Sen. Iris Y. Martinez

Filed: 4/4/2017

 

 


 

 


 
10000SB0568sam001LRB100 04829 HEP 24836 a

1
AMENDMENT TO SENATE BILL 568

2    AMENDMENT NO. ______. Amend Senate Bill 568 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Purpose.
5    (a) The General Assembly finds and declares that:
6        (1) Section 15-1502.5 of the Code of Civil Procedure
7    contained an internal repealer date of July 1, 2016.
8        (2) It is the purpose of this Act to reenact Section
9    15-1502.5 of the Code of Civil Procedure as if it had never
10    been internally repealed, and make additional changes to
11    that Section. The reenacted material is shown as existing
12    text; striking and underscoring have been used only to show
13    the changes being made by this Act in the reenacted text.
14        (3) This Act is not intended to supersede any other
15    Public Act of the 100th General Assembly.
16        (4) This Act is intended to validate the requirements
17    arising under Section 15-1502.5 of the Code of Civil

 

 

10000SB0568sam001- 2 -LRB100 04829 HEP 24836 a

1    Procedure and actions taken in compliance with those
2    requirements.
 
3    Section 5. The Code of Civil Procedure is amended by
4reenacting and changing Section 15-1502.5 as follows:
 
5    (735 ILCS 5/15-1502.5)
6    Sec. 15-1502.5. Homeowner protection.
7    (a) As used in this Section:
8    "Approved counseling agency" means a housing counseling
9agency approved by the U.S. Department of Housing and Urban
10Development.
11    "Approved Housing Counseling" means in-person counseling
12provided by a counselor employed by an approved counseling
13agency to all borrowers, or documented telephone counseling
14where a hardship would be imposed on one or more borrowers. A
15hardship shall exist in instances in which the borrower is
16confined to his or her home due to medical conditions, as
17verified in writing by a physician or the borrower resides 50
18miles or more from the nearest approved counseling agency. In
19instances of telephone counseling, the borrower must supply all
20necessary documents to the counselor at least 72 hours prior to
21the scheduled telephone counseling session.
22    "Delinquent" means past due with respect to a payment on a
23mortgage secured by residential real estate.
24    "Department" means the Department of Financial and

 

 

10000SB0568sam001- 3 -LRB100 04829 HEP 24836 a

1Professional Regulation.
2    "Secretary" means the Secretary of Financial and
3Professional Regulation or other person authorized to act in
4the Secretary's stead.
5    "Sustainable loan workout plan" means a plan that the
6mortgagor and approved counseling agency believe shall enable
7the mortgagor to stay current on his or her mortgage payments
8for the foreseeable future when taking into account the
9mortgagor income and existing and foreseeable debts. A
10sustainable loan workout plan may include, but is not limited
11to, (1) a temporary suspension of payments, (2) a lengthened
12loan term, (3) a lowered or frozen interest rate, (4) a
13principal write down, (5) a repayment plan to pay the existing
14loan in full, (6) deferred payments, or (7) refinancing into a
15new affordable loan.
16    (b) No Except in the circumstance in which a mortgagor has
17filed a petition for relief under the United States Bankruptcy
18Code, no mortgagee shall file an action under this Part a
19complaint to foreclose a mortgage secured by residential real
20estate until the requirements of this Section have been
21satisfied.
22    (c) Notwithstanding any other provision to the contrary,
23with respect to a particular mortgage secured by residential
24real estate, the procedures and forbearances described in this
25Section apply only once per subject mortgage. Except for
26mortgages secured by residential real estate in which any

 

 

10000SB0568sam001- 4 -LRB100 04829 HEP 24836 a

1mortgagor has filed for relief under the United States
2Bankruptcy Code, if a mortgage secured by residential real
3estate becomes delinquent by more than 30 days the mortgagee
4shall send via certified first class postage prepaid U.S. mail,
5return receipt requested, a notice advising the mortgagor that
6he or she may wish to seek approved housing counseling.
7Notwithstanding anything to the contrary in this Section,
8nothing shall preclude the mortgagor and mortgagee from
9communicating with each other during the initial 30 days of
10delinquency or reaching agreement on a sustainable loan workout
11plan, or both.
12    The duty to provide a notice and subsequent grace period
13under this Section prior to filing a legal action under this
14Part arises when a delinquency of 30 days exists and shall not
15be waived. This Section does not supersede an automatic stay
16under the United States Bankruptcy Code that exists concurrent
17with any of the time frames outlined in this Section. The duty
18under this Section and any associated time frames shall be
19tolled if an automatic stay under the United States Bankruptcy
20Code is in place until the stay is no longer in place.
21    No foreclosure action under Part 15 of Article XV of the
22Code of Civil Procedure shall be instituted on a mortgage
23secured by residential real estate before mailing the notice
24described in this subsection (c).
25    The notice required in this subsection (c) shall state the
26date on which the notice was mailed, shall be headed in bold

 

 

10000SB0568sam001- 5 -LRB100 04829 HEP 24836 a

114-point type "GRACE PERIOD NOTICE", and shall state the
2following in 14-point type: "YOUR LOAN IS MORE THAN 30 DAYS
3PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY
4BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING.
5YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE
6TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD,
7THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU.
8YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU
9OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING
10AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED
11FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL
12REGULATION."
13    The notice shall also list the Department's current
14consumer hotline, the Department's website, and the telephone
15numbers, fax numbers, and mailing addresses of the mortgagee
16and the servicer responsible for collecting payments. The
17notice shall also list the investor of the loan telephone
18number, fax number, and mailing address of the mortgagee. No
19language, other than language substantially similar to the
20language prescribed in this subsection (c), shall be included
21in the notice. Notwithstanding any other provision to the
22contrary, the grace period notice required by this subsection
23(c) may be combined with a counseling notification required
24under federal law.
25    The sending of the notice required under this subsection
26(c) means depositing or causing to be deposited into the United

 

 

10000SB0568sam001- 6 -LRB100 04829 HEP 24836 a

1States mail an envelope with certified first class postage
2prepaid, return receipt requested, that contains the document
3to be delivered. An The envelope containing the notice shall be
4addressed to each individual or entity that is a signatory on
5the mortgage the mortgagor at the common address of the
6residential real estate securing the mortgage in addition to
7the mailing address of record for each individual or entity who
8is a signatory on the mortgage.
9    (d) Until 30 days after mailing the notice provided for
10under subsection (c) of this Section, no legal action shall be
11instituted under this Part 15 of Article XV of the Code of
12Civil Procedure.
13    (e) If, within the 30-day period provided under subsection
14(d) of this Section, an approved counseling agency provides
15written notice to the mortgagee that the mortgagor is seeking
16approved counseling services, then no legal action under this
17Part 15 of Article XV of the Code of Civil Procedure shall be
18instituted for 30 days after the date of that notice. The date
19that such notice is sent shall be stated in the notice, and
20shall be sent to the address or fax number contained in the
21grace period notice required under subsection (c) of this
22Section. During the 30-day period provided under this
23subsection (e), the mortgagor or counselor or both may prepare
24and proffer to the mortgagee a proposed sustainable loan
25workout plan. The mortgagee will then determine whether to
26accept the proposed sustainable loan workout plan. If the

 

 

10000SB0568sam001- 7 -LRB100 04829 HEP 24836 a

1mortgagee and the mortgagor agree to a sustainable loan workout
2plan, then no legal action under this Part 15 of Article XV of
3the Code of Civil Procedure shall be instituted for as long as
4the sustainable loan workout plan is complied with by the
5mortgagor.
6    The agreed sustainable loan workout plan and any
7modifications thereto must be in writing and signed by the
8mortgagee and the mortgagor.
9    Upon written notice to the mortgagee, the mortgagor may
10change approved counseling agencies, but such a change does not
11entitle the mortgagor to any additional period of forbearance.
12    (e-5) Complying with the requirements of subsections (c),
13(d), and (e) of this Section is a condition precedent to filing
14a legal action under this Part. Failure to comply with the
15requirements of subsections (c), (d), and (e) constitutes an
16affirmative matter that defeats a legal action under this Part.
17The requirements of subsections (c), (d), and (e) are not
18allegations for purposes of subsection (c) of Section 15-1504.
19    (f) If the mortgagor fails to comply with the sustainable
20loan workout plan, then nothing in this Section shall be
21construed to impair the legal rights of the mortgagee to
22enforce the contract.
23    (g) A counselor employed by a housing counseling agency or
24the housing counseling agency that in good faith provides
25counseling shall not be liable to a mortgagee or mortgagor for
26civil damages, except for willful or wanton misconduct on the

 

 

10000SB0568sam001- 8 -LRB100 04829 HEP 24836 a

1part of the counselor in providing the counseling.
2    (h) There shall be no waiver of any provision of this
3Section.
4    (i) It is the General Assembly's intent that compliance
5with this Section shall not prejudice a mortgagee in ratings of
6its bad debt collection or calculation standards or policies.
7    (j) This Section does shall not apply, or shall cease to
8apply, to residential real estate that is not occupied as a
9principal residence by an individual or entity who is a
10signatory on the mortgage at the time the duty to mail the
11notice described in subsection (c) arises the mortgagor.
12    (k) This Section is repealed July 1, 2027 2016.
13    (l) This reenacted Section applies to causes of action that
14exist on or after July 1, 2016 as if this Section had continued
15in effect on and after that date and had never been repealed.
16Actions taken in compliance with this Section on or after July
171, 2016 and before the effective date of this amendatory Act of
18the 100th General Assembly are ratified, validated, and
19confirmed. The changes made to subsections (a) through (k) of
20this Section by this amendatory Act of the 100th General
21Assembly apply to causes of action arising on or after the
22effective date of this amendatory Act of the 100th General
23Assembly.
24(Source: P.A. 98-25, eff. 6-20-13.)
 
25    Section 99. Effective date. This Act takes effect upon

 

 

10000SB0568sam001- 9 -LRB100 04829 HEP 24836 a

1becoming law.".