96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB3962

 

Introduced 11/4/2010, by Sen. Rickey R. Hendon

 

SYNOPSIS AS INTRODUCED:
 
735 ILCS 5/15-1110 new

    Amends the Code of Civil Procedure. Provides for a moratorium stay on all pending residential real estate mortgage foreclosures filed by lending institutions, subject to a review by the Attorney General of the practices and procedures of each lending institution to determine whether the lending institution properly uses genuine, accurate, properly executed, and appropriate documents that are properly processed, include full and accurate accountings, and are in full compliance with applicable federal and State laws and regulations. Provides definitions. Creates within the Office of the Attorney General, the Office for the Monitoring of Residential Real Estate Mortgage Foreclosures headed up by the Mortgage Foreclosure Monitor, appointed by the Attorney General. Provides that the Attorney General will have the power to: administer this program; issue reports about lending institutions; make recommendations to the General Assembly; obtain necessary documents, subpoena documents, and engage in related activities. Provides that any delay caused by this process shall toll any statutory or contractual time requirements. Effective immediately.


LRB096 24065 AJO 43482 b

 

 

A BILL FOR

 

SB3962LRB096 24065 AJO 43482 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Code of Civil Procedure is amended by adding
5Section 15-1110 as follows:
 
6    (735 ILCS 5/15-1110 new)
7    Sec. 15-1110. Residential real estate foreclosure
8moratorium.
9    (a) Findings. The General Assembly finds that:
10        (1) The significant number of residential real estate
11    foreclosures in Illinois in recent years have resulted in
12    serious, deleterious effects upon the individuals and
13    families whose residences were in foreclosure, the value of
14    residential properties that are not in foreclosure, and the
15    overall Illinois economy.
16        (2) The existence and use of insufficient or false
17    documents in mortgage foreclosures is an abuse against
18    mortgagors perpetrated by lending institutions and other
19    mortgage holders to foreclose on mortgages and this abuse
20    exacerbated the harm done to individuals and families
21    through foreclosures.
22        (3) The most effective way to make certain that no
23    other residential real estate is improperly foreclosed

 

 

SB3962- 2 -LRB096 24065 AJO 43482 b

1    upon in Illinois is for there to be a moratorium on
2    foreclosures and to provide for a review of the practices
3    and procedures employed by lending institutions that have
4    pending mortgage foreclosure actions and that have
5    foreclosure actions that are ready to be filed, to
6    determine whether the practices and procedures employed by
7    those lending institutions properly use genuine, accurate,
8    properly executed, and appropriate documents that are
9    properly processed, include full and accurate accountings,
10    and are in full compliance with all applicable federal and
11    State laws and regulations.
12    (b) Definitions. For purposes of this Section:
13        "Documents" means all pleadings, motions, court
14    documents, mortgages, mortgage notes, lien documents,
15    calculations, accountings, appraisals, papers, or data,
16    whether maintained on paper or in an electronic format.
17        "Foreclosure" means a mortgage foreclosure action to
18    foreclose on residential real estate.
19        "Monitor" means the Mortgage Foreclosure Monitor
20    position created by this Section.
21    "Lending institution" means any bank, bank holding
22company, credit union, trust company, savings bank, national
23banking association, savings and loan association, building
24and loan association, mortgage banker or other lending
25institution which customarily provides service or otherwise
26aids in the financing of home mortgages, or any holding company

 

 

SB3962- 3 -LRB096 24065 AJO 43482 b

1for any of the foregoing. The term "lending institution"
2includes any agent or assignee of the lending institution.
3    (c) Stay. Any action to foreclose a mortgage on residential
4real estate filed by a lending institution that is pending on
5the effective date of this amendatory Act of the 96th General
6Assembly is automatically stayed and shall remain stayed until
7the Attorney General issues a report concerning the lending
8institution pursuant to this Section.
9    (d) Mortgage Foreclosure Monitor. There is created in the
10Office of the Attorney General the Office for the Monitoring of
11Residential Real Estate Mortgage Foreclosures. The Attorney
12General shall appoint a Mortgage Foreclosure Monitor, who shall
13be an attorney licensed to practice in Illinois. The Office for
14the Monitoring of Residential Real Estate Mortgage
15Foreclosures shall be comprised of the Mortgage Foreclosure
16Monitor and such assistant attorneys general and other staff as
17are deemed necessary by the Attorney General.
18    (e) Powers of Monitor. Through the Mortgage Foreclosure
19Monitor, the Attorney General shall have the power:
20        (1) to establish and administer a program to review and
21    monitor pending residential real estate mortgage
22    foreclosure actions filed by lending institutions to
23    determine that the practices and procedures of the lending
24    institutions that filed the pending residential real
25    estate mortgage foreclosure actions were sufficient to:
26            (A) safeguard against premature filing of a

 

 

SB3962- 4 -LRB096 24065 AJO 43482 b

1        residential real estate mortgage foreclosure action;
2            (B) provide that all those mortgagors who have a
3        mortgage with that lending institution and who reside
4        in residential real estate receive all notices, forms,
5        documents, and opportunities provided by federal or
6        State law or regulation so as to avoid foreclosure and
7        to provide, after a foreclosure action is filed, to
8        those mortgagors full information about and access to
9        available legal assistance, mortgagor assistance, and
10        remedies in foreclosure;
11            (C) provide legitimate and accurate calculations
12        and accountings pertaining to fees, escrow accounts,
13        taxes, insurance, and any other monies of the lending
14        institution that are held by or owed to the lending
15        institution; and
16            (D) prevent fraud of any type that adversely
17        affects a mortgagor or the public interest.
18        (2) to issue a report about each lending institution
19    subject to this Section and its practices and procedures
20    concerning residential real estate mortgage foreclosures,
21    which shall include findings and conclusions that are based
22    on the monitor's review of that lending institution's
23    practices and procedures for residential real estate
24    mortgage foreclosures that:
25            (A) there appears no just cause to continue the
26        moratorium stay on mortgage foreclosure actions filed

 

 

SB3962- 5 -LRB096 24065 AJO 43482 b

1        by that lending institution or to prevent that lending
2        institution from continuing to file residential real
3        estate foreclosure actions; or
4            (B) the practices and procedures of the lending
5        institution were found to be deficient in specified
6        respects and what steps that lending institution must
7        take before a report described in subparagraph (A) can
8        be issued.
9        (3) to resolve disputes involving an adverse report
10    about a lending institution or in response to a request for
11    review initiated by the lending institution, by informally
12    resolving the dispute or by issuing a revised or subsequent
13    report; except that the Attorney General may not issue any
14    report that only concerns a specific matter in an
15    individual mortgage foreclosure action that has been
16    filed;
17        (4) to respond to informal inquiries made by the
18    public;
19        (5) to make recommendations to the General Assembly
20    concerning ways to improve the laws concerning the
21    residential real estate mortgage foreclosure process;
22        (6) to develop and make available on the Attorney
23    General's website or by other means an electronic database
24    of the reports issued about the lending institutions
25    subject to this Section;
26        (7) to promulgate rules and emergency rules to

 

 

SB3962- 6 -LRB096 24065 AJO 43482 b

1    implement these powers.
2    (f) Records. A lending institution must submit all
3documents and records to the Attorney General in order for the
4Attorney General to determine that generally the lending
5institution:
6        (1) utilizes documents in foreclosures that are
7    genuine, accurate, properly executed, and appropriate;
8        (2) utilizes documents that are legally sufficient to
9    give rise to the rights or remedies being asserted by the
10    lending institution asserting those rights or remedies
11    pursuant to those documents; and
12        (3) utilizes calculations pertaining to escrow
13    accounts, taxes, insurance premiums, and any other monies
14    of or credits due to the mortgagor that are accurately made
15    or properly assessed by the lending institution, or its
16    agents or assigns.
17    (g) Record production. Any document or other matter
18requested by the Attorney General, pursuant to this Section,
19from any lending institution or any party in a foreclosure
20action or a proposed foreclosure action shall be delivered to
21the Attorney General within a reasonable time, but in no event
22later than 28 days after the request is made by the Attorney
23General.
24    (h) To accomplish the objectives and to carry out the
25duties prescribed by this Section, the Monitor, in addition to
26other powers conferred upon him or her by this Section, may

 

 

SB3962- 7 -LRB096 24065 AJO 43482 b

1request that subpoenas be issued by the Attorney General in
2accordance with the provisions of this Section. Service by the
3Attorney General of any subpoena upon any person shall be made:
4        (1) personally by delivery of a duly executed copy
5    thereof to the person to be served, or in the case of a
6    public body, in the manner provided in Section 2-211; or
7        (2) by mailing by certified mail a duly executed copy
8    thereof to the person to be served at his or her last known
9    abode or, in the case of a public body, to its principal
10    place of business.
11    (i) If any person or public body fails or refuses to obey
12any subpoena issued pursuant to this Section, the Attorney
13General may file a complaint in the circuit court to:
14        (1) obtain compliance with the subpoena; and
15        (2) obtain such other relief as may be required.
16    (j) Effect of stay. On and after the effective date of this
17amendatory Act of the 96th General Assembly, no action to
18foreclose a mortgage on residential real estate may be filed by
19a lending institution until the Attorney General has issued a
20report that concludes that there is no just cause to continue
21the moratorium stay as to that lending institution pursuant to
22this Section. The submission of all documents required by the
23Attorney General concerning any proposed action to foreclose a
24mortgage on residential real estate by a lending institution
25shall toll any statutory or contractual time requirement that
26is not able to be complied with or met because of the

 

 

SB3962- 8 -LRB096 24065 AJO 43482 b

1requirements of this Section or the passage of time prior to
2the issuance of a report of the Attorney General concerning
3that lending institution pursuant to this Section.
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.