Honorable Members of the
Pursuant to Article IV, Section
9(e) of the Illinois Constitution of 1970, I hereby return Senate Bill 1879,
entitled “AN ACT concerning regulation.”, with the following specific
recommendations for change:
on page 1,
line 5, by replacing “Sections 15-1504.5” with “Sections 15-1501.5, 1504.5,”;
on page 1,
below line 6, by inserting the following:
ILCS 5/15-1501.5 new)
15-1501.5. Counseling prior to perfecting foreclosure proceedings.
Except for home loans in which any borrower has filed for relief under the
United States Bankruptcy Code, if a home loan becomes delinquent by more than
30 days, the servicer shall send a notice advising the borrower that he or she
may wish to seek approved credit counseling.
The notice required in subsection (a) of this Section shall state the date on
which the notice was mailed, shall be headed in bold, 14-point type, “GRACE
PERIOD NOTICE”, and shall state the following in 14-point type: “YOUR LOAN IS
OR WAS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL
DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING OR CREDIT
COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS FORM TO
OBTAIN APPROVED HOUSING OR CREDIT COUNSELING. DURING THE GRACE PERIOD, THE LAW
PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. A LIST OF APPROVED
COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL
AND PROFESSIONAL REGULATION.” The notice shall also list the Department’s
current consumer hotline, the Department’s website, and the telephone number,
fax number, and mailing address of the servicer’s loss mitigation department.
No language, other than the language prescribed in this subsection (b), shall
be included in the notice. The requirements of this subsection (b) shall be
deemed satisfied if the language and format prescribed in this subsection (b)
is included in a counseling notification required under federal law.
Upon mailing the notice provided for under subsection (b) of this Section,
neither the lender, servicer, nor lender’s agent shall institute legal action
under this Part 15 of Article XV for 30 days. Only one such 30-day period of
forbearance is allowed under this subsection (c) per subject loan.
If, within the 30-day period provided under subsection (c) of this Section, an
approved counseling agency notifies the lender, servicer, or lender’s agent
that the borrower is seeking approved counseling services, then the lender,
servicer, or lender’s agent shall not institute legal action under this Part 15
of Article XV for 30 days after the date of that notice. During the 30-day
period provided under this subsection (d), the borrower or counselor or both
may prepare and proffer to the lender, servicer, or lender’s agent a proposed
debt management plan. The lender, servicer, or lender’s agent shall then
determine whether to accept the proposed debt management plan. If the lender, servicer,
or lender’s agent and the borrower agree to a debt management plan, then the
lender, servicer, or lender’s agent shall not institute legal action under this
Part 15 of Article XV for as long as the debt management plan is complied with
by the borrower. The agreed debt management plan and any modifications thereto
must be in writing and signed by the lender, servicer, or lender’s agent and
the borrower. Upon written notice to the lender, servicer, or lender’s agent,
the borrower may change approved counseling agencies, but such a change does
not entitle the borrower to any additional period of forbearance.
If the borrower fails to comply with the agreed debt management plan, then
nothing in this Section shall be construed to impair the legal right of the
lender, servicer, or lender’s agent to enforce the contract.
As used in this Section:
counseling agency” means a housing counseling agency approved by the U.S.
Department of Housing and Urban Development, a credit counseling agency
approved by the Secretary, or any other person or entity approved by the
means a natural person who seeks or obtains a home loan.
means past due with respect to payments on a home loan.
means the Department of Financial and Professional Regulation.
loan” means a loan to or for the benefit of any natural person made primarily
for personal, family, or household use, primarily secured by either a mortgage
on residential real property, title to a mobile home, or certificates of stock
or other evidence of ownership interests in and proprietary from corporations,
partnerships, or limited liability companies formed for the purpose of
cooperative ownership of residential real property, all located in this State.
means any person, partnership, association, corporation, or any other entity
who either transfers, offers, lends, or invests money in home loans.
means the Secretary of the Department of Financial and Professional Regulation
or other person authorized to act in the Secretary’s stead.
“Servicer” means any entity chartered under the Illinois Banking Act,
the Savings Bank Act, the Illinois Credit Union Act, or the Illinois Savings
and Loan Act of 1985 and any person or entity licensed under the Residential
Mortgage License Act of 1987, the Consumer Installment Loan Act, or the Sales
Finance Agency Act who is responsible for the collection or remittance for or
has the right or obligation to collect or remit for any lender, note owner, or
note holder or for a lender's own account of payments, interest, principal, and
escrow items (such as hazard insurance and taxes on a residential mortgage
loan) in accordance with the terms of the home loan, including loan payment
follow up, delinquency loan follow up, loan analysis, and any notifications to
the borrower that are necessary to enable the borrower to keep the loan current
and in good standing.”
With these changes, Senate Bill 1879 will have my approval.
I respectfully request your concurrence.