Sen. Iris Y. Martinez

Filed: 5/8/2017

 

 


 

 


 
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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 5. The Code of Civil Procedure is amended by
5reenacting and changing Section 15-1502.5 as follows:
 
6    (735 ILCS 5/15-1502.5)
7    Sec. 15-1502.5. Homeowner protection.
8    (a) As used in this Section:
9    "Approved counseling agency" means a housing counseling
10agency approved by the U.S. Department of Housing and Urban
11Development.
12    "Approved Housing Counseling" means in-person counseling
13provided by a counselor employed by an approved counseling
14agency to all mortgagors borrowers, or documented telephone
15counseling where a hardship would be imposed on one or more
16mortgagors borrowers. A hardship shall exist in instances in

 

 

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1which the mortgagor borrower is confined to his or her home due
2to medical conditions, as verified in writing by a physician or
3the mortgagor borrower resides 50 miles or more from the
4nearest approved counseling agency. In instances of telephone
5counseling, the mortgagor borrower must supply all necessary
6documents to the counselor at least 72 hours prior to the
7scheduled telephone counseling session.
8    "Delinquent" means past due with respect to a payment on a
9mortgage secured by residential real estate or found to be in
10breach of a mortgage secured by residential real estate.
11    "Department" means the Department of Financial and
12Professional Regulation.
13    "Secretary" means the Secretary of Financial and
14Professional Regulation or other person authorized to act in
15the Secretary's stead.
16    "Sustainable loan workout plan" means a plan that the
17mortgagor and approved counseling agency believe shall enable
18the mortgagor to stay current on his or her mortgage payments
19for the foreseeable future when taking into account the
20mortgagor income and existing and foreseeable debts. A
21sustainable loan workout plan may include, but is not limited
22to, (1) a temporary suspension of payments, (2) a lengthened
23loan term, (3) a lowered or frozen interest rate, (4) a
24principal write down, (5) a repayment plan to pay the existing
25loan in full, (6) deferred payments, or (7) refinancing into a
26new affordable loan.

 

 

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1    (b) No Except in the circumstance in which a mortgagor has
2filed a petition for relief under the United States Bankruptcy
3Code, no mortgagee, servicer, or other party shall institute an
4action under this Part file a complaint to foreclose a mortgage
5secured by residential real estate until the requirements of
6this Section have been satisfied.
7    (c) If Notwithstanding any other provision to the contrary,
8with respect to a particular mortgage secured by residential
9real estate, the procedures and forbearances described in this
10Section apply only once per subject mortgage. Except for
11mortgages secured by residential real estate in which any
12mortgagor has filed for relief under the United States
13Bankruptcy Code, if a mortgage secured by residential real
14estate becomes delinquent, no later than the 45th day of the
15mortgagor's delinquency, by more than 30 days the mortgagee or
16its servicer shall send via U.S. mail a written grace period
17notice (written notice) described in this subsection (c)
18advising the mortgagor that he or she may wish to seek approved
19housing counseling. A mortgagee, servicer, or other party is
20not required to provide the written notice more than once
21during any 180-day period except as provided otherwise in this
22Section or by federal law. A mortgagee, servicer, or other
23party may not institute an action under this Part until the
24mortgagor is at least 120 days delinquent on the mortgage.
25Notwithstanding anything to the contrary in this Section,
26nothing shall preclude the mortgagor and mortgagee from

 

 

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1communicating with each other during the initial 120 30 days of
2delinquency or reaching agreement on a sustainable loan workout
3plan, or both.
4    The duty to provide written notice and a corresponding
5grace period under this Section prior to filing a legal action
6under this Part arises when a delinquency exists and may not be
7waived.
8    No foreclosure action under Part 15 of Article XV of the
9Code of Civil Procedure shall be instituted on a mortgage
10secured by residential real estate before mailing the notice
11described in this subsection (c).
12    The written notice required in this subsection (c) shall
13state the date on which the notice was mailed, shall be headed
14in bold 14-point type "GRACE PERIOD NOTICE", and shall state
15the following in 14-point type: "YOUR MORTGAGE LOAN IS MORE
16THAN 30 DAYS PAST DUE OR YOU HAVE BECOME DELINQUENT ON YOUR
17MORTGAGE LOAN. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY.
18PLEASE CONTACT US. THERE MAY BE MORTGAGE LOAN WORKOUT OPTIONS
19AVAILABLE TO YOU. ALSO, IT MAY BE IN YOUR BEST INTEREST TO SEEK
20APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 120 30
21DAYS FROM THE DATE YOUR MORTGAGE LOAN BECAME DELINQUENT, WHICH
22IS (INSERT DATE OF DELINQUENCY) OF THIS NOTICE TO OBTAIN
23APPROVED HOUSING COUNSELING. DURING THE 120-DAY GRACE PERIOD,
24THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU.
25YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU
26OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING

 

 

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1AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED
2FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL
3REGULATION.".
4    The written notice shall also list the United States
5Department of Housing and Urban Development (HUD) toll-free
6telephone number to access homeownership counselors or
7counseling organizations; the Illinois Department of Financial
8and Professional Regulation's Department's current consumer
9hotline and its , the Department's website; , and the customer
10service telephone number, fax number, website and mailing
11address of the mortgagee or its servicer. The written notice
12shall also include a statement providing brief descriptions of
13the loss mitigation options that may be available from the
14mortgagee or its servicer. No language, other than language
15substantially similar to the language prescribed in this
16subsection (c), shall be included in the written notice.
17Notwithstanding any other provision to the contrary, the
18written notice and grace period notice required by this
19subsection (c) may be combined with run concurrently with a
20counseling notification, grace period, or any related
21requirements required under federal law.
22    The sending of the written notice required under this
23subsection (c) means depositing or causing to be deposited into
24the United States mail an envelope with first class postage
25prepaid that contains the document to be delivered. The
26envelope shall be addressed to the mortgagor at the common

 

 

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1address of the residential real estate securing the mortgage.
2    (d) Until 30 days after mailing the written notice required
3by provided for under subsection (c) of this Section has been
4provided, and no sooner than 120 days after the mortgagor
5became delinquent, no legal action shall be instituted under
6this Part 15 of Article XV of the Code of Civil Procedure. If a
7party's action under this Part is based upon a violation of a
8mortgagor's due-on-sale clause or if the party is joining an
9action of a subordinate lienholder, this Section does not apply
10to that action.
11    (e) If, within the 30-day period provided under subsection
12(d) of this Section, an approved counseling agency provides
13written notice to the mortgagee that the mortgagor is seeking
14approved counseling services, then no legal action under Part
1515 of Article XV of the Code of Civil Procedure shall be
16instituted for 30 days after the date of that notice. The date
17that such notice is sent shall be stated in the notice, and
18shall be sent to the address or fax number contained in the
19grace period notice required under subsection (c) of this
20Section. During the 30-day period provided under this
21subsection (e), the mortgagor or counselor or both may prepare
22and proffer to the mortgagee a proposed sustainable loan
23workout plan. The mortgagee will then determine whether to
24accept the proposed sustainable loan workout plan. If the
25mortgagee and the mortgagor agree to a sustainable loan workout
26plan, then no legal action under this Part 15 of Article XV of

 

 

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1the Code of Civil Procedure shall be instituted for as long as
2the sustainable loan workout plan is complied with by the
3mortgagor.
4    The agreed sustainable loan workout plan and any
5modifications thereto must be in writing and signed by the
6mortgagee and the mortgagor.
7    Upon written notice to the mortgagee, the mortgagor may
8change approved counseling agencies, but such a change does not
9entitle the mortgagor to any additional period of forbearance.
10    (f) If the mortgagor fails to comply with the sustainable
11loan workout plan, then nothing in this Section shall be
12construed to impair the legal rights of the mortgagee to
13enforce the contract.
14    (g) A counselor employed by a housing counseling agency or
15the housing counseling agency that in good faith provides
16counseling shall not be liable to a mortgagee or mortgagor for
17civil damages, except for willful or wanton misconduct on the
18part of the counselor in providing the counseling.
19    (h) There shall be no waiver of any provision of this
20Section.
21    (i) It is the General Assembly's intent that compliance
22with this Section shall not prejudice a mortgagee in ratings of
23its bad debt collection or calculation standards or policies.
24    (j) This Section does shall not apply, or shall cease to
25apply, to residential real estate that is not occupied as a
26principal residence by an individual who is a signatory on the

 

 

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1mortgage at the time the duty to mail the written notice
2described in subsection (c) arises the mortgagor.
3    (k)(1) While any mortgagor is a debtor in bankruptcy under
4title 11 of the United States Code, a mortgagee or its servicer
5with regard to the mortgage is exempt from the written notice
6required by subsection (c) of this Section if no loss
7mitigation option is available or if any mortgagor has provided
8a notification pursuant to the Fair Debt Collection Practices
9Act (FDCPA), Section 805(c) (15 U.S.C. 1692c(c)), with respect
10to the mortgage as referenced in subsection (l) of this
11Section. If the conditions of this paragraph (1) are not met,
12the mortgagee or its servicer must comply with the written
13notice required by subsection (c) of this Section as modified
14by paragraph (2) of this subsection (k).
15    (2) If a mortgagor is delinquent when the mortgagor becomes
16a debtor in bankruptcy, a mortgagee or its servicer must
17provide the written notice required by subsection (c) of this
18Section not later than the 45th day after the mortgagor files a
19bankruptcy petition under Title 11 of the United States Code.
20If the mortgagor is not delinquent when the mortgagor files a
21bankruptcy petition, but subsequently becomes delinquent while
22a debtor in bankruptcy, the mortgagee or its servicer must
23provide the written notice not later than the 45th day of the
24mortgagor's delinquency. A mortgagee or its servicer must
25comply with these timing requirements regardless of whether the
26mortgagee or servicer provided the written notice in the

 

 

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1preceding 180-day period.
2    A mortgagee or its servicer is not required to provide
3written notice under subsection (c) of this Section more than
4once during a single bankruptcy case.
5    (3) Except as provided in paragraph (4) of this subsection
6(k), a mortgagee or its servicer that was exempt from the
7written notice required by subsection (c) of this Section
8pursuant to paragraph (1) of this subsection (k) must resume
9compliance with the written notice required by subsection (c)
10of this Section after the next payment due date that follows
11the earliest of the following events: (i) the bankruptcy case
12is dismissed, (ii) the bankruptcy case is closed, or (iii) the
13mortgagor reaffirms personal liability for the mortgage.
14    (4) With respect to a mortgage for which the mortgagor has
15discharged personal liability pursuant to 11 U.S.C. 727, 1141,
161228, or 1328, the mortgagee or its servicer must resume
17compliance with the written notice required by subsection (c)
18of this Section if the mortgagor has made any partial or
19periodic payment on the mortgage after the commencement of the
20mortgagor's bankruptcy case.
21    (l) With regard to a mortgage for which a mortgagor has
22provided notification pursuant to the Fair Debt Collection
23Practices Act (FDCPA), Section 805(c) (15 U.S.C. 1692c(c)), the
24mortgagee or its servicer subject to the FDCPA with respect to
25that mortgagor's loan:
26        (1) is exempt from the requirements of the written

 

 

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1    notice under subsection (c) of this Section if no loss
2    mitigation option is available, or while a mortgagor is a
3    debtor in bankruptcy under Title 11 of the United States
4    Code as referenced in subsection (k) of this Section; and
5        (2) if the conditions of paragraph (1) of this
6    subsection (l) are not met, the mortgagee or its servicer
7    must comply with the requirements of the written notice
8    under subsection (c) of this Section as modified by this
9    paragraph (2): (i) In addition to the information contained
10    in the written notice required by subsection (c) of this
11    Section, the notice must include a statement as follows:
12    "(Name of the mortgagee or its servicer) intends to invoke
13    its specified remedy of foreclosure."; and (ii) The
14    mortgagee or its servicer is prohibited from providing the
15    written notice more than once during any 180-day period.
16    (m) (k) This Section is repealed July 1, 2027 2016.
17    (n) This reenacted Section applies to causes of action that
18arise on or after the effective date of this amendatory Act of
19the 100th General Assembly.
20(Source: P.A. 98-25, eff. 6-20-13.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.".