Bulletin: IL2009001

Date:
January 19, 2009
To:
All Illinois Issuing Offices
RE:
2008 Illinois Legislative Update

Dear Associates:

General Comments: The legislature sent less than 300 bills, out of more than 3,000, to the Governor for consideration this year. The unusually low number of bills passed this session was attributable both to the volatile political environment and to the fact that the Speaker's office added amendatory language to countless bills that effectively would have stripped the Governor of his direct rule-making authority, prompting the Senate to refuse to call those amended bills. As a result, many important measures were stalled in the Senate, and as a result of that, many other measures were stalled in the House.

  1. Notice of Homeowners' Rights After Judicial Sale
    Public Act 95-826, Effective August 14, 2008

Summary: Requires a mortgagee to send a notice by first class mail to the mortgagor of residential real estate that informs the mortgagor of his or her right to remain in the property for 30 days after an order of possession is entered following a judicial sale. The notice must be sent to the address of the mortgagor if the mortgagor has filed an appearance in the foreclosure action. If no appearance has been filed, the notice must be sent to the common address of the foreclosed property. The language of the notice is set forth in the law.

Section 15-1701 of the Illinois Mortgage Foreclosure Law (Article XV of the Code of Civil Procedure, 735 ILCS 5/15-1101 et seq.) contains an elaborate set of rules and procedures regarding a mortgagor's right to possession during a foreclosure action, particularly with regard to the rights of occupants of foreclosed residential property after a judicial sale. See the next item, as well as the discussion in 5 below, both concerning renters.

  1.  
    1. Protections for Renters of Foreclosed Residential Properties
      Public Act 95-933, Effective August 26, 2008


      Summary: Amends Section 15-1701(h)(4) of the Illinois Mortgage Foreclosure Law to strengthen the rights of tenants in the event of foreclosure.

      Section 15-1701(h)(4) already had provided that tenants who are current on their rent must be allowed to retain possession of the property covered in their rental agreement for 120 days following a notice for a hearing in a Supplemental Petition for Possession. The new language expands the "current on rent" pre-condition to also include "or where timely written notice of to whom and where the rent is to be paid has not been provided to the tenant, or where the tenant has made good faith efforts to make rental payments in order to keep current . . ."

      Section 15-1701(h)(4) only applies if the tenant continues "to pay his or her rent in full during the 120-day period or has made good faith efforts to pay the rent in full during the period."

      The amendment also prohibits the filing of a forcible entry and detainer action against a tenant when no Supplemental Petition for Possession has been filed pursuant to Section 15-1701(h) or relating to a forcible entry and detainer action brought against a tenant "who would have lawful possession of the premises but for the foreclosure of a mortgage on the property." The law now prohibits disclosures of these records to any person other than a law enforcement officer or any other representative of a governmental entity, unless otherwise ordered by the court.
  2. Residential Mortgage Lending Consumer Protections
    Public Act 95-961, Effective September 23, 2008


    Summary: Substantially strengthens the Illinois Attorney General's ability to prosecute discriminatory conduct in residential real estate transactions by amending the Illinois Fairness in Lending Act and the Illinois Human Rights Act, as follows:

    a. Illinois Fairness in Lending Act

    Amends Section 3 of the Act, 815 ILCS 120/3 to add that it is a prohibited activity to:

    "Deny or vary the terms of a loan on the basis of the borrower's race, gender, disability, or national origin."

    b. Illinois Human Rights Act

    Amends Section 10-104 of the Act to significantly increase the civil money penalties the Illinois Attorney General may demand from a court for violations of Articles 3 and 4 of the Act (775 ILCS 5/3-101 et seq. 775 ILCS 5/4-101 et seq.) to:

    (1) "an amount not exceeding $25,000 per violation ... if the defendant has not been adjudged to have committed any prior civil rights violations under the provision of the Act that is the basis of the complaint"

    (2) "an amount not exceeding $50,000 per violation . . . if the defendant has been adjudged to have committed one other civil rights violations under the provisions of the Act within 5 years of the occurrence of the civil rights violation that is the basis of the complaint"

(3) "an amount not exceeding $75,000 per violation . . . if the defendant has been adjudged to have committed two or more other civil rights violations under the provisions of the Act within 5 years of the occurrence of the civil rights violation that is the basis of the complaint"

Article 3 provides that it is a violation of a person's civil rights to engage in "unlawful" discrimination involving real estate transactions based on the fact that a person is a member of a protected class. For purposes of Article 3, "unlawful" means:

  • Refusing to engage in a real estate transaction with that person;
  • Altering the terms of a real estate transaction;
  • Refusing to receive or give a bona fide offer;
  • Refusing to negotiate;
  • Representing that property is not available for inspection or sale when it is;
  • Publishing a statement, advertisement, or application which indicates "any limitation" based on unlawful discrimination;
  • Offering or using real estate listings knowing that unlawful discrimination is intended.

    Article 4 provides that it is a violation of a person's civil rights for a financial institution to engage in "unlawful" discrimination based on the fact that a person is a member of a protected class. For purposes of Article 4, "unlawful" means:
  • Denying services;
  • Modifying services;
  • Denying or varying the terms of a loan;
  • Denying or varying the terms of the loan based on the location of property that will secure the loan;
  • Denying or varying the terms of a loan without considering the income that would be relied on for its repayment;
  • Utilizing lending standards that have no economic basis.
  1. Cook County Residential Real Estate Conveyance "Thumbprint Pilot Project"
    Public Act 95-988, Effective June 1, 2009

    Summary: Establishes a three-year pilot program in Cook County for requiring the "notarial record" of a real estate conveyance that "purports to transfer title to real property located in Cook County" to include the thumbprint or another fingerprint of the parties to the conveyance. Amends the Illinois Notary Public Act (5 ILCS 312/3-101 et seq.)

    The "notarial record" will be a new document for residential real estate closings. A notarial record must contain the following information:
    (1) The date of the notarial act.
    (2) The type, title or description of the document of conveyance being notarized, and the property index number (PIN) used to identify the Residential Real Property for assessment or taxation purposes and the common street address for the Residential Real Property that is the subject of the Document of Conveyance.
    (3) The signature, printed name, and residence street address of each person whose signature is the subject of the notarial act and a certification by the person which states: "The undersigned grantor hereby certifies that the real property identified in this Notarial Record is Residential Real Property as defined in the Illinois Notary Public Act."
    (4) A description of the satisfactory evidence reviewed by the notary to determine the identity of the person whose signature is the subject of the notarial act. Identifying documents must be a document issued by a state or federal agency bearing the photographic image of the individual's face and the signature of the individual.
    (5) The date of notarization, the fee charged for the notarial act, the Notary's home or business phone number, the Notary's residence street address, the Notary's commission expiration date, the correct legal name of the Notary's employer or principal, and the business street address of the Notary's employer or principal.
    (6) The right thumbprint of the persons signing the Document of Conveyance (including an agent acting on behalf of a principal under a duly executed power of attorney. If the right thumbprint is not available, then the left thumb, or any available finger (which must be indicated on the Notarial Record.) If a party signing the Document of Conveyance is physically unable to provide a thumbprint or fingerprint, the notary must indicate that on the Notarial Record and provide an explanation of the physical condition.

The actual form to be used for the Notarial Record is set forth in the law in Section 3-102(f).

If the notary involved in taking the fingerprint is an employee or an agent of a title insurance company, title insurance agent, financial institution, or attorney, then the original Notarial Record must be delivered to the notary's employer within 14 days after the notarial act. The employer is then required to retain the Notarial Record in its business records for 7 years.

If the notary is not employed by or as an agent for any of the above, then the notary must deliver the original notarial record to the Cook County Recorder of Deeds, accompanied by a $5 filing fee. Notaries are prohibited from retaining copies of the original notarial record.

The notarial record may not be disclosed by an person except in response to a subpoena, and it is not subject to disclosure under the Freedom of Information Act.

The following are exceptions to the law that will not require a fingerprint:

(1) court-ordered and court-authorized conveyances of Residential Real Property, including without limitation, quit claim deeds executed pursuant to a marital settlement agreement incorporated into a judgment of dissolution of marriage, and transfers in the administration of a probate estate;
(2) judicial sale deeds relating to Residential Real Property, including without limitation, sale deeds issued pursuant to proceedings to foreclose a mortgage or execute on a levy to enforce a judgment;
(3) deeds transferring ownership of Residential Real Property to a trust where the beneficiary is also the grantor;
(4) deeds from grantors to themselves that are intended to change the nature or type of tenancy by which they own Residential Real Property;
(5) deeds from a grantor to the grantor and another natural person that are intended to establish a tenancy by which the grantor and the other natural person own Residential Real Property;
(6) deeds executed to the mortgagee in lieu of foreclosure of a mortgage; and
(7) deeds transferring ownership to a revocable or irrevocable grantor trust where the beneficiary includes the grantor.

The new law authorizes a maximum fee of up to $25 for a notarial action performed pursuant to these new requirements (otherwise the Illinois Notary Public Act limits notarial fees to $1 for any notarial act). This fee sunsets, along with the pilot program, on July 1, 2013.

  1. Residential Mortgage Foreclosure Consumer Protections
    Public Act 95-961, Effective January 1, 2009


    Summary: Amends the Mortgage Foreclosure Act in the Code of Civil Procedure. Essentially the amendments: (1) require a statutory notice to be attached to the summons served with a complaint in a foreclosure action, (2) require a mortgagee or the mortgagee's agent to provide an accurate "payoff demand statement" within 10 business days after receipt of a request in a foreclosure action, and (3) provide for reasonable attorneys fees and court costs to a defendant who prevails in a motion, affirmative defense or counterclaim, or in the foreclosure action itself.

    The new language is as follows:

    Sec. 15-1504.5 Homeowner notice to be attached to summons. For all residential foreclosure actions filed, the plaintiff must attach a Homeowner Notice to the summons. The Homeowner Notice must be in at least 12 point type and in English and Spanish. The Spanish translation shall be prepared by the Attorney General and posted on the Attorney General's website. A notice that includes the Attorney General's Spanish translation in substantially similar form shall be deemed to comply with the Spanish notice requirement in this Section. . . .
  1. Municipal Action on Abandoned Property
    Public Act 95-931, Effective January 1, 2009


    Summary: Amends Section 11-31-1 of the Illinois Municipal Code, 65 ILCS 5/11-31-1, to enhance the ability of municipalities to obtain a court order declaring that a building is abandoned and should be demolished or repaired if it is in a dangerous or unsafe condition. The law also authorizes a court to appoint a receiver on behalf of the municipality that would have the authority to repair dangerous or unsafe conditions in abandoned buildings. The cost of the demolition or repair, including court costs and attorney's fees, are recoverable from the owner and become a lien on the property superior to all prior existing liens except for taxes.
  1. Uniform Environmental Covenants Act
    Public Act 95-845, Effective January 1, 2009


    Summary: This Act creates an interest in real estate called an "environmental covenant" that assures a plan of remediation for contaminated real property ("Brownfields") and imposes activity and use restrictions on such property.
  1. Personal Information on County Recorder Websites
    Public Act 95-875, Effective January 1, 2009


    Summary: Prohibits any person or entity from including an individual's social security number in a document that is prepared and presented for recording with a county recorder.

    There are exceptions for: (i) state or federal tax liens, certified copies of death certificates, or other documents required by law to contain personal identifying information, and (ii) documents that were executed by an individual prior to January 1, 2009.

    Also provides that, upon the request by any person, a county recorder must redact or remove that person's social security number, employer taxpayer identification number, driver's license number, State identification number, passport number, checking account number, savings account number, credit card number, debit card number or personal identification (PIN) code from any internet website maintained by the recorder or used by the recorder to display public records. The request must be made in writing and delivered by mail, facsimile, electronic transmission, or in person to the office of the recorder. The request must specify the personal information to be redacted and identify the document that contains the personal information.

    Requires county recorders to submit a written policy to their county boards by December 31, 2009 that includes a timeline providing for the redaction of social security numbers from all records publicly displayed on the website.
  1. Real Estate Escrow Funds Treated as Unclaimed Property
    Public Act 95-851, Effective January 1, 2009


    Summary: Amends the Real Estate License Act to provide that moneys escrowed prior to the consummation or termination of a real estate transaction are deemed to be abandoned and must be transferred to the State Treasurer under the Uniform Disposition of Unclaimed Property Act when a dispute arises between the buyer and seller and six months have elapsed with no distribution of the funds.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None