|Public Act 098-0025|
|HB0099 Enrolled||LRB098 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:
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(Section scheduled to be repealed on July 1, 2013)
(a) As used in this Section:
"Approved counseling agency" means a housing counseling
agency approved by the U.S. Department of Housing and Urban
"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
"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
A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED
FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL
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
(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
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
(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,
(Source: P.A. 95-1047, eff. 4-6-09; 96-1419, eff. 10-1-10.)
This Act takes effect upon