Illinois Supreme Court Rule 99.1 -- Mortgage Foreclosure Mediation Programs

Illinois Supreme Court Rule 99.1 -- Mortgage Foreclosure Mediation Programs

Posted By Sulaiman Law Group, Ltd. || 22-Feb-2013

Newly implemented Rule 99.1 establishes standardized requirements for mortgage foreclosure mediation programs. Judicial circuits that currently have a mediation program (like Will County) will have until June 1, 2013 to bring their programs into compliance with the Rule. 

Judicial circuits that wish to implement a foreclosure mediation program must submit a plan the the Administrative Offices of the Illinois Courts and include local rules that address several factors. In addition to compliance with Illinois Supreme Court Rule 99, judicial circuits must also draft local rules addressing 1) resources to provide meaningful access to HUD-certified housing counselling services; 2) resources to provide meaningful access to pro bono legal representation; 3) resources to provide meaningful language/translator access for people participating in the mediation program; 4) whether any costs are charged to any participant in the mortgage foreclosure case; 5) a sustainability plan that includes plans for long-term funding; and 6) the training of judges, key court personnel, and volunteers on mortgage foreclosure mediation. 

Perhaps the most significant provisions of Rule 99.1 are the requirements that local rules address access to HUD counsellors and to pro bono legal assistance. Many homeowners are unaware that resources exist to assist them. Many people fall victim to mortgage rescue scams or other predatory counseling scams that require money be paid up front for services that can be obtained for free. Addressing access to reputable, free assistance is a great first step towards protecting Illinois homeowners from those who seek to exploit them.

Hopefully, more counties will roll out mediation programs to help reduce the burden on their foreclosure courtrooms. Although many mediation attempts fail, each mediation that successfully ends in a loan modification or other remedy is one less case on the court's docket. Given that the FHFA has proposed charging additional guaranty fees for Illinois loans purchased by Fannie and Freddie (which would increase the cost of mortgages in Illinois), anything to help clear dockets and decrease the average length of a foreclosure case is a welcome benefit. 

Although I would normally oppose accelerating the foreclosure timeline, it is my hope that the other two new rules issued by the Supreme Court will offset that acceleration by promoting and supporting loan modifications and other loss mitigation efforts.