Bill Text: IL SB0138 | 2019-2020 | 101st General Assembly | Enrolled


Bill Title: Amends the Mortgage Foreclosure Article of the Code of Civil Procedure in relation to short sales of property. Provides that, if an offer to purchase either a mortgage or residential property is made by an entity with a tax-exempt filing status under Section 501(c)(3) of the Internal Revenue Code for the purpose of reselling that mortgage or residential property to the mortgagor, and financing for the repurchase will be provided by a certified community development financial institution, an affidavit, statement, agreement, or addendum limiting ownership or occupancy of the residential property by the mortgagor shall not provide a basis to avoid a sale or transfer, nor is it enforceable against the acquiring entity or any real estate broker, mortgagor, or settlement agent named in the affidavit, statement, agreement, or addendum. Provides that, at the time of an offer, specified disclosures shall be made to the mortgagee in connection with any purchase of a sale. Provides that, upon request by the mortgagee, a certified community development financial institution shall provide documentation evidencing its current certification status. Effective immediately.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Enrolled) 2019-06-25 - Sent to the Governor [SB0138 Detail]

Download: Illinois-2019-SB0138-Enrolled.html



SB0138 EnrolledLRB101 05495 LNS 50509 b
1 AN ACT concerning civil law.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Code of Civil Procedure is amended by
5changing Section 15-1401.1 as follows:
6 (735 ILCS 5/15-1401.1)
7 Sec. 15-1401.1. Short sale in foreclosure.
8 (a) As used in For purposes of this Section: ,
9 "Certified community development financial institution"
10means a community development financial institution that is
11certified by the Community Development Financial Institutions
12Fund in the U.S. Department of Treasury under 12 U.S.C. 4701 et
13seq.
14 "Short short sale" means the sale of real estate that is
15subject to a mortgage for an amount that is less than the
16amount owed to the mortgagee on the outstanding mortgage note.
17 "Residential property" means real property on which there
18is a dwelling unit with accommodations for 4 or fewer separate
19households and occupied, or to be occupied, in whole or in
20part, by the mortgagor; however:
21 (i) "residential property" is limited to the primary
22 residence of a person;
23 (ii) "residential property" does not include an

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1 investment property or residence other than a primary
2 residence; and
3 (iii) "residential property" does not include
4 residential property taken in whole or in part as
5 collateral for a commercial loan.
6 (b) In a foreclosure of residential real estate, if (i) the
7mortgagor presents to the mortgagee a bona fide written offer
8from a third party to purchase the property that is the subject
9of the foreclosure proceeding, (ii) the written offer to
10purchase is for an amount which constitutes a short sale of the
11property, and (iii) the mortgagor makes a written request to
12the mortgagee to approve the sale on the terms of the offer to
13purchase, the mortgagee must respond to the mortgagor within 90
14days after receipt of the written offer and written request.
15 (c) The mortgagee shall determine whether to accept the
16mortgagor's short sale offer. Failure to accept the offer shall
17not impair or abrogate in any way the rights of the mortgagee
18or affect the status of the foreclosure proceedings. The 90-day
19period shall not operate as a stay of the proceedings.
20 (d) If an offer to purchase either a mortgage or
21residential property is made by an entity with a tax-exempt
22filing status under Section 501(c)(3) of the Internal Revenue
23Code for the purpose of reselling that mortgage or residential
24property to the mortgagor, and financing for the repurchase
25will be provided by a certified community development financial
26institution, an affidavit, statement, agreement, or addendum

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1limiting ownership or occupancy of the residential property by
2the mortgagor shall not provide a basis to avoid a sale or
3transfer, nor is it enforceable against the acquiring entity or
4any real estate broker, mortgagor, or settlement agent named in
5the affidavit, statement, agreement, or addendum. At the time
6of the offer, the following disclosures shall be made to the
7mortgagee by the mortgagor in connection with any purchase or
8sale under this subsection: (i) the entity seeking to purchase
9shall disclose its tax-exempt status; (ii) the entity that will
10finance the sale following the purchase shall disclose its
11status as a certified community development financial
12institution; and (iii) the disclosure shall state whether the
13residential property is to be sold back to the mortgagor. Upon
14request by the mortgagee, a certified community development
15financial institution shall provide documentation evidencing
16its current certification status. Nothing in this subsection
17shall impair, abrogate, or abridge in any manner the rights of
18the mortgagee pursuant to subsection (c) to accept or reject an
19offer to purchase either a mortgage or residential property,
20nor shall it give rise to a cause of action.
21(Source: P.A. 97-666, eff. 1-13-12.)
22 Section 99. Effective date. This Act takes effect upon
23becoming law.
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