An Illinois foreclosure bill that could dramatically improve the state’s troubled relationship with distressed properties passed the state legislature this week, and is now awaiting final approval from Governor Pat Quinn.
Senate Bill 16, as the foreclosure bill is called, would streamline Illinois’ judicial foreclosure process for vacant homes, which have traditionally taken months if not years for the state to foreclose.
Illinois Foreclosure Bill – Increasing Foreclosure Filing
One of the Illinois foreclosure bill’s sponsors, State Senator Jacqueline Collins, said the bill will have a marked impact on foreclosure timelines in Illinois:
- The foreclosure timeline for vacant properties would decrease from 500 days to 100 days.
- Additionally, the bill will provide housing counseling to homeowners while raising $28 million to clean up vacant houses and lots and providing $13 million in grants to housing counselors.
- The key to funding those new programs and initiatives will be an increase in foreclosure filing fees, which will fluctuate based on how many foreclosure actions the lending institution files.
- Banks that file more than 175 foreclosure actions will pay an additional $500 fee for every filing, while banks filing 50 to 174 actions will pay $250, and banks filing less than 50 will pay $50.
- The additional fees will last through Jan. 1, 2018, should the bill become law.
Illinois Foreclosure Bill a Long-Awaited Change
In a statement, Collins said both community banks and larger financial institutions supported the foreclosure bill.
“What these parties had in common was a desire to break up the logjam of foreclosures currently clogging our court system and delaying the full recovery of our housing market,” she said. “With strong homeowner protections in place, everyone benefits from expedited foreclosures of truly abandoned properties.”
Vince Milito, the president of the Straub Milito Group with Coldwell Banker, often works with distressed properties, and he also spoke to the benefits of clearing out vacant, foreclosed properties. The longer such a property sits vacant, he explained, the longer it has to collect water damage, entice vandalism and negatively impact the property values of the surrounding homes; therefore, any increase in filing fees would be “pennies,” he said, compared to what losses banks suffer from vacant properties with elongated stays.
“The bill definitely could have a positive impact,” Milito said.
And the foreclosure process in Illinois can sure take a long time; indeed, according to RealtyTrac, the typical processing period for Illinois is 300 days, second only to New York’s 445 days, and in the wake of the housing downturn, Illinois has become a poster child for not only foreclosure backlog, but the need for judicial states to reform their foreclosure practices and catch up with their non-judicial brethren.