HB2832 EngrossedLRB098 10729 OMW 41064 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Counties Code is amended by adding Section
53-5010.5 as follows:
 
6    (55 ILCS 5/3-5010.5 new)
7    Sec. 3-5010.5. Fraud referral and review.
8    (a) Legislative findings. The General Assembly finds that
9property fraud, including fraudulent filings intended to cloud
10or fraudulently transfer title to property by recording false
11or altered documents and deeds, is a rapidly growing problem
12throughout the State. In order to combat the increase in the
13number of these filings, a recorder may establish a process to
14review and refer documents suspected to be fraudulent.
15    (b) Definitions. The terms "recording" and "filing" are
16used interchangeably in this Section.
17    (c) Establishment and use of a fraud referral and review
18process. A recorder who establishes a fraud referral and review
19process under the provisions of this Section may use it to
20review deeds and instruments and refer any of them to an
21administrative law judge for review pursuant to subsection (g)
22of this Section that cause the recorder to reasonably believe
23that the filing may be fraudulent, unlawfully altered, or

 

 

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1intended to unlawfully cloud or transfer the title of any real
2property. The recorder may enter into an intergovernmental
3agreement with local law enforcement officials for the purposes
4of this referral and review. A recorder may request that the
5Secretary of the Department of Financial and Professional
6Regulation assist in reviewing possible fraudulent filings.
7Upon request, the Secretary, or his or her designee, shall
8assist in identifying the validity of filings. The recorder
9shall notify the Secretary when a document suspected to be
10fraudulent is discovered.
11    In counties with a population of less than 3 million, a
12recorder shall provide public notice 90 days before the
13establishment of the fraud referral and review process. The
14notice shall include a statement of the recorder's intent to
15create a fraud referral and review process and shall be
16published in a newspaper of general circulation in the county
17and, if feasible, posted on the recorder's website and at the
18recorder's office or offices.
19    In determining whether to refer a document to an
20administrative law judge for review, a recorder may take into
21consideration any of the following factors:
22        (1) whether the owner of the property or his or her
23    designated representative has reported to the recorder
24    that another individual is attempting or has attempted to
25    record a fraudulent deed or other instrument upon the
26    property;

 

 

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1        (2) whether a law enforcement official has contacted
2    the recorder indicating that he or she has probable cause
3    to suspect title or recording fraud;
4        (3) whether the filer's name has a copyright attached
5    to it or the property owner's name has nonstandard
6    punctuation attached to it;
7        (4) whether the documents assert fines that do not
8    exist or have no basis under current law or that require
9    payment in gold or silver;
10        (5) whether the documents are maritime liens, or liens
11    under the Federal Maritime Lien Act or the Preferred Ship
12    Mortgage Act, or not authorized by the United States Coast
13    Guard;
14        (6) whether the documents are land patents not
15    authorized and certified by the United States Department of
16    the Interior Bureau of Land Management;
17        (7) whether the documents are representing that the
18    subject of the lien is releasing itself from a lien held by
19    another entity, with no apparent cooperation or
20    authorization provided by the lienholder;
21        (8) whether the documents are protesting or disputing a
22    foreclosure proceeding that are not filed within the
23    foreclosure suit and with the court presiding over the
24    matter;
25        (9) whether the documents are Uniform Commercial Code
26    filings referencing birth certificates or other private

 

 

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1    records that are not in compliance with Section 9-501 of
2    the Uniform Commercial Code;
3        (10) whether the documents are re-recording deeds to
4    re-notarize or attach notary certification if prior
5    notarization already appears unaltered on the document of
6    record;
7        (11) whether the documents are asserting diplomatic
8    credentials or immunity, non-United States citizenship, or
9    independence from the laws of the United States;
10        (12) whether the documents are claims that a bank
11    cannot hold title after a foreclosure;
12        (13) whether the documents are deeds not properly
13    signed by the last legal owner of record or his or her
14    court appointed representative or attorney-in-fact under a
15    power of attorney;
16        (14) whether the documents are manipulated or altered
17    federal or State legal or court forms that release a lien;
18        (15) whether a document is not related to a valid
19    existing or potential adverse transaction, existing lien,
20    or judgment of a court of competent jurisdiction;
21        (16) a document that is not related to a valid existing
22    or potential commercial or financial transaction, existing
23    agricultural or other lien, or judgment of a court of
24    competent jurisdiction;
25        (17) whether the document is filed with the intent to
26    harass or defraud the person identified in the record or

 

 

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1    any other person;
2        (18) whether the document is filed with the intent to
3    harass or defraud any member of a governmental office,
4    including, but not limited to, the recorder's office, local
5    government offices, the State of Illinois, or the Federal
6    government; and
7        (19) whether the documents are previous court
8    determinations, including a previous determination by a
9    court of competent jurisdiction that a particular document
10    is fraudulent, invalid, or forged.
11    (d) Determinations. If a recorder determines, after review
12by legal staff and counsel, that a deed or instrument may be
13fraudulent, unlawfully altered, or intended to unlawfully
14cloud or transfer the title of any real property, he or she
15shall refer the deed or instrument to an administrative law
16judge for review pursuant to subsection (g) of this Section.
17The recorder shall place a Notice of Referral in his or her
18Property Index identifying the document, corresponding
19document number in question, and the date of referral. The
20recorder shall also notify the parties set forth in subsection
21(e) of this Section. The recorder may, at his or her
22discretion, notify law enforcement officials regarding a
23filing determined to be fraudulent, unlawfully altered, or
24intended to unlawfully cloud or transfer the title of any real
25property.
26    (e) Notice. The recorder shall use county property tax

 

 

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1records to identify and provide notice to the last owner of
2record by telephone, if available, and certified mail both
3when: (1) a deed or instrument has been referred for review and
4determination; and (2) a final determination has been made
5regarding the deed or instrument.
6    (f) Administrative decision. The recorder's decision to
7add a Notice of Referral and refer a document for review is a
8final administrative decision that is subject to review by the
9circuit court of the county where the real property is located
10under the Administrative Review Law. The standard of review by
11the circuit court shall be de novo.
12    (g) Referral and review process. The recorder shall bring a
13case to its county department of administrative hearings and,
14within 10 business days after receipt, an administrative law
15judge shall schedule a hearing to occur no later than 30 days
16after receiving the referral. Notice of the hearing shall be
17provided by the administrative law judge to the filer, or the
18party represented by the filer, of the suspected fraudulent
19document, the legal representative of the recorder of deeds who
20referred the case, and the last owner of record, as identified
21in the referral.
22    If a preponderance of the evidence shows the document in
23question to be fraudulent, the administrative law judge shall
24rule the document to be fraudulent and forward the judgment to
25all the parties identified in this subsection. Upon receiving
26notice of the judgment of fraud, the recorder shall, within 5

 

 

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1business days, record a new document that includes a copy of
2the judgment in front of the Notice of Referral that shall
3clearly state that the document in question has been found to
4be fraudulent and shall not be considered to affect the chain
5of title of the property in any way.
6    If the administrative law judge finds the document to be
7legitimate, the recorder shall, within 5 business days after
8receiving notice, record a copy of the judgment.
9    A decision by an administrative law judge shall not
10preclude a State's attorney or sheriff from proceeding with a
11criminal investigation or criminal charges. If a county does
12not have an administrative law judge that specializes in public
13records, one shall be appointed within 3 months after the
14effective date of this amendatory Act of the 98th General
15Assembly, or the original case shall be forwarded to the proper
16circuit court with jurisdiction.
17    (h) Fees. The recorder shall retain any filing fees
18associated with filing a deed or instrument that is determined
19to be fraudulent, unlawfully altered, or intended to unlawfully
20cloud or transfer the title of any real property under this
21Section.
22    (i) Liability. Neither a recorder nor any of his or her
23employees or agents shall be subject to personal liability by
24reason of any error or omission in the performance of any duty
25under this Section, except in case of willful or wanton
26conduct. Neither the recorder nor any of his or her employees

 

 

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1shall incur liability for the referral or review, or failure to
2refer or review, a document or instrument under this Section.
3    (j) Applicability. This Section applies only to filings
4provided to the recorder on and after the effective date of
5this amendatory Act of the 98th General Assembly.
6    (k) This Section is repealed June 1, 2018.
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.