Illinois General Assembly - Full Text of SB0568
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Full Text of SB0568  100th General Assembly

SB0568sam002 100TH GENERAL ASSEMBLY

Sen. Iris Y. Martinez

Filed: 5/2/2017

 

 


 

 


 
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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 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10    been internally repealed, and make additional changes to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

 

 

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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

 

 

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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. If Except for
26mortgages secured by residential real estate in which any

 

 

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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 U.S. mail a notice advising the mortgagor that
5he or she may wish to seek approved housing counseling.
6Notwithstanding anything to the contrary in this Section,
7nothing shall preclude the mortgagor and mortgagee from
8communicating with each other during the initial 30 days of
9delinquency or reaching agreement on a sustainable loan workout
10plan, or both.
11    The duty to provide a notice and subsequent grace period
12under this Section prior to filing a legal action under this
13Part arises when a delinquency of 30 days exists and shall not
14be waived. This Section does not supersede an automatic stay
15under the United States Bankruptcy Code that exists concurrent
16with any of the time frames outlined in this Section. The duty
17under this Section and any associated time frames shall be
18tolled if an automatic stay under the United States Bankruptcy
19Code is in place until the stay is no longer in place.
20    No foreclosure action under Part 15 of Article XV of the
21Code of Civil Procedure shall be instituted on a mortgage
22secured by residential real estate before mailing the notice
23described in this subsection (c).
24    The notice required in this subsection (c) shall state the
25date on which the notice was mailed, shall be headed in bold
2614-point type "GRACE PERIOD NOTICE", and shall state the

 

 

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1following in 14-point type: "YOUR LOAN IS MORE THAN 30 DAYS
2PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY
3BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING.
4YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE
5TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD,
6THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU.
7YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU
8OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING
9AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED
10FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL
11REGULATION."
12    The notice shall also list the Department's current
13consumer hotline, the Department's website, and the telephone
14number, fax number, and mailing address of the mortgagee. No
15language, other than language substantially similar to the
16language prescribed in this subsection (c), shall be included
17in the notice. Notwithstanding any other provision to the
18contrary, the grace period notice required by this subsection
19(c) may be combined with a counseling notification required
20under federal law.
21    The sending of the notice required under this subsection
22(c) means depositing or causing to be deposited into the United
23States mail an envelope with first class postage prepaid that
24contains the document to be delivered. The envelope shall be
25addressed to the mortgagor at the common address of the
26residential real estate securing the mortgage.

 

 

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1    (d) Until 30 days after mailing the notice provided for
2under subsection (c) of this Section, no legal action shall be
3instituted under this Part 15 of Article XV of the Code of
4Civil Procedure.
5    (e) If, within the 30-day period provided under subsection
6(d) of this Section, an approved counseling agency provides
7written notice to the mortgagee that the mortgagor is seeking
8approved counseling services, then no legal action under this
9Part 15 of Article XV of the Code of Civil Procedure shall be
10instituted for 30 days after the date of that notice. The date
11that such notice is sent shall be stated in the notice, and
12shall be sent to the address or fax number contained in the
13grace period notice required under subsection (c) of this
14Section. During the 30-day period provided under this
15subsection (e), the mortgagor or counselor or both may prepare
16and proffer to the mortgagee a proposed sustainable loan
17workout plan. The mortgagee will then determine whether to
18accept the proposed sustainable loan workout plan. If the
19mortgagee and the mortgagor agree to a sustainable loan workout
20plan, then no legal action under this Part 15 of Article XV of
21the Code of Civil Procedure shall be instituted for as long as
22the sustainable loan workout plan is complied with by the
23mortgagor.
24    The agreed sustainable loan workout plan and any
25modifications thereto must be in writing and signed by the
26mortgagee and the mortgagor.

 

 

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1    Upon written notice to the mortgagee, the mortgagor may
2change approved counseling agencies, but such a change does not
3entitle the mortgagor to any additional period of forbearance.
4    (f) If the mortgagor fails to comply with the sustainable
5loan workout plan, then nothing in this Section shall be
6construed to impair the legal rights of the mortgagee to
7enforce the contract.
8    (g) A counselor employed by a housing counseling agency or
9the housing counseling agency that in good faith provides
10counseling shall not be liable to a mortgagee or mortgagor for
11civil damages, except for willful or wanton misconduct on the
12part of the counselor in providing the counseling.
13    (h) There shall be no waiver of any provision of this
14Section.
15    (i) It is the General Assembly's intent that compliance
16with this Section shall not prejudice a mortgagee in ratings of
17its bad debt collection or calculation standards or policies.
18    (j) This Section does shall not apply, or shall cease to
19apply, to residential real estate that is not occupied as a
20principal residence by an individual or entity who is a
21signatory on the mortgage at the time the duty to mail the
22notice described in subsection (c) arises the mortgagor.
23    (k) This Section is repealed July 1, 2027 2016.
24    (l) This reenacted Section with changes made to subsections
25(a) through (k) applies to causes of action that arise on or
26after the effective date of this amendatory Act of the 100th

 

 

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1General Assembly.
2(Source: P.A. 98-25, eff. 6-20-13.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.".