SB0568sam001 100TH GENERAL ASSEMBLY

Sen. Iris Y. Martinez

Filed: 4/4/2017

10000SB0568sam001 LRB100 04829 HEP 24836 a

AMENDMENT TO SENATE BILL 568

AMENDMENT NO. ______. Amend Senate Bill 568 by replacing everything after the enacting clause with the following:

"Section 1. Purpose.

(a) The General Assembly finds and declares that:

(1) Section 15-1502.5 of the Code of Civil Procedure contained an internal repealer date of July 1, 2016.

(2) It is the purpose of this Act to reenact Section 15-1502.5 of the Code of Civil Procedure as if it had never been internally repealed, and make additional changes to that Section. The reenacted material is shown as existing text; striking and underscoring have been used only to show the changes being made by this Act in the reenacted text.

(3) This Act is not intended to supersede any other Public Act of the 100th General Assembly.

(4) This Act is intended to validate the requirements arising under Section 15-1502.5 of the Code of Civil Procedure and actions taken in compliance with those requirements.

Section 5. The Code of Civil Procedure is amended by reenacting and changing Section 15-1502.5 as follows:

(735 ILCS 5/15-1502.5)

Sec. 15-1502.5. Homeowner protection.

(a) As used in this Section:

"Approved counseling agency" means a housing counseling agency approved by the U.S. Department of Housing and Urban Development.

"Approved Housing Counseling" means in-person counseling provided by a counselor employed by an approved counseling agency to all borrowers, or documented telephone counseling where a hardship would be imposed on one or more borrowers. A hardship shall exist in instances in which the borrower is confined to his or her home due to medical conditions, as verified in writing by a physician or the borrower resides 50 miles or more from the nearest approved counseling agency. In instances of telephone counseling, the borrower must supply all necessary documents to the counselor at least 72 hours prior to the scheduled telephone counseling session.

"Delinquent" means past due with respect to a payment on a mortgage secured by residential real estate.

"Department" means the Department of Financial and Professional Regulation.

"Secretary" means the Secretary of Financial and Professional Regulation or other person authorized to act in the Secretary's stead.

"Sustainable loan workout plan" means a plan that the mortgagor and approved counseling agency believe shall enable the mortgagor to stay current on his or her mortgage payments for the foreseeable future when taking into account the mortgagor income and existing and foreseeable debts. A sustainable loan workout plan may include, but is not limited to, (1) a temporary suspension of payments, (2) a lengthened loan term, (3) a lowered or frozen interest rate, (4) a principal write down, (5) a repayment plan to pay the existing loan in full, (6) deferred payments, or (7) refinancing into a new affordable loan.

(b) No Except in the circumstance in which a mortgagor has filed a petition for relief under the United States Bankruptcy Code, no mortgagee shall file an action under this Part a complaint to foreclose a mortgage secured by residential real estate until the requirements of this Section have been satisfied.

(c) Notwithstanding any other provision to the contrary, with respect to a particular mortgage secured by residential real estate, the procedures and forbearances described in this Section apply only once per subject mortgage. Except for mortgages secured by residential real estate in which any mortgagor has filed for relief under the United States Bankruptcy Code, if a mortgage secured by residential real estate becomes delinquent by more than 30 days the mortgagee shall send via certified first class postage prepaid U.S. mail, return receipt requested, a notice advising the mortgagor that he or she may wish to seek approved housing counseling. Notwithstanding anything to the contrary in this Section, nothing shall preclude the mortgagor and mortgagee from communicating with each other during the initial 30 days of delinquency or reaching agreement on a sustainable loan workout plan, or both.

The duty to provide a notice and subsequent grace period under this Section prior to filing a legal action under this Part arises when a delinquency of 30 days exists and shall not be waived. This Section does not supersede an automatic stay under the United States Bankruptcy Code that exists concurrent with any of the time frames outlined in this Section. The duty under this Section and any associated time frames shall be tolled if an automatic stay under the United States Bankruptcy Code is in place until the stay is no longer in place.

No foreclosure action under Part 15 of Article XV of the Code of Civil Procedure shall be instituted on a mortgage secured by residential real estate before mailing the notice described in this subsection (c).

The notice required in this subsection (c) 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 MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING AGENCY. 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 numbers, fax numbers, and mailing addresses of the mortgagee and the servicer responsible for collecting payments. The notice shall also list the investor of the loan telephone number, fax number, and mailing address of the mortgagee. No language, other than language substantially similar to the language prescribed in this subsection (c), shall be included in the notice. Notwithstanding any other provision to the contrary, the grace period notice required by this subsection (c) may be combined with a counseling notification required under federal law.

The sending of the notice required under this subsection (c) means depositing or causing to be deposited into the United States mail an envelope with certified first class postage prepaid, return receipt requested, that contains the document to be delivered. An The envelope containing the notice shall be addressed to each individual or entity that is a signatory on the mortgage the mortgagor at the common address of the residential real estate securing the mortgage in addition to the mailing address of record for each individual or entity who is a signatory on the mortgage.

(d) Until 30 days after mailing the notice provided for under subsection (c) of this Section, no legal action shall be instituted under this Part 15 of Article XV of the Code of Civil Procedure.

(e) If, within the 30-day period provided under subsection (d) of this Section, an approved counseling agency provides written notice to the mortgagee that the mortgagor is seeking approved counseling services, then no legal action under this Part 15 of Article XV of the Code of Civil Procedure shall be instituted for 30 days after the date of that notice. The date that such notice is sent shall be stated in the notice, and shall be sent to the address or fax number contained in the grace period notice required under subsection (c) of this Section. During the 30-day period provided under this subsection (e), the mortgagor or counselor or both may prepare and proffer to the mortgagee a proposed sustainable loan workout plan. The mortgagee will then determine whether to accept the proposed sustainable loan workout plan. If the mortgagee and the mortgagor agree to a sustainable loan workout plan, then no legal action under this Part 15 of Article XV of the Code of Civil Procedure shall be instituted for as long as the sustainable loan workout plan is complied with by the mortgagor.

The agreed sustainable loan workout plan and any modifications thereto must be in writing and signed by the mortgagee and the mortgagor.

Upon written notice to the mortgagee, the mortgagor may change approved counseling agencies, but such a change does not entitle the mortgagor to any additional period of forbearance.

(e-5) Complying with the requirements of subsections (c), (d), and (e) of this Section is a condition precedent to filing a legal action under this Part. Failure to comply with the requirements of subsections (c), (d), and (e) constitutes an affirmative matter that defeats a legal action under this Part. The requirements of subsections (c), (d), and (e) are not allegations for purposes of subsection (c) of Section 15-1504.

(f) If the mortgagor fails to comply with the sustainable loan workout plan, then nothing in this Section shall be construed to impair the legal rights of the mortgagee to enforce the contract.

(g) A counselor employed by a housing counseling agency or the housing counseling agency that in good faith provides counseling shall not be liable to a mortgagee or mortgagor for civil damages, except for willful or wanton misconduct on the part of the counselor in providing the counseling.

(h) There shall be no waiver of any provision of this Section.

(i) It is the General Assembly's intent that compliance with this Section shall not prejudice a mortgagee in ratings of its bad debt collection or calculation standards or policies.

(j) This Section does shall not apply, or shall cease to apply, to residential real estate that is not occupied as a principal residence by an individual or entity who is a signatory on the mortgage at the time the duty to mail the notice described in subsection (c) arises the mortgagor.

(k) This Section is repealed July 1, 2027 2016.

(l) This reenacted Section applies to causes of action that exist on or after July 1, 2016 as if this Section had continued in effect on and after that date and had never been repealed. Actions taken in compliance with this Section on or after July 1, 2016 and before the effective date of this amendatory Act of the 100th General Assembly are ratified, validated, and confirmed. The changes made to subsections (a) through (k) of this Section by this amendatory Act of the 100th General Assembly apply to causes of action arising on or after the effective date of this amendatory Act of the 100th General Assembly.

(Source: P.A. 98-25, eff. 6-20-13.)

Section 99. Effective date. This Act takes effect upon becoming law.".