Full Text of SB2981 93rd General Assembly
SB2981eng 93RD GENERAL ASSEMBLY
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| AN ACT concerning housing.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The Illinois Housing Development Act is amended
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| by adding Section 7.24i as follows:
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| (20 ILCS 3805/7.24i new)
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| Sec. 7.24i. Homeowners' Emergency Mortgage Assistance | 8 |
| Program.
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| (a) The Authority shall administer the Homeowners' | 10 |
| Emergency
Mortgage Assistance Program.
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| (b) Definitions. In this Section:
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| "Chairman" means the Chairman of the Illinois Housing
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| Development Authority (IHDA) or the Chairman's duly appointed | 14 |
| designee, who must be an employee of IHDA.
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| "Fund" means the Emergency Mortgage Assistance Fund | 16 |
| created in this Section.
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| "Single family residence" means a structure maintained and | 18 |
| used as a single family dwelling unit located in Illinois. Even | 19 |
| if a dwelling unit shares one or more walls with another | 20 |
| dwelling unit, it is a single family residence for the purpose | 21 |
| of this Section if it has direct access to a street or | 22 |
| thoroughfare and does not share hot water equipment, heating | 23 |
| facilities, or any other essential facilities or service with | 24 |
| any other dwelling unit.
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| "Gross household income" means the total income of a
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| mortgagor, the mortgagor's spouse, children residing in the | 27 |
| same
residence as the mortgagor, and any other person living in | 28 |
| the
residence that is declared by the mortgagor as a dependent | 29 |
| for
federal income tax purposes.
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| "Housing expense" means the sum of the mortgagor's monthly
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| maintenance, utility, and hazard insurance expenses, taxes, | 32 |
| and
required mortgage payments, including escrows.
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| "Fund" means the Emergency Mortgage Assistance Fund | 2 |
| created in this Section.
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| "Mortgage" means a secured consensual interest or lien | 4 |
| created by a real estate mortgage, a trust deed on real estate, | 5 |
| or the like.
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| "Net effective income" means the gross household income of | 7 |
| the
mortgagor less city, State, and federal income and social | 8 |
| security
taxes.
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| "Household" means 2 or more persons residing together or a
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| person living alone.
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| (c) Homeowners' Emergency Mortgage Assistance Program.
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| (1) In general. The Authority shall establish a program to | 13 |
| provide homeowners alternatives to foreclosure by providing | 14 |
| for temporary
emergency mortgage payments on mortgage loans | 15 |
| secured by single-family residences when:
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| (A) the mortgagor is an existing participant of the | 17 |
| program prior to default, as described in item (B) of this | 18 |
| subsection, and has paid a participant fee of $5 per year | 19 |
| to be deposited into the Fund in accordance with rules | 20 |
| adopted by the Authority;
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| (B) the mortgagor is in default by at least one full | 22 |
| monthly installment due under the
terms of the mortgage | 23 |
| after the application of all, if any, partial
payments that | 24 |
| have been accepted by the mortgagee but not yet applied
to | 25 |
| the mortgage account;
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| (C) the mortgagor is suffering financial hardship
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| through no fault of the mortgagor
that renders the | 28 |
| mortgagor unable to correct the
default within 60 days | 29 |
| after receiving proper notice from the mortgagee of the | 30 |
| default;
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| (D) the
mortgagor will likely be able to resume full | 32 |
| mortgage payments
not later than 18 months after the | 33 |
| earliest date that assistance payments are provided under | 34 |
| this Section and the mortgagor will likely be able to
pay | 35 |
| the mortgage in full by its maturity date or by a
later | 36 |
| date agreed upon by the mortgagee;
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| (E) the property in default is the mortgagor's
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| principal residence;
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| (F) the mortgagor has applied for
assistance in | 4 |
| accordance with this Section and rules
adopted by the | 5 |
| Authority for this Section; and
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| (G) the mortgagor's gross household income does not
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| exceed 100% of area median income adjusted for family
size | 8 |
| as identified by the U.S. Department of Housing and Urban | 9 |
| Development.
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| (2) Effect of finding of ineligibility. If, after reviewing | 11 |
| an
application for assistance
submitted under subsection (e), | 12 |
| the Chairman determines that
the mortgagor has not met the | 13 |
| conditions of eligibility
described in paragraph (1) of this | 14 |
| subsection, the mortgagor
is prohibited from re-applying for | 15 |
| assistance under this
Section until the expiration of a 6-month | 16 |
| period beginning on
the date of that determination unless there | 17 |
| is a material
change in the financial circumstances of the | 18 |
| mortgagor.
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| (3) Determination of financial hardship. In determining | 20 |
| whether a
financial hardship is incurred through
no fault of | 21 |
| the mortgagor, the Chairman may consider all necessary | 22 |
| information
including the mortgagor's employment record, | 23 |
| credit history,
and current income. Assistance may be granted | 24 |
| in no-fault circumstances including, but not
be limited to:
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| (A) loss of job of a member of the household;
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| (B) salary, wage, or earnings reduction of a member
of | 27 |
| the household;
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| (C) injury, disability, or illness of a member of
the | 29 |
| household;
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| (D) divorce or separation in the household;
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| (E) death of a member of the household; or
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| (F) major unanticipated household expense.
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| (4) Designated agencies. The Authority shall, by rule, | 34 |
| establish a procedure to designate and approve not-for-profit | 35 |
| corporations with offices in Illinois as agencies to assist in | 36 |
| implementing the
program. Agencies designated and approved |
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| under this paragraph shall assist, at the direction of the | 2 |
| Chairman, eligible mortgagors in completing the application | 3 |
| for assistance and, to the extent that the agency is willing | 4 |
| and able to do so, provide counseling.
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| (d) Notice of default. | 6 |
| (1) Any notice by a mortgagee sent to the mortgagor | 7 |
| regarding a default payment must include a statement in large | 8 |
| bold type substantially similar to the following: IF YOU NEED | 9 |
| HELP PAYING YOUR
MORTGAGE AND WANT TO AVOID PENALTIES, YOU MAY | 10 |
| BE A PARTICIPANT IN THE STATE'S
EMERGENCY MORTGAGE ASSISTANCE | 11 |
| PROGRAM. TO DETERMINE YOUR ELIGIBILITY FOR ASSISTANCE CALL | 12 |
| 1-8xx- (insert appropriate
toll-free number) IMMEDIATELY.
THIS | 13 |
| DOES NOT CHANGE THE RIGHT OF YOUR LENDER TO ENFORCE THE | 14 |
| MORTGAGE
AGREEMENT.
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| (2) Except as provided in subsection (d)(1), nothing in | 16 |
| this Section shall impose any additional duty or responsibility | 17 |
| under this Section on the mortgagee. Failure by the mortgagee | 18 |
| to provide the statement described in subsection (d)(1) shall | 19 |
| not impair the ability of the mortgagee to collect any sums due | 20 |
| on the note secured by the mortgage or enforce its lien rights | 21 |
| in the property secured by the mortgage and shall not subject | 22 |
| the mortgagee to any liability to the mortgagor. | 23 |
| (e) Application for assistance.
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| (1) The Authority may pay designated agencies a fee from | 25 |
| the Fund,
in an amount determined by the Chairman, for | 26 |
| rendering
assistance under this Section. This assistance may | 27 |
| include foreclosure intervention and mortgage workout | 28 |
| counseling.
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| (2) Form; contents. An application for assistance under
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| this Section shall be on a form prescribed, by rule, by the
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| Chairman and shall include a financial statement disclosing
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| assets and liabilities of the mortgagor, whether singly or
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| jointly held, and all household income regardless of source.
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| (3) Effect of misrepresentation. A mortgagor who
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| intentionally misrepresents any material financial information
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| in connection with the filing of an application for assistance
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| under this Section may be denied assistance and required to
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| immediately repay any amount of assistance received. The | 3 |
| Authority must, by rule,
establish a process for determining | 4 |
| intentional
misrepresentation and for the prompt appeal of | 5 |
| positive
determinations.
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| (4) Availability. An application for assistance under
this | 7 |
| Section may be obtained from a designated agency or any other | 8 |
| financial counseling assistance agency that elects to make | 9 |
| applications available.
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| (5) Determination on application.
The Chairman must | 11 |
| determine eligibility of a
mortgagor for assistance under this | 12 |
| Section not later
than 60 days after receipt of the application | 13 |
| of the
mortgagor.
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| Not later than 5 business days after making the
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| determination on an application for assistance, the
Chairman | 16 |
| shall notify the mortgagor and the mortgagee as
to whether the | 17 |
| application has been approved or
disapproved.
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| (f) Assistance payments.
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| (1) Amount to bring mortgage current. If the Chairman or
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| designated agency determines that a mortgagor is eligible for
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| assistance under this Section, the Authority or designated
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| agency shall pay to the mortgagee the full amount due to the
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| mortgagee under the terms of the mortgage without regard to
any | 24 |
| acceleration under the mortgage, or the full amount of any
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| alternative mortgage payments agreed to by the mortgagee and
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| mortgagor on the date that the application is approved. This
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| amount shall include the amount of principal, interest, taxes,
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| assessments, ground rents, hazard insurance, and mortgage
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| insurance premiums. The initial payment by each agency shall be | 30 |
| an amount that makes the mortgage current, including reasonable | 31 |
| costs and reasonable attorney fees already incurred by the | 32 |
| mortgagee.
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| (2) Monthly assistance payments.
The Authority shall make
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| monthly mortgage assistance payments to the mortgagee on
behalf | 35 |
| of the mortgagor under this subsection in accordance with the | 36 |
| terms of the note secured by the mortgage or any change in |
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| terms as agreed to by the mortgagee and mortgagor.
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| A mortgagor on whose behalf the Authority is making the | 3 |
| mortgage assistance
payments must pay his or her monthly | 4 |
| payments to the
Authority. The payments shall be in
an amount | 5 |
| that will not cause the mortgagor's total
housing expense to | 6 |
| exceed 35% of the mortgagor's net
effective income. This is the | 7 |
| maximum amount the
mortgagor can be required to pay during the | 8 |
| 18 months
that a mortgagor is eligible for mortgage assistance.
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| The mortgagor must mail the payments at least 7 days
before | 10 |
| each mortgage payment is due under the mortgage.
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| The Authority shall send by the payment due date the
total | 12 |
| mortgage payment directly to the mortgagee along with a coupon | 13 |
| or other account-identifying information regarding the | 14 |
| mortgage, as required by the mortgagee.
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| (3) Review upon delinquency. If the mortgagor fails to
pay | 16 |
| to the Authority any amounts due
directly from the mortgagor | 17 |
| under this subsection, not later
than 15 days after the due | 18 |
| date the Chairman or designated
agency shall review the | 19 |
| mortgagor's financial circumstances to
determine whether a | 20 |
| delinquency in payments due from the
mortgagor under this | 21 |
| subsection is the result of a material change in
the | 22 |
| mortgagor's financial circumstances since the payment
amount | 23 |
| was last determined. If the delinquency is not the
result of a | 24 |
| material change in the mortgagor's financial circumstances,
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| the Chairman may terminate future
mortgage assistance | 26 |
| payments. If the delinquency is the
result of a material | 27 |
| change, the Chairman shall
modify the mortgagor's required | 28 |
| payments as the Chairman or
designated agency determines. For | 29 |
| one time only, and at the
sole discretion of the Chairman, the | 30 |
| delinquency incurred for
non-financial reasons may be | 31 |
| satisfied by the Authority if it
appears that the payment will | 32 |
| prevent foreclosure.
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| (4) Period for assistance. Payments under this
subsection | 34 |
| may be provided for a period not to exceed 18
months, either | 35 |
| consecutively or non-consecutively. The
Chairman shall | 36 |
| establish procedures for periodic review of the
mortgagor's |
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| financial circumstances for the purpose of
determining the | 2 |
| necessity for continuation, termination, or
adjustment of the | 3 |
| amount of the payments.
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| (5) Rules; availability of funds; necessity. Assistance | 5 |
| payments from the Fund may be made only according to rules | 6 |
| adopted by the Authority and are subject to the availability of | 7 |
| funds. Payments may be made from the Fund only if it is not | 8 |
| otherwise possible to prevent a foreclosure.
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| (g) Repayment of assistance.
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| (1) Assistance loan. The amount by which the assistance | 11 |
| payments made by
the Authority to the mortgagee exceeds
the | 12 |
| amount of payments made by the mortgagor to the Authority
are a | 13 |
| loan by the Authority to the mortgagor. The loan may be | 14 |
| evidenced by any
documents that the Authority determines, by | 15 |
| rule, are
necessary to protect the interests of the State.
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| (2) Repayment of assistance loan. Before making assistance | 17 |
| payments under
this Section
on behalf of a mortgagor, the | 18 |
| Authority must enter into an agreement with the mortgagor for | 19 |
| repayment
of all mortgage assistance provided under subsection | 20 |
| (f) plus
interest as provided in paragraph (3) of this | 21 |
| subsection. The
agreement must provide for monthly payments by | 22 |
| the mortgagor
to the Authority that:
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| (A) shall begin once the Chairman has determined that | 24 |
| continuation of mortgage
assistance payments to the | 25 |
| mortgagee is unnecessary; and
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| (B) shall be in an amount determined as follows:
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| (i) if the mortgagor's total housing expense is
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| less than 35% of the mortgagor's net effective
income, | 29 |
| the mortgagor must pay to the Authority the difference | 30 |
| between 35% of the
mortgagor's net effective income and | 31 |
| the mortgagor's
total housing expense unless otherwise | 32 |
| determined by
the Chairman after examining
the | 33 |
| mortgagor's financial circumstances and ability
to | 34 |
| contribute to repayment of the mortgage
assistance; or
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| (ii) if the mortgagor's total housing expense
is | 36 |
| more than 35% of the mortgagor's net effective
income, |
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| repayment of the mortgage assistance shall
be deferred | 2 |
| until the mortgagor's total housing
expense is less | 3 |
| than 35% of the mortgagor's net
effective income.
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| (C) Notwithstanding subparagraphs (A) and (B) of
this | 5 |
| paragraph, if repayment of mortgage assistance is
not made | 6 |
| by the date that the mortgage is paid in full,
the | 7 |
| mortgagor must make mortgage assistance repayments in
an | 8 |
| amount not less than the previous regular mortgage
payment | 9 |
| until the mortgage assistance is repaid.
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| (3) Interest. Interest shall accrue on all mortgage
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| assistance payments made under this Section at the rate,
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| determined monthly by the Chairman, equal to the then current
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| average yield on outstanding 20-year bonds issued by the
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| Secretary of the United States Treasury under Section 3102 of
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| Title 31, United States Code and shall accrue only during the
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| period in which the mortgagor is required to make repayment
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| under this subsection.
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| (4) Lien to secure repayment of assistance. Repayment of
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| amounts owed to the Authority from a
mortgagor shall be secured | 20 |
| by a mortgage lien on the property
and by any other obligation | 21 |
| that the Authority may, by rule,
require. The lien or other | 22 |
| security interest of the Authority
may not take priority over | 23 |
| any other secured lien or secured
interest in effect against | 24 |
| the mortgagor's property on the
date assistance payments begin. | 25 |
| The Authority may allow
subordination of the mortgage | 26 |
| assistance lien only if the
subordination is in the best | 27 |
| interest of the homeowner and
necessary to permit the mortgagor | 28 |
| to obtain a home improvement
loan for repairs necessary to | 29 |
| preserve the property.
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| (5) Time for repayment. Payments under this subsection
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| shall be made by the mortgagor to the Authority not later than | 32 |
| 14 days after each mortgage payment is
due under the mortgage, | 33 |
| or in the case of repayment after the
mortgage has been paid in | 34 |
| full, not later than the date the
mortgage payments were due | 35 |
| under the mortgage.
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| (h) Emergency Mortgage Assistance Fund. |
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| (1) A special income-earning Fund is hereby created in the | 2 |
| State treasury, known as the Emergency Mortgage Assistance | 3 |
| Fund. | 4 |
| (2) All moneys paid into the Fund together with all | 5 |
| accumulated undistributed income thereon shall be held as a | 6 |
| special fund in the State treasury. The Fund shall be used | 7 |
| solely for the purpose of
providing assistance to mortgagors | 8 |
| who are eligible under the requirements of this Section. | 9 |
| (3) Notwithstanding any other provisions of this Section, | 10 |
| the payment
of assistance from the fund shall be subject
to the | 11 |
| availability of funds, and no mortgagor shall
have any vested
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| right in the Fund as a beneficiary or otherwise. Before seeking | 13 |
| assistance from the Fund, the mortgagor or beneficiary seeking | 14 |
| assistance shall apply for assistance on a form provided by the | 15 |
| Chairman. The form shall include any information the Chairman | 16 |
| may reasonably require in order to determine that assistance is | 17 |
| appropriate. | 18 |
| (4) The Authority may accept contributions made by banks | 19 |
| and other lending institutions to satisfy their | 20 |
| responsibilities under the federal Community Reinvestment Act | 21 |
| of 1977. | 22 |
| (i) Adoption of rules. | 23 |
| (1) The Authority may adopt any rules necessary to | 24 |
| implement, administer, and enforce this Section. | 25 |
| (2) In adopting rules concerning the collection of fees | 26 |
| under subsection (c), the Authority may receive the assistance | 27 |
| of the Department of Revenue to collect fees at the time income | 28 |
| tax returns are filed or of the collector at the time property | 29 |
| taxes are paid.
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| Section 10. The State Finance Act is amended by changing | 31 |
| Section 8h and by adding Section
5.625 as follows:
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| (30 ILCS 105/5.625 new)
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| Sec. 5.625. The Emergency Mortgage Assistance Fund.
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| (30 ILCS 105/8h)
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| Sec. 8h. Transfers to General Revenue Fund. | 3 |
| Notwithstanding any other
State law to the contrary, the | 4 |
| Director of the
Governor's Office of Management and Budget
may | 5 |
| from time to time direct the State Treasurer and Comptroller to | 6 |
| transfer
a specified sum from any fund held by the State | 7 |
| Treasurer to the General
Revenue Fund in order to help defray | 8 |
| the State's operating costs for the
fiscal year. The total | 9 |
| transfer under this Section from any fund in any
fiscal year | 10 |
| shall not exceed the lesser of 8% of the revenues to be | 11 |
| deposited
into the fund during that year or 25% of the | 12 |
| beginning balance in the fund.
No transfer may be made from a | 13 |
| fund under this Section that would have the
effect of reducing | 14 |
| the available balance in the fund to an amount less than
the | 15 |
| amount remaining unexpended and unreserved from the total | 16 |
| appropriation
from that fund for that fiscal year. This Section | 17 |
| does not apply to any
funds that are restricted by federal law | 18 |
| to a specific use or to any funds in
the Motor Fuel Tax Fund , | 19 |
| the Emergency Mortgage Assistance Fund, or the Hospital | 20 |
| Provider Fund. Notwithstanding any
other provision of this | 21 |
| Section,
the total transfer under this Section from the Road | 22 |
| Fund or the State
Construction Account Fund shall not exceed 5% | 23 |
| of the revenues to be deposited
into the fund during that year.
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| In determining the available balance in a fund, the | 25 |
| Director of the
Governor's Office of Management and Budget
may | 26 |
| include receipts, transfers into the fund, and other
resources | 27 |
| anticipated to be available in the fund in that fiscal year.
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| The State Treasurer and Comptroller shall transfer the | 29 |
| amounts designated
under this Section as soon as may be | 30 |
| practicable after receiving the direction
to transfer from the | 31 |
| Director of the Governor's Office of Management and
Budget.
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| (Source: P.A. 93-32, eff. 6-20-03; 93-659, eff. 2-3-04.)
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| Section 99. Effective date. This Act takes effect upon | 34 |
| becoming law. |
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