Illinois Compiled Statutes 765 ILCS 940/50 – Violations
Current as of: 2024 | Check for updates
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(a) It is a violation for a distressed property consultant to:
(1) claim, demand, charge, collect, or receive any
(1) claim, demand, charge, collect, or receive any
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compensation until after the distressed property consultant has fully performed each service the distressed property consultant contracted to perform or represented he or she would perform;
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(2) claim, demand, charge, collect, or receive any
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fee, interest, or any other compensation that does not comport with Section 70;
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(3) take a wage assignment, a lien of any type on
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real or personal property, or other security to secure the payment of compensation. Any such security is void and unenforceable;
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(4) receive any consideration from any third party in
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connection with services rendered to an owner unless the consideration is first fully disclosed to the owner;
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(5) acquire any interest, directly or indirectly, or
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by means of a subsidiary or affiliate in a distressed property from an owner with whom the distressed property consultant has contracted;
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(6) take any power of attorney from an owner for any
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purpose, except to inspect documents as provided by law;
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(7) induce or attempt to induce an owner to enter a
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contract that does not comply in all respects with Sections 10 and 15 of this Act; or
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(8) enter into, enforce, or act upon any agreement
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with a foreclosure defendant, whether the foreclosure is completed or otherwise, if the agreement provides for a division of proceeds between the foreclosure defendant and the distressed property consultant derived from litigation related to the foreclosure.
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(b) A distressed property purchaser, in the course of a distressed property conveyance, shall not:
(1) enter into, or attempt to enter into, a
Terms Used In Illinois Compiled Statutes 765 ILCS 940/50
- Appraisal: A determination of property value.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Personal property: All property that is not real property.
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
- State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
(1) enter into, or attempt to enter into, a
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distressed property conveyance unless the distressed property purchaser verifies and can demonstrate that the owner of the distressed property has a reasonable ability to pay for the subsequent conveyance of an interest back to the owner of the distressed property and to make monthly or any other required payments due prior to that time;
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(2) fail to make a payment to the owner of the
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distressed property at the time the title is conveyed so that the owner of the distressed property has received consideration in an amount of at least 82% of the property’s fair market value, or, in the alternative, fail to pay the owner of the distressed property no more than the costs necessary to extinguish all of the existing obligations on the distressed property, as set forth in subdivision (b)(10) of Section 45, provided that the owner’s costs to repurchase the distressed property pursuant to the terms of the distressed property conveyance contract do not exceed 125% of the distressed property purchaser’s costs to purchase the property. If an owner is unable to repurchase the property pursuant to the terms of the distressed property conveyance contract, the distressed property purchaser shall not fail to make a payment to the owner of the distressed property so that the owner of the distressed property has received consideration in an amount of at least 82% of the property’s fair market value at the time of conveyance or at the expiration of the owner’s option to repurchase.
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(3) enter into repurchase or lease terms as part of
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the subsequent conveyance that are unfair or commercially unreasonable, or engage in any other unfair conduct;
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(4) represent, directly or indirectly, that the
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distressed property purchaser is acting as an advisor or a consultant, or in any other manner represent that the distressed property purchaser is acting on behalf of the homeowner, or the distressed property purchaser is assisting the owner of the distressed property to “save the house”, “buy time”, or do anything couched in substantially similar language;
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(5) misrepresent the distressed property purchaser’s
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status as to licensure or certification;
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(6) do any of the following until after the time
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during which the owner of a distressed property may cancel the transaction:
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(A) accept from the owner of the distressed
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property an execution of any instrument of conveyance of any interest in the distressed property;
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(B) induce the owner of the distressed property
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to execute an instrument of conveyance of any interest in the distressed property; or
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(C) record with the county recorder of deeds any
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document signed by the owner of the distressed property, including but not limited to any instrument of conveyance;
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(7) fail to reconvey title to the distressed property
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when the terms of the conveyance contract have been fulfilled;
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(8) induce the owner of the distressed property to
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execute a quit claim deed when entering into a distressed property conveyance;
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(9) enter into a distressed property conveyance where
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any party to the transaction is represented by power of attorney;
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(10) fail to extinguish all liens encumbering the
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distressed property, immediately following the conveyance of the distressed property, or fail to assume all liability with respect to the lien in foreclosure and prior liens that will not be extinguished by such foreclosure, which assumption shall be accomplished without violations of the terms and conditions of the lien being assumed. Nothing herein shall preclude a lender from enforcing any provision in a contract that is not otherwise prohibited by law;
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(11) fail to complete a distressed property
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conveyance before a notary in the offices of a title company licensed by the Department of Financial and Professional Regulation, before an agent of such a title company, a notary in the office of a bank, or a licensed attorney where the notary is employed; or
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(12) cause the property to be conveyed or encumbered
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without the knowledge or permission of the distressed property owner, or in any way frustrate the ability of the distressed property owner to complete the conveyance back to the distressed property owner.
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(c) There is a rebuttable presumption that an appraisal by a person licensed or certified by an agency of this State or the federal government is an accurate determination of the fair market value of the property.
(d) “Consideration” in item (2) of subsection (b) means any payment or thing of value provided to the owner of the distressed property, including reasonable costs paid to independent third parties necessary to complete the distressed property conveyance or payment of money to satisfy a debt or legal obligation of the owner of the distressed property.
“Consideration” shall not include amounts imputed as a downpayment or fee to the distressed property purchaser, or a person acting in participation with the distressed property purchaser.
(e) An evaluation of “reasonable ability to pay” under subsection (b)(1) of this Section 50 shall include debt to income ratio, fair market value of the distressed property, and the distressed property owner’s payment history. There is a rebuttable presumption that the distressed property purchaser has not verified reasonable payment ability if the distressed property purchaser has not obtained documents of assets, liabilities, and income, other than a statement by the owner of the distressed property.
(d) “Consideration” in item (2) of subsection (b) means any payment or thing of value provided to the owner of the distressed property, including reasonable costs paid to independent third parties necessary to complete the distressed property conveyance or payment of money to satisfy a debt or legal obligation of the owner of the distressed property.
“Consideration” shall not include amounts imputed as a downpayment or fee to the distressed property purchaser, or a person acting in participation with the distressed property purchaser.
(e) An evaluation of “reasonable ability to pay” under subsection (b)(1) of this Section 50 shall include debt to income ratio, fair market value of the distressed property, and the distressed property owner’s payment history. There is a rebuttable presumption that the distressed property purchaser has not verified reasonable payment ability if the distressed property purchaser has not obtained documents of assets, liabilities, and income, other than a statement by the owner of the distressed property.