Public Act 98-0020 (IL)

Public Act 98-0020 (SB 1674); Effective Date: 6/1/2013

 

Foreclosure Fees

 

Statutes Amended: 20 ILCS 3805/7.30 and 7.31; 30 ILCS 105/5.826 (new); 735 ILCS 5/15-1504.1, 1505.8, and 1507.1

 

 

Since October 1, 2010, the Foreclosure Prevention Program and the Abandoned Residential Property Municipality Relief Program, both of which are funded by lenders’ filing fees, have assisted HUD-approved agencies in providing housing counseling and foreclosure outreach activities as well as local governments in the securing and maintenance of abandoned residential properties.

 

Effective June 1, 2013, several amendments have been made to the operation of the two programs. Among other things, the Foreclosure Prevention Program Graduated Fund was created as a special fund in the State Treasury, 30 ILCS 105/5.826, and partly replaced the Foreclosure Prevention Program Fund. In addition, a time extension to the expedited foreclosure process for abandoned residential property has taken effect. 735 ILCS 5/15-1505.8(c), (d). The extension, made to the timing of a hearing by the court on a motion to expedite judgment and sale procedure for abandoned residential property, requires the court to hear the motion within 21 days after the filing. Some of the details are as follows.

 

Creation of the Foreclosure Prevention Program Graduated Fund

 

Effective June 1, 2013, lenders are required to pay additional fees for filing residential mortgage foreclosure actions. 735 ILCS 5/15-1504.01(a-5) (The requirement will become inoperative on Jan. 1, 2018). Depending on the number of foreclosure complaints the lender and its affiliates filed in the preceding year, the additional fees vary: $500 per foreclosure if the number exceeds 175; $250 per foreclosure if the number is between 50 and 175; and $50 if the number is fewer than 50. Effective June 1, 2013, these additional fees are paid to the Foreclosure Prevention Program Graduated Fund. Id.

 

To prevent the lender and its affiliates from overcharging mortgagors for the additional fees, the new law requires the lender and its affiliates to file a true and correct statement as to which additional fees they are required to pay under the statute. 735 ILCS 5/15-1504.1(a-5)(4). If they fail to do so, and the mortgagor reimburses the lender for erroneous amounts, the mortgagor can get a refund by filing a petition to the judge within the foreclosure action. The amendment makes clear that the refund is the sole remedy for the mortgagor, and no other private right of action is allowed.

 

Funds in the Foreclosure Prevention Program Graduated Fund are disbursed to HUD-approved agencies in various geographic areas. Under the new law, the disbursements are made after deducting administrative expenses, which cannot exceed 4% of the annual appropriated amount. 20 ILCS 3805/7.30(b-1). Also, the clerk of the court retains 2% of the payments made by lenders for deposit into the Circuit Court Clerk Operation and Administrative Fund. 735 ILCS 5/15-1504.1(a-5)(2)(C). If an approved agency belongs to multiple geographic areas, the Illinois Housing Development Authority may elect to fund the applicant from one of the geographic areas. 20 ILCS 3805/7.30(c-5).

 

 

New Funds Available for the Abandoned Residential Property Municipality Relief Program

         

Until January 1, 2016, purchasers in the foreclosure are required to pay judicial sales fees for deposit into the Abandoned Residential Property Municipality Relief Fund. 735 ILCS 5/15-1507.1. The new law includes such fees into the program and makes them available for granting to municipalities and counties. 20 ILCS 3805/7.31(b). In addition, 2% of the fee is to be retained by the clerk of the court for deposit into the Circuit Court Clerk Operation and Administration Fund. 735 ILCS 5/15-1507.1(b).

 

Under the new law, grants made to municipalities and countries other than Cook, DuPage, Kane, Lake, McHenry, and Will Counties should be distributed to areas of “greatest need,” but the proportion of the fees paid to the respective clerks of the courts are also taken into account. 20 ILCS 3805/7.31(b). Administrative expenses, capped at 4% of the annual appropriate amount, are deducted before granting the funds to local governments. If a municipality belongs to multiple geographic areas, the Authority may elect to fund the municipality from one of the geographic areas. 20 ILCS 3805/7.31(c).

 

Bill Number: 
SB 1674
Public Act or Public Law Number: 
PA 09-0020
By: ATG Underwriting Department | Posted on: Thu, 12/05/2013 - 11:32am