Another important change going into effect on June 1 is the law frequently referred to as Senate Bill 16 (Public Act 97-1164), which makes several important changes to the Illinois laws regarding mortgage foreclosures and abandoned properties.
The new law creates an expedited (“fast track”) mortgage foreclosure procedure for abandoned properties, imposes new filing fees for residential foreclosures (which expire at the end of 2017), and creates a “safe harbor” that allows lenders and servicers to enter, secure and maintain abandoned residential properties without exposure to liability for trespass or negligence.
The new law also amends Section 11 of the Illinois Conveyances Act to override last year's Crane vs. Gifford State Bank bankruptcy court decision by expressly providing that a mortgage does not need to state the loan's maturity date or interest rate.
ACTION ITEMS:
- Compliance officers should ensure that their bank's foreclosure counsel are aware of the new law's filing requirements. The amount of the new (and temporary) foreclosure filing fee (in addition to the current, permanent $50 filing fee) will depend on the number of foreclosures that your bank or your servicer (including all affiliates) filed on residential real estate located in Illinois during the previous year. The additional filing fee will be one of the following:
- $50
- if your bank is the mortgagee and your organization (including affiliates) filed no more than 49 residential foreclosures in Illinois in the previous year (even if a servicer is filing on your behalf, irrespective of the number of residential foreclosures filed in Illinois by the servicer in the previous year)
- if your bank is the servicer filing on behalf of another mortgagee, and your organization (including affiliates) filed no more than 49 residential foreclosures in Illinois in the past year (even if the mortgagee filed more than 49 residential foreclosures in Illinois in the previous year)
- $250
- if your bank is the mortgagee filing on your own behalf, or a nonbank servicer is filing on your behalf, and your organization (including affiliates) filed 50 to 174 residential foreclosures in Illinois in the previous year
- if your bank is the servicer filing on behalf of another mortgagee, and your organization (including affiliates) filed 50 or more residential foreclosures in Illinois in the previous year, and the mortgagee has filed 50 to 174 residential foreclosures in Illinois in the previous year
- if your bank is the servicer filing on behalf of another mortgagee, and your organization (including affiliates) filed 50 to 174 residential foreclosures in Illinois in the previous year, and the mortgagee has filed more than 174 residential foreclosures in Illinois in the previous year
- $500
- if your bank is the mortgagee filing on your own behalf, or a nonbank servicer is filing on your behalf, and your organization (including affiliates) filed 175 or more residential foreclosures in Illinois in the previous year
- if your bank is the servicer filing on behalf of another mortgagee, and your organization (including affiliates) filed 175 or more residential foreclosures in Illinois in the previous year, and the mortgagee filed 175 or more foreclosures in Illinois in the previous year
- A number of local governments in Illinois (including, but not limited to, Chicago, Cook County, Elgin, Evanston, Springfield and Waukegan) have enacted ordinances requiring mortgagees and servicers to maintain vacant properties before and during the foreclosure process (in other words, even before taking title to the vacant property). However, over the years, many mortgagees and servicers have been sued by property owners or unauthorized occupants when attempting to do so. As of June 1, Illinois law authorizes mortgagees and servicers to enter, secure and maintain abandoned residential properties without liability for civil or criminal trespass or negligence. This will help many banks that choose to maintain vacant residential properties before and/or during the foreclosure process.