Springfield Update

Illinois Association of REALTORS
State Capitol Report
Friday November 21, 2008

“Anyone who says they are not interested in politics is like a drowning man who insists he is not interested in water.” ~Author Unknown
The House and Senate reconvened in Springfield on Wednesday and Thursday to wrap up the annual fall session.
- An amendment #7 to House Bill 2973 was adopted this week after being worked out among the mortgage lending lobby, the Illinois Department of Financial and Professional Regulation (IDFPR), the Attorney General’s office and other interested parties to address foreclosure actions. The bill adds a new section to the Code of Civil Procedure regarding procedures and forbearances for delinquent residential mortgages. The bill provides that if a mortgage secured by residential real estate becomes delinquent by more than 30 days the mortgagee must mail a notice advising the homeowner that he/she may wish to seek approved housing counseling (defined in the legislation as a counseling agency approved by HUD). No foreclosure action can begin before mailing this notice- which is 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, then no legal action shall 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 to the mortgagee a proposed sustainable loan workout plan (defined in the legislation). The mortgagee determines whether to accept the proposed sustainable loan workout plan. If the parties agree to the plan no legal action shall be instituted for as long as the sustainable loan workout plan is complied with by the homeowner. If IDFPR 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. However, the legislation prohibits a for profit entity from being certified. The new provisions of this legislation do NOT apply to mortgages issued or originated on or after the effective date of this legislation and ONLY apply to a principal residence. These provisions will be repealed in two years. House Bill 2973, as amended was approved by the Senate on Thursday, November 20th and sent to the House for their consideration when the House returns in January. The bill is sponsored by Senator Jacqueline Collins and Representative Julie Hamos.
- As you may be aware, as part of the Housing and Economic Recovery Act of 2008, Congress included almost $4 billion in funding to HUD to provide for a Neighborhood Stabilization Program (NSP). The Program is intended to provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. The NSP is designed to provide grants to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods. All activities carried out under the NSP must benefit households earning no more than 120% of the area median income (AMI), and at least 25% of the funds must benefit households earning no more than 50% AMI. The State of Illinois received a total allocation of approximately $172 million, with about $53 million going towards a state-run program, and the rest of the monies being distributed directly to local governments similar to CDBG monies. IAR provided comments on the proposed plan for the state’s allocation. Local association Government Affairs Directors (GADs) are also working with their local governments on their allocation of NSP. Further information on the program can be found here: www.dhs.state.il.us/page.aspx?item=40593

- The House took final action on legislation this week that had been stalled since the spring session. House Bill 5037, sponsored by Representative Marlow Colvin, deals with distressed condominium property. This legislation is an initiative of the city of Chicago and is intended to expedite receivership procedures for abandoned or dilapidated condominium property. The legislation would allow a court to appoint a receiver to manage the property with the ultimate goal of selling the property and allowing the reuse of the property. The legislation was amended to address concerns raised by the IAR and the banking lobby and the IAR is now NEUTRAL. The bill has been sent to the Senate which has two days in January to consider the legislation.

- Legislation was overwhelmingly approved this week that creates a criminal offense for retaliating against a judge by filing any false lien or encumbrance against the real or personal property of a Supreme, Appellate, Circuit or Associate Judge in Illinois. Senate Bill 2452, sponsored by Senator John Cullerton and Representative Bob Molaro, has been sent to the Governor for his consideration.

- Final action also was taken this week on House Bill 5730 which extends the life of the Tax Increment Financing (TIF) district in the Village of Hoffman Estates from 23 to 35 years. The bill has been sent to the Governor for his consideration.

- Generally, State law requires municipal officials or employees involved in the planning and preparation of a TIF plan or project owning an interest, direct or indirect, in property included in the redevelopment to disclose such interest and to refrain from official involvement or voting on matters related to the area. Further, no member or employee can acquire any property except for specific exceptions added if a single parcel of property is used exclusively as the member’s primary residence. Senate Bill 826, approved by the House this week provides a two-year period whereby a single property interest could be acquired by a member of the municipal corporate authority and NOT constitute an interest in any property provided 1) the property is used exclusively as the member’s primary residence; 2) the member discloses the acquisition to the municipal clerk; 3) the acquisition is for fair market value; 4) the member acquires the property as a result of the property being publicly advertised for sale; and 5) the member refrains from voting on, and communicating with other members concerning, any matter when the benefits to the area would be significantly greater than the benefits to the municipality as a whole. A similar exception was approved in the 2006 session for a one-year period effective in 2007. SB 826, sponsored by Representative Dan Burke and Senator Michael Noland, has been sent to the Senate for consideration in January.

- As we previously reported the current leaders of the Senate, Senate President Emil Jones and Republican Leader Frank Watson, will end their terms as leaders at the end of the 95th General Assembly. Senator Jones did not seek reelection and Senator Frank Watson did not seek reelection as the leader but will remain as the Senator from the 51st District. The Senate Majority and Minority caucuses met this week and selected their new leaders for the 96th General Assembly which begins with the inaugural on January 14, 2009. The new Senate President will be Senator John Cullerton, a Democrat from the 6th District in Chicago. The new Republican Leader will be Senator Christine Radogno, a Republican from the 41st District in LaGrange. The leaders in the House, Michael Madigan and Tom Cross, will remain the same.

- The General Assembly is scheduled to reconvene January 12-13, 2009 to conclude the business of the 95th General Assembly. The 96th General Assembly, as noted above, will be sworn in on January 14, 2009.

- Speaker Michael Madigan has released a calendar for the 2009 session which is available on the General Assembly’s website- www.ilga.gov.