NAPERVILLE, Ill. (2/13/13)--Illinois Gov. Pat Quinn Friday signed into law the Illinois Credit Union League-backed Senate Bill 16, a measure that establishes a "fast track" expedited foreclosure process to help address the issue of abandoned residential properties in the state.
| Surrounded by representatives of the Illinois Credit Union League, state lawmakers, housing advocates, county officials and other community stakeholders, Illinois Gov. Pat Quinn Friday signed into law a league-backed landmark "fast-track" expedited foreclosure process to address the issue of abandoned residential properties in Illinois. The league played a key role in advancing the legislation. (Photo provided by the Illinois Credit Union League)|
The league, after two years of negotiations, played a key role in advancing the measure. SB 16 cleared both chambers during the second week of the "veto" session of the Illinois General Assembly (IGA). It passed the House on Dec. 4 by 87 to 17 and the Senate on Dec. 5, 47-0.
"Throughout the two-year process, the excellent reputation and respect credit unions have earned with legislators were very apparent," said Stephen R. Olson, ICUL executive vice president and general counsel. "The active participation and support of Illinois credit unions played a key part in helping to pass this critical measure," he added.
"This law will help restore neighborhoods and property values while fighting crime and blight by decreasing the time a home sits empty and getting it back on the market quickly," Quinn said when he signed what is now Public Act 97-1164.. "It also allows us to make major investments to keep families in their homes by preventing foreclosures in the first place."
The new law:
- Establishes a "fast-track" expedited foreclosure process. The league worked with sponsors to fine-tune the mortgage foreclosure process to make it more efficient and expedient and to avoid provisions that penalize lenders, and ultimately borrowers, through increased fines and penalties. Lenders can shorten the process for abandoned properties by about 18 months, obtaining the title to the properties and assuming responsibility to maintain and secure the properties more quickly. That means the properties are in better condition and more saleable when the lender obtains the title.
- Provides funding for remediation of abandoned property and pre-foreclosure counseling. The law includes an additional residential foreclosure filing fee to support local governments and struggling homeowners. Institutions that filed 175 or more foreclosures during the preceding calendar year will pay $500, those filing 50-174 foreclosures will pay $250, and those filing fewer than 50 foreclosures will pay $50. Most credit unions and community banks will pay $50, said the league. The fees will generate about $41 million a year, with $28 million earmarked for abandoned property cleanup and the remainder for housing counseling for homeowners.
- Provides for bankruptcy relief. SB16's language clarifies that a portion of the Conveyances Act is permissive, not mandatory, so it cannot be used to affect the validity or priority of a properly recorded mortgage by a trustee in bankruptcy. "This provides a tremendous benefit to every Illinois credit unions by protecting against the avoidance of mortgage liens in bankruptcy proceedings," said the league.
During discussions of the foreclosure problem various measures in the Illinois General Assembly the past two years, lawmakers widely acknowledged that credit unions were not the cause of the housing crisis and said SB 16 represents a fairly balanced compromise that will not only benefit credit unions but citizens of the state.