Sen. Ira I. Silverstein

Filed: 5/17/2013

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 2832

2    AMENDMENT NO. ______. Amend House Bill 2832, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Counties Code is amended by adding Section
63-5010.5 as follows:
 
7    (55 ILCS 5/3-5010.5 new)
8    Sec. 3-5010.5. Fraud referral and review.
9    (a) Legislative findings. The General Assembly finds that
10property fraud, including fraudulent filings intended to cloud
11or fraudulently transfer title to property by recording false
12or altered documents and deeds, is a rapidly growing problem
13throughout the State. In order to combat the increase in the
14number of these filings, a recorder may establish a process to
15review and refer documents suspected to be fraudulent.
16    (b) Definitions. The terms "recording" and "filing" are

 

 

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

 

 

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

 

 

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1    another entity, with no apparent cooperation or
2    authorization provided by the lienholder;
3        (8) whether the documents are protesting or disputing a
4    foreclosure proceeding that are not filed within the
5    foreclosure suit and with the court presiding over the
6    matter;
7        (9) whether the documents are Uniform Commercial Code
8    filings referencing birth certificates or other private
9    records that are not in compliance with Section 9-501 of
10    the Uniform Commercial Code;
11        (10) whether the documents are re-recording deeds to
12    re-notarize or attach notary certification if prior
13    notarization already appears unaltered on the document of
14    record;
15        (11) whether the documents are asserting diplomatic
16    credentials or immunity, non-United States citizenship, or
17    independence from the laws of the United States;
18        (12) whether the documents are claims that a bank
19    cannot hold title after a foreclosure;
20        (13) whether the documents are deeds not properly
21    signed by the last legal owner of record or his or her
22    court appointed representative or attorney-in-fact under a
23    power of attorney;
24        (14) whether the documents are manipulated or altered
25    federal or State legal or court forms that release a lien;
26        (15) whether a document is not related to a valid

 

 

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

 

 

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1index or the grantee's index identifying the document,
2corresponding document number in question, and the date of
3referral. The recorder shall also notify the parties set forth
4in subsection (e) of this Section. The recorder may, at his or
5her discretion, notify law enforcement officials regarding a
6filing determined to be fraudulent, unlawfully altered, or
7intended to unlawfully cloud or transfer the title of any real
8property.
9    (e) Notice. The recorder shall use county property tax
10records to identify and provide notice to the last owner of
11record by telephone, if available, and certified mail both
12when: (1) a deed or instrument has been referred for review and
13determination; and (2) a final determination has been made
14regarding the deed or instrument. Notice, by mail, shall also
15be sent to the physical address of the property associated with
16the deed or instrument.
17    (f) Administrative decision. The recorder's decision to
18add a Notice of Referral and refer a document for review is a
19final administrative decision that is subject to review by the
20circuit court of the county where the real property is located
21under the Administrative Review Law. The standard of review by
22the circuit court shall be de novo.
23    (g) Referral and review process. Prior to referral, the
24recorder shall notify the last owner of record of the document
25or documents suspected to be fraudulent. The person, entity, or
26legal representative thereof shall confirm in writing his or

 

 

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1her belief that a document or documents are suspected to be
2fraudulent and may request that the recorder refer the case for
3review. Upon request, the recorder shall bring a case to its
4county department of administrative hearings and, within 10
5business days after receipt, an administrative law judge shall
6schedule a hearing to occur no later than 30 days after
7receiving the referral. The referral and case shall clearly
8identify the person, persons, or entity believed to be the last
9true owner of record as the petitioner. Notice of the hearing
10shall be provided by the administrative law judge to the filer,
11or the party represented by the filer, of the suspected
12fraudulent document, the legal representative of the recorder
13of deeds who referred the case, and the last owner of record,
14as identified in the referral.
15    If clear and convincing evidence shows the document in
16question to be fraudulent, the administrative law judge shall
17rule the document to be fraudulent and forward the judgment to
18all the parties identified in this subsection. Upon receiving
19notice of the judgment of fraud, the recorder shall, within 5
20business days, record a new document that includes a copy of
21the judgment in front of the Notice of Referral that shall
22clearly state that the document in question has been found to
23be fraudulent and shall not be considered to affect the chain
24of title of the property in any way.
25    If the administrative law judge finds the document to be
26legitimate, the recorder shall, within 5 business days after

 

 

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1receiving notice, record a copy of the judgment.
2    A decision by an administrative law judge shall not
3preclude a State's attorney or sheriff from proceeding with a
4criminal investigation or criminal charges. If a county does
5not have an administrative law judge that specializes in public
6records, one shall be appointed within 3 months after the
7effective date of this amendatory Act of the 98th General
8Assembly, or the original case shall be forwarded to the proper
9circuit court with jurisdiction.
10    Nothing in this Section precludes a private right of action
11by any party with an interest in the property affected by the
12review and referral, or the filer of the document or documents
13suspected to be fraudulent. Nothing in this Section requires a
14person or entity who may have had a fraudulent document or
15encumbrance filed against his or her property to use the fraud
16review and referral process or administrative review created by
17this Section.
18    (h) Fees. The recorder shall retain any filing fees
19associated with filing a deed or instrument that is determined
20to be fraudulent, unlawfully altered, or intended to unlawfully
21cloud or transfer the title of any real property under this
22Section.
23    (i) Liability. Neither a recorder nor any of his or her
24employees or agents shall be subject to personal liability by
25reason of any error or omission in the performance of any duty
26under this Section, except in case of willful or wanton

 

 

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1conduct. Neither the recorder nor any of his or her employees
2shall incur liability for the referral or review, or failure to
3refer or review, a document or instrument under this Section.
4    (j) Applicability. This Section applies only to filings
5provided to the recorder on and after the effective date of
6this amendatory Act of the 98th General Assembly.
7    (k) This Section is repealed June 1, 2018.
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.".