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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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: (Passed) 2019-08-16 - Public Act . . . . . . . . . 101-0396 [SB0138 Detail]

Download: Illinois-2019-SB0138-Enrolled.html

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SB0138 Enrolled LRB101 05495 LNS 50509 b
AN ACT concerning civil law.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Code of Civil Procedure is amended by
changing Section 15-1401.1 as follows:
(735 ILCS 5/15-1401.1)
Sec. 15-1401.1. Short sale in foreclosure.
(a) As used in For purposes of this Section: ,
"Certified community development financial institution"
means a community development financial institution that is
certified by the Community Development Financial Institutions
Fund in the U.S. Department of Treasury under 12 U.S.C. 4701 et
seq.
"Short short sale" means the sale of real estate that is
subject to a mortgage for an amount that is less than the
amount owed to the mortgagee on the outstanding mortgage note.
"Residential property" means real property on which there
is a dwelling unit with accommodations for 4 or fewer separate
households and occupied, or to be occupied, in whole or in
part, by the mortgagor; however:
(i) "residential property" is limited to the primary
residence of a person;
(ii) "residential property" does not include an

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investment property or residence other than a primary
residence; and
(iii) "residential property" does not include
residential property taken in whole or in part as
collateral for a commercial loan.
(b) In a foreclosure of residential real estate, if (i) the
mortgagor presents to the mortgagee a bona fide written offer
from a third party to purchase the property that is the subject
of the foreclosure proceeding, (ii) the written offer to
purchase is for an amount which constitutes a short sale of the
property, and (iii) the mortgagor makes a written request to
the mortgagee to approve the sale on the terms of the offer to
purchase, the mortgagee must respond to the mortgagor within 90
days after receipt of the written offer and written request.
(c) The mortgagee shall determine whether to accept the
mortgagor's short sale offer. Failure to accept the offer shall
not impair or abrogate in any way the rights of the mortgagee
or affect the status of the foreclosure proceedings. The 90-day
period shall not operate as a stay of the proceedings.
(d) 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

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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. At the time
of the offer, the following disclosures shall be made to the
mortgagee by the mortgagor in connection with any purchase or
sale under this subsection: (i) the entity seeking to purchase
shall disclose its tax-exempt status; (ii) the entity that will
finance the sale following the purchase shall disclose its
status as a certified community development financial
institution; and (iii) the disclosure shall state whether the
residential property is to be sold back to the mortgagor. Upon
request by the mortgagee, a certified community development
financial institution shall provide documentation evidencing
its current certification status. Nothing in this subsection
shall impair, abrogate, or abridge in any manner the rights of
the mortgagee pursuant to subsection (c) to accept or reject an
offer to purchase either a mortgage or residential property,
nor shall it give rise to a cause of action.
(Source: P.A. 97-666, eff. 1-13-12.)
Section 99. Effective date. This Act takes effect upon
becoming law.