Under federal law, your bank must provide the HUD housing counseling and SCRA counseling notices within 45 days after an eligible borrower becomes delinquent. Additionally, if your bank does not qualify as a “small servicer” (an institution that, together with its affiliates, services 5,000 or fewer mortgage loans as of January 1st of the current year, provided that the institution or an affiliate owns or originated all of the mortgage loans being serviced), you must provide a written early intervention notice to borrowers within 45 days of their delinquency.
Currently, Illinois law does not require any past-due notices for delinquent mortgage borrowers. The “grace period” notice requirement in the Code of Civil Procedure was automatically repealed as of July 1, 2016, and the requirement has not been reinstated.
There may be additional delinquency notice requirements in your loan agreement or imposed by a secondary market purchaser, if applicable.
For resources related to our guidance, please see:
- Housing and Urban Development Act of 1968, 12 USC 1701x(c)(5)(A) (“Except as provided in subparagraph (C), the creditor of a loan (or proposed creditor) shall provide notice under clause (ii) to (I) any eligible homeowner who fails to pay any amount by the date the amount is due under a home loan . . . .”)
- Housing and Urban Development Act of 1968, 12 USC 1701x(c)(5)(B) (“The notification required in subparagraph (A) shall be made . . . (ii) before the expiration of the 45-day period beginning on the date on which the failure referred to in such subparagraph occurs.”)
- Regulation X, 12 CFR 1024.39(b)(1) (“Except as otherwise provided in this section, a servicer shall provide to a delinquent borrower a written notice with the information set forth in paragraph (b)(2) of this section no later than the 45th day of the borrower’s delinquency and again no later than 45 days after each payment due date so long as the borrower remains delinquent.”)
- Regulation X, 12 CFR 1024.30(b)(1) (“Exemptions. Except as otherwise provided in § 1024.41(j), §§ 1024.38 through 1024.41 of this subpart [including the notice requirements in § 1024.39 copied above] shall not apply to the following: (1) A servicer that qualifies as a small servicer pursuant to 12 CFR 1026.41(e)(4); . . .”)
- Regulation Z, 12 CFR 1026.41(e)(4) (“A small servicer is a servicer that: (A) Services, together with any affiliates, 5,000 or fewer mortgage loans, for all of which the servicer (or an affiliate) is the creditor or assignee. . . .”)
- Code of Civil Procedure, 735 ILCS 5/15-1502.5 (Illinois grace period notice requirement, with a sunset date of July 1, 2016.)