Public Act 098-0025
 
HB0099 EnrolledLRB098 03846 HEP 33862 b


  
    AN ACT concerning civil law.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Code of Civil Procedure is amended  by 
changing Section 15-1502.5 as follows:
 
    (735 ILCS 5/15-1502.5)
    (Section scheduled to be repealed on July 1, 2013)
    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) Except in the circumstance in which a mortgagor has 
filed a petition for relief under the United States Bankruptcy 
Code, no mortgagee shall file 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 U.S. mail 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. 
    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 
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 first-class postage prepaid that 
contains the document to be delivered.  The envelope shall be 
addressed to the mortgagor at the common address of the 
residential real estate securing 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 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 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 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. 
    (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 shall not apply, or shall cease to apply, 
to residential real estate that is not occupied as a principal 
residence by the mortgagor. 
    (k) This Section is repealed July 1, 2016 2013. 

(Source: P.A. 95-1047, eff. 4-6-09; 96-1419, eff. 10-1-10.)
 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.