e), the mortgagor or counselor or both may prepare |
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1 | and proffer to the mortgagee a proposed sustainable loan | ||||||
2 | workout plan. The mortgagee will then determine whether to | ||||||
3 | accept the proposed sustainable loan workout plan. If the | ||||||
4 | mortgagee and the mortgagor agree to a sustainable loan workout | ||||||
5 | plan, then no legal action under Part 15 of Article XV of the | ||||||
6 | Code of Civil Procedure shall be instituted for as long as the | ||||||
7 | sustainable loan workout plan is complied with by the | ||||||
8 | mortgagor. | ||||||
9 | The agreed sustainable loan workout plan and any | ||||||
10 | modifications thereto must be in writing and signed by the | ||||||
11 | mortgagee and the mortgagor. | ||||||
12 | Upon written notice to the mortgagee, the mortgagor may | ||||||
13 | change approved counseling agencies, but such a change does not | ||||||
14 | entitle the mortgagor to any additional period of forbearance. | ||||||
15 | (f) If the mortgagor fails to comply with the sustainable | ||||||
16 | loan workout plan, then nothing in this Section shall be | ||||||
17 | construed to impair the legal right of the mortgagee to enforce | ||||||
18 | the contract. | ||||||
19 | (g) A counselor employed by a housing counseling agency or | ||||||
20 | the housing counseling agency that in good faith provides | ||||||
21 | counseling shall not be liable to a mortgagee or mortgagor for | ||||||
22 | civil damages, except for willful or wanton misconduct on the | ||||||
23 | part of the counselor in providing the counseling. | ||||||
24 | (h) If the Secretary finds that the demand for counseling | ||||||
25 | services in any particular geographic area exceeds the number | ||||||
26 | of available approved counseling agencies, then he or she may |
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1 | certify other persons or entities as approved counseling | ||||||
2 | agencies. Except as provided for in this Section, no for-profit | ||||||
3 | entities may be certified as approved counseling agencies. | ||||||
4 | (i) There shall be no waiver of any provision of this | ||||||
5 | Section. | ||||||
6 | (j) 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 | (k) This Section shall not apply to mortgages securing | ||||||
10 | residential real estate that were issued or originated on or | ||||||
11 | after the effective date of this amendatory Act of the 95th | ||||||
12 | General Assembly. | ||||||
13 | (l) This Section shall not apply, or shall cease to apply, | ||||||
14 | to residential real estate that is not occupied as a principal | ||||||
15 | residence by the mortgagor. | ||||||
16 | (m) This Section is repealed 2 years after the effective | ||||||
17 | date of this amendatory Act of the 95th General Assembly. | ||||||
18 | Section 97. Severability. The provisions of this Act are | ||||||
19 | severable under Section 1.31 of the Statute on Statutes.
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20 | Section 99. Effective date. This Act takes effect upon | ||||||
21 | becoming law.".
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