Senate Bill 16, sponsored by Jacqueline Collins, D-Chicago, John Mulroe, D-Chicago, and former Reps. Karen Yarbrough, D-Chicago, and Joe Lyons, D-Chicago, will allow single-family homes and multifamily buildings that are not legally occupied to be eligible for an expedited foreclosure process that could be completed in as little as 90 days.
Previous Illinois law saw the foreclosure process for some properties last almost two years, which allowed the units to fall into disrepair, diminish price values for these assets and become bases for crime.
“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 in a news release.
Through SB 16, a lender can file a motion with a judge requesting a foreclosure of a property to be expedited. If the judge certifies that a property is abandoned, a foreclosure trial can proceed immediately and take anywhere from 90 to 180 days to complete, depending upon the type of property.
The legislation will help families who are at risk of foreclosure from losing their homes by directing filing fees paid by mortgage issuers into two funds maintained by the Illinois Housing Development Authority: the Foreclosure Prevention Program Fund and the Abandoned Property Municipality Relief Program.
Through the end of 2017, banks and other lending institutions will pay fees—which range from $50 to $500—depending on how many foreclosures they file each year. The law is expected to generate more than $120 million over the next three years.
As a result of these fees, approximately $28 million will be provided annually to local governments to maintain and secure abandoned residential properties to get them back into productive use. It will also provide an estimated $13 million per year for housing counseling assistance.
The law goes into effect on June 1.
“For too long our broken foreclosure system has burdened communities with abandoned homes and been a drag on our economy, but now we can get to work turning these properties from problems into solutions,” Yarbrough said, who is now the recorder of deeds for Cook County. “The provisions in this law to help families avoid foreclosure will also play a big role in the housing recovery.”