Rep. Lou Lang

Filed: 4/12/2013

 

 


 

 


 
09800HB2832ham001LRB098 10729 OMW 44437 a

1
AMENDMENT TO HOUSE BILL 2832

2    AMENDMENT NO. ______. Amend House Bill 2832 by replacing
3everything after the enacting clause with the following:
 
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.

 

 

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1    (c) Establishment and use of a fraud referral and review
2process. A recorder who establishes a fraud referral and review
3process under the provisions of this Section may use it to
4review deeds and instruments and refer any of them to an
5administrative law judge for review pursuant to subsection (g)
6of this Section that cause the recorder to reasonably believe
7that the filing may be fraudulent, unlawfully altered, or
8intended to unlawfully cloud or transfer the title of any real
9property. The recorder may enter into an intergovernmental
10agreement with local law enforcement officials for the purposes
11of this referral and review. A recorder may request that the
12Secretary of the Department of Financial and Professional
13Regulation assist in reviewing possible fraudulent filings.
14Upon request, the Secretary, or his or her designee, shall
15assist in identifying the validity of filings. The recorder
16shall notify the Secretary when a document suspected to be
17fraudulent is discovered.
18    In counties with a population of less than 3 million, a
19recorder shall provide public notice 90 days before the
20establishment of the fraud referral and review process. The
21notice shall include a statement of the recorder's intent to
22create a fraud referral and review process and shall be
23published in a newspaper of general circulation in the county
24and, if feasible, posted on the recorder's website and at the
25recorder's office or offices.
26    In determining whether to refer a document to an

 

 

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1administrative law judge for review, a recorder may take into
2consideration any of the following factors:
3        (1) whether the owner of the property or his or her
4    designated representative has reported to the recorder
5    that another individual is attempting or has attempted to
6    record a fraudulent deed or other instrument upon the
7    property;
8        (2) whether a law enforcement official has contacted
9    the recorder indicating that he or she has probable cause
10    to suspect title or recording fraud;
11        (3) whether the filer's name has a copyright attached
12    to it or the property owner's name has nonstandard
13    punctuation attached to it;
14        (4) whether the documents assert fines that do not
15    exist or have no basis under current law or that require
16    payment in gold or silver;
17        (5) whether the documents are maritime liens, or liens
18    under the Federal Maritime Lien Act or the Preferred Ship
19    Mortgage Act, or not authorized by the United States Coast
20    Guard;
21        (6) whether the documents are land patents not
22    authorized and certified by the United States Department of
23    the Interior Bureau of Land Management;
24        (7) whether the documents are representing that the
25    subject of the lien is releasing itself from a lien held by
26    another entity, with no apparent cooperation or

 

 

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

 

 

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

 

 

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1recorder shall also notify the parties set forth in subsection
2(e) of this Section. The recorder may, at his or her
3discretion, notify law enforcement officials regarding a
4filing determined to be fraudulent, unlawfully altered, or
5intended to unlawfully cloud or transfer the title of any real
6property.
7    (e) Notice. The recorder shall use county property tax
8records to identify and provide notice to the last owner of
9record by telephone, if available, and certified mail both
10when: (1) a deed or instrument has been referred for review and
11determination; and (2) a final determination has been made
12regarding the deed or instrument.
13    (f) Administrative decision. The recorder's decision to
14add a Notice of Referral and refer a document for review is a
15final administrative decision that is subject to review by the
16circuit court of the county where the real property is located
17under the Administrative Review Law. The standard of review by
18the circuit court shall be de novo.
19    (g) Referral and review process. The recorder shall bring a
20case to its county department of administrative hearings and,
21within 10 business days after receipt, an administrative law
22judge shall schedule a hearing to occur no later than 30 days
23after receiving the referral. Notice of the hearing shall be
24provided by the administrative law judge to the filer, or the
25party represented by the filer, of the suspected fraudulent
26document, the legal representative of the recorder of deeds who

 

 

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1referred the case, and the last owner of record, as identified
2in the referral.
3    If a preponderance of the evidence shows the document in
4question to be fraudulent, the administrative law judge shall
5rule the document to be fraudulent and forward the judgment to
6all the parties identified in this subsection. Upon receiving
7notice of the judgment of fraud, the recorder shall, within 5
8business days, record a new document that includes a copy of
9the judgment in front of the Notice of Referral that shall
10clearly state that the document in question has been found to
11be fraudulent and shall not be considered to affect the chain
12of title of the property in any way.
13    If the administrative law judge finds the document to be
14legitimate, the recorder shall, within 5 business days after
15receiving notice, record a copy of the judgment.
16    A decision by an administrative law judge shall not
17preclude a State's attorney or sheriff from proceeding with a
18criminal investigation or criminal charges. If a county does
19not have an administrative law judge that specializes in public
20records, one shall be appointed within 3 months after the
21effective date of this amendatory Act of the 98th General
22Assembly, or the original case shall be forwarded to the proper
23circuit court with jurisdiction.
24    (h) Fees. The recorder shall retain any filing fees
25associated with filing a deed or instrument that is determined
26to be fraudulent, unlawfully altered, or intended to unlawfully

 

 

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1cloud or transfer the title of any real property under this
2Section.
3    (i) Liability. Neither a recorder nor any of his or her
4employees or agents shall be subject to personal liability by
5reason of any error or omission in the performance of any duty
6under this Section, except in case of willful or wanton
7conduct. Neither the recorder nor any of his or her employees
8shall incur liability for the referral or review, or failure to
9refer or review, a document or instrument under this Section.
10    (j) Applicability. This Section applies only to filings
11provided to the recorder on and after the effective date of
12this amendatory Act of the 98th General Assembly.
13    (k) This Section is repealed June 1, 2018.
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.".