Governor Quinn Vetoes Illinois SB 2664 Tied to Foreclosed Condo Sales
A recent article from the Chicago Tribune discussed Illinois SB 2664 (Condo Assessments/Non-Payment Liens) and the amendatory veto issued by Governor Quinn.
Please below for the article followed by Governor Quinn’s amendatory veto message to the Senate.
Quinn kills bill to cap assessments tied to foreclosed condo sales
Pat Quinn on Tuesday killed a bill that would have limited the amount of money due to a condominium association when a foreclosed unit is sold.
The governor, who had to act on the bill by Wednesday, used an amendatory veto to change the bill, shifting some of the costs tied to the sale of a repossessed condo unit onto the bank that foreclosed on it.
Senate Bill 2664, introduced in January by Sen. Michael Hastings, D-Tinley Park, was designed to limit the costs that a buyer of a foreclosed condo unit would be responsible for covering, namely the unpaid regular and any special assessments that could have accrued while the unit was going through the foreclosure process.
The bill would have amended the state’s Condominium Property Act by capping what a condo association can require a buyer to pay to nine months of regular assessments. That would have stopped the surprises that were occurring at closing tables, when buyers found themselves with hefty extra bills to pay. But the proposal also meant that condo associations — and their homeowners — would have been on the hook for any extra or special assessments that went unpaid because a unit was in foreclosure.
Real estate trade groups backed the measure while condominium associations opposed it.
“Any changes to the foreclosure process must ensure that the interests of homeowners are protected and that the proper entity bears the cost when someone loses their home,” Quinn said in a letter to the General Assembly. “While it is reasonable for a new homeowner to pay up to nine months of regular assessments when they purchase a property out of foreclosure, the lender should also contribute to the costs that the homeowners in a condominium association incur when a lender forecloses on a property.”
By shifting the responsibility for costs above and beyond the nine-month period onto a lender, or an agency like Fannie Mae and Freddie Mac that also sell foreclosed homes, the governor is bringing another group of lobbyists into what had become a passionate debate during the legislation process.
“The thing that we will have to consider is whether we will try to override this and have the original language protected,” said Jon Broadbooks, a spokesman for the Illinois Association of Realtors.
Hastings said he was unsure whether he seek to override Quinn’s action, and said that perhaps the statute as a whole needs to be reviewed.
“I really do hope it spurs a discussion,” Hastings said. The amendatory veto “will continue to slow down (the home-buying process) but the housing market is recovering. I want it to be able to move faster.
“If you add banks into it, it brings a whole other dynamic into it.”
To view the online article, please click here.
Governor’s Amendatory Veto Message
August 19, 2014
To the Honorable Members of the
Illinois House of Representatives, 98th General Assembly:
I hereby return Senate Bill 2664 with specific recommendations for change.
As Governor, it is my duty to ensure that people can stay in their homes. Any changes to the foreclosure process must ensure that the interests of homeowners are protected and that the proper entity bears the cost when someone loses their home.
SB 2664 limits condominium associations from collecting more than the sum of nine months of regular monthly assessments from the purchaser of a foreclosed condominium. Following the procedure in SB 2664 would force the rest of the homeowners in the condominium association to bear the costs of a foreclosure. While it is reasonable for a new homeowner to pay up to nine months of regular assessments when they purchase a property coming out of foreclosure, the lender who owns the mortgage should also contribute to the costs that the homeowners in a condominium association incur when a lender forecloses on a property.
Therefore, pursuant to Article IV, Section 9(e) of the Illinois Constitution of 1970, I return Senate Bill 2664, entitled “AN ACT concerning civil law.” with the following specific recommendations for change:
on page 10, line 20, by replacing “The” with “Following a foreclosure sale, a consent foreclosure, common law strict foreclosure or the delivery of a deed in lieu of foreclosure, the mortgagee shall have the duty to pay to the association those amounts required by subdivision (g)(1) of Section 9 of this Act, except that, the”; and
on page 12, line 9, by replacing “subdivision subdivisions (g)(1) and” with “subdivisions (g)(1) and”.
With these changes, Senate Bill 2664 will have my approval. I respectfully request your concurrence.
Sincerely,
PAT QUINN
Governor
About Safeguard
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.
