The Illinois Senate successfully passed a bill that attempts to extend protections for distressed borrowers for another three years.
Senate Bill 56 is designed to keep the '30-30-30' grace-period law, which expires this year, active until 2016. State Sen. Jacqueline Collins, D-Chicago, managed to get the bill through the Senate, but the House and governor still have to approve the measure.
In its current form, the 30-30-30 rule gives borrowers a 30-day grace period after a missed payment before sending a notice. In addition, homeowners receive another 30 days to seek counseling and are alloted another 30 days to work with a housing counselor and lender.
The bank can only file for foreclosure under three scenarios: if the homeowner does not obtain counseling services within 30 days of the initial notice, if the homeowner and counselor do not present an acceptable plan, or if the borrower fails to workout the proposed plan, according to the bill.
"Foreclosure counseling is a proven tool in the effort to stabilize neighborhoods and give homeowners a chance to make it through tough times," said Sen. Collins after the bill's Senate passage.
Since 2009, more than 48,000 homeowners have received free counseling through the Illinois Foreclosure Prevention Network. Additionally, the Hardest Hit program has assisted more than 6,500 households in making their mortgage payments, according to the Senator.
"Approved counselors can help homeowners evaluate their finances, take control of their spending, negotiate with their lenders and ultimately start making manageable payments and keep their homes," Collins said.