New Helpful Legislation – More Details on New Foreclosure Law

April 9, 2009

Finance

The new bill strives to give those in trouble a chance to recover.

The new bill strives to give those in trouble a chance to recover.

It’s good to hear that the government wheels are turning & finally churning out legislation to help those that they were elected to serve. On Sunday, April 5th, the Illinois State Senate passed and Governor Pat Quinn signed into law, as The Chicago 77 reported on Monday, Senate Bill 2513.

As stated on Illinois Realtor┬«, this new law adds an entirely new section to the Code of Civil Procedure regarding procedures and forbearance for delinquent residential mortgages. It states that if a mortgage secured for residential real estate (a.k.a your home, personal residence, condo, 2-flat, town home, bachelor pad, flat, stomping pad, domicile, homestead, asylum, hideout, mansion, dwelling, safe haven, home base, “my place”….ok, you get the picture.) If your residence, whatever you choose to call it, becomes delinquent by more than 30 days, the mortgagee must mail a notice (a.k.a letter) advising the homeowner that he/she may wish to seek approved housing counseling (a.k.a help). Of course, this help must come from a HUD approved counseling agency, as defined in the legislation.

30 Days + 30 Days + 30 Days

Foreclosure action cannot begin before mailing this notice, which is, of course, spelled out in the legislation. If, within the 30-day period an approved counseling agency provides written notice to the mortgagee that the homeowner is seeking approved counseling services (a.k.a help), then no legal action can be instituted for 30 days after the date of that notice.

During the 30-day period the homeowner or counselor or both may prepare and proffer (FYI – The act of proffering involves making an offer prior to any formal negotiations…yes, I had to Google proffer to better understand the legislation) to the mortgagee a proposed sustainable loan workout plan (of course, as defined in the legislation). The mortgagee determines whether to accept the proposed sustainable loan workout plan. If the parties agree to the plan, then no legal action will be instituted for as long as the sustainable loan workout plan is complied with by the homeowner.

The Law Is on the Books for Two Years

If IDFPR (Illinois Department of Financial and Professional Regulation) determines that the demand for counseling services in an area exceeds the number of available approved counseling agencies, the Secretary can certify other persons or entities as approved counseling agencies. These provisions will be repealed in two years and apply only to residential real estate that is the homeowner?s principal residence.

Residential Real Estate Only

It is important to point out, that this legislation does not provide assistance to investment, commercial, retail or development property owners. It is intended solely for a homeowner’s primary residence (as we defined earlier, your home, personal residence, condo, 2-flat, townhome, bachelor pad…ok, ok, ok, you get it).
On a positive economic note, it’s being reported by top economists that the economic recovery has begun! To take a snippet of news from Realtor.org, Joseph Carson, chief economist at AllianceBernstein, calls improving home sales, a rising stock market, and better-than-expected retail sales in February and March good signs of a turnaround. By the time President Obama?s stimulus package takes effect, the economy will be ready, he says. Understandably, we can pick and choose what we want to hear. For me, I choose to stay on the positive side, glass is half full mentality. It goes a long way to maintaining a healthy mind and life.

So what do you think? Is this bill a good enough measure to help those in need? What else do you think government should be doing?

We would like to thank A God’s Child for kindly sharing today’s photo via the Creative Commons License.

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About Lisa Gregg

Lisa has been in real estate since 2005. Her strengths and expertise are in contract management, marketing, and coordinating. She supports the Robert John Anderson Group at Baird & Warner, maintaining a long tradition of being in the top 1% of Chicago Realtors®. Lisa loves spending time with her husband and two growing boys (who she can't call little anymore), being outdoors, spending time with friends?new and old?all while doing her part for the environment. Lisa can be reached via email lisa@robertjohnanderson.com or on facebook.

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2 Responses to “New Helpful Legislation – More Details on New Foreclosure Law”

  1. Marilyn D Pulliam Says:

    So many families are hurting financially right now. It is a step in the right direction to know that the homeowner can take steps to buy time in order to save the family home.

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