State presents 9-point plan to fix ‘sloppy' foreclosures in Illinois

CHICAGO - In an effort to clean up the foreclosure process in Illinois, Brent E. Adams, Secretary of the Illinois Department of Financial and Professional Regulation (IDFPR), today released a 9-point "affidavit preparation expectations" plan.

The release of these expectations, prepared in conjunction with the IDFPR's ongoing investigation of 20 loan servicers in Illinois, comes in the wake of revelations last September of potentially widespread deficiencies in the court documents presented by mortgage companies in the foreclosure process. Illinois is a leader among states and regulatory agencies in the country in formally establishing enhanced foreclosure processes.

"These new, common-sense expectations are designed to better protect all parties affected by the foreclosure process," said Secretary Adams, who also chairs the State's Mortgage Fraud Task Force. "Sloppy paperwork creates an unacceptable legal and financial risk for homeowners, successful bidders at foreclosure auctions, subsequent owners of foreclosed properties, and the industry."

The 9-point plan:

1. Affiants who sign affidavits in connection with foreclosure proceedings shall not use signature stamps to sign affidavits.

2. Affiants signing affidavits stating the amount owed by a borrower (hereinafter "prove-up affidavits") shall confirm that the numbers accurately reflect the numbers in the licensee's business records and are totaled correctly.

3. Affiants shall be individuals, not entities.

4. Affiants shall have the level of knowledge necessary to submit an affidavit in a judicial proceeding.

5. Lenders and servicers shall have processes in place to seek to ensure that affidavits used in connection with foreclosure proceedings are true, accurate, and complete, including that prove-up affidavits accurately reflect the amount due to the licensee.

6. To the extent that an affidavit is notarized, it shall be done in compliance with the law of the state in which the affidavit is being notarized, which generally requires that the affidavit be executed in the presence of the notary after the notary has administered the oath and that the notary appropriately dates the prove-up affidavit.

7. When using a form affidavit, Affiants shall not leave blanks or incomplete statements in the affidavit. Affiants shall date their signatures by hand on affidavits.

8. When the Affiant's signature is not plainly legible, the name of the Affiant shall be printed on the affidavit in order to permit the identity of the Affiant to be known.

9. Lenders and servicers shall not file unsigned affidavits with the court.

Lenders and loan servicers will be asked to commit to these expectations and will further be asked to direct their agents, law firms, and attorneys to comply with the expectations. The Department's effort to secure voluntary compliance with these expectations is designed to afford companies the opportunity to be industry leaders in this area. As the Department's investigation continues, it may yet issue mandatory orders against companies whose practices are deemed "unsafe or unsound."

Homeowners facing foreclosure and/or who have concerns or questions about the process may contact IDFPR's mortgage hotline (800) 532-8785.