Commercial Banking, Collections, and Bankruptcy

House Bill 723

Topic: 
Real Estate Appraisal Fees Article of the Residential Real Property Disclosure Act

(Rita, D-Blue Island) provides that in any residential real estate closing document in which real estate appraisal fees are shown, the fee paid to an appraiser must be shown separately from the fee paid to an appraisal management company. House Bill 723 was just introduced. 

Senate Bill 584

Topic: 
Administrative Procedure Act

(Barickman, R-Bloomington) provides a means for correcting inadvertent failures to name necessary parties in actions for administrative review.

(1) It amends the Administrative Procedure Act (APA) to mandate that final administrative orders list all of the parties of record together with their last known address of record. The final order must also include whether there are any agency rules requiring a motion for reconsideration as a part of obtaining a reviewable final administrative decision and, if so, the rules citation. 

(2) It also amends the APA to allow service by electronic mail if agreed to by the parties in contested cases.  

(3) It amends the Administrative Review Law (ARL) in the Code of Civil Procedure to state that this Article is to be liberally construed in the interests of justice to grant an orderly method of judicial review of administrative agency decisions.

(4) It amends the ARL to prohibit an action for administrative review to be dismissed for lack of jurisdiction based on the misnomer of any agency that is properly served with summons issued in the action within the applicable time limits. It also prohibits dismissal for failure to perfectly name an agent if a timely action of administrative review has been filed that identifies the final administrative decision under review and makes a good faith effort to properly name the administrative agency.

(5) It amends the ARL to allow a court to correct misnomers for an erroneous identification of the administrative agency.

Senate Bill 584 was just introduced.

 

Senate Bill 9

Topic: 
Business Opportunity Tax Act

(Hutchinson, D-Chicago Heights) creates the Business Opportunity Tax that imposes a tax on all entities that issue a Form W-2 or a Form 1099 to a resident of Illinois. It imposes a sliding scale of taxation based on the employer’s total Illinois payroll as follows. (1) if the taxpayer’s total Illinois payroll for the taxable year is less than $100,000, then the annual tax is $225; (2) if the taxpayer’s total Illinois payroll for the taxable year is $100,000 or more but less than $250,000, then the annual tax is $750; (3) if the taxpayer’s total Illinois payroll for the taxable year is $250,000 or more but less than $500,000, then the annual tax is $3,750; (4) if the taxpayer’s total Illinois payroll for the taxable year is $500,000 or more but less than $1,500,000, then the annual tax is $7,500; and (5) if the taxpayer’s total Illinois payroll for the taxable year is $1,500,000 or more, then the annual tax is $15,000.

The following are exempt from taxation under this Act: (1) governmental employers described in Section 707 of the Illinois Income Tax Act; and (2) not-for-profit corporations that are exempt from taxation under Sections 501(c) or 501(d) of the Internal Revenue Code or organized under the General Not For Profit Corporation Act of 1986. Senate Amendment No. 2 becomes the bill and was just filed. It is part of the “grand bargain” being attempted by Senate leaders.

 

Discharging Student Loans in Bankruptcy: Yes, it Can Be Done

By Joshua Gross
February
2017
Article
, Page 26
Student loans, unlike most debts, are nondischargeable unless you meet the stringent "undue hardship" test. But debtors with the right evidence and characteristics can get their loans discharged.

Builders Bank v. Fed. Deposit Ins. Corp.

Federal 7th Circuit Court
Civil Court
Banking
Citation
Case Number: 
No. 16-2852
Decision Date: 
January 19, 2017
Federal District: 
N.D. Ill., E. Div.
Holding: 
Vacated and remanded

Dist. Ct. erred in dismissing on jurisdictional grounds plaintiff-Bank’s appeal of defendant’s rating of said Bank under Uniform Financial Institutions Rating System. While Dist. Ct. found that it lacked jurisdiction because defendant’s assignment of rating is committed to agency discretion under 5 USC section 701(a)(2), Ct. of Appeals found that Dist. Ct. could resolve questions as to whether defendant’s final rating was arbitrary or whether defendant properly calculated capital rating of plaintiff’s Bank. As such, case was remanded to Dist. Ct. for determination of plaintiff’s appeal on its merits.

Senate Bill 192

Topic: 
Mortgage foreclosure

(Althoff, R-Crystal Lake) provides that the mortgagee establishes a prima facie case for foreclosure once the following evidence has been offered and admitted: (1) the mortgage at issue in the case; and (2) the note at issue in the case. The mortgagee is not required to present further evidence to establish a prima facie case of foreclosure, and once a prima facie case of foreclosure has been established by the mortgagee, the burden of proof and of presenting evidence shifts to the mortgagor to prove the amount owed on the note, payment, and any affirmative defense the mortgagor claims. Failure of the mortgagor to present evidence of the amount owed on the note constitutes a waiver of that issue, regardless of any contrary pleadings, and the mortgagee thereafter has the burden of presenting evidence of the amount due on the note. If the burden of presenting evidence regarding the amount owed on the note shifts back to the mortgagee because of the mortgagor's failure to present this evidence, the amount owed on the note may be proven by affidavit. If the mortgagor presents evidence of the amount owed on the note, the mortgagee may present evidence in rebuttal, and this rebuttal evidence must be taken in open court. Senate Bill 192 was just introduced. 

House Bill 367

Topic: 
The Value after Rehabilitation Appraisal Act

(Ford, D-Chicago) provides that an appraisal may take value after rehabilitation into account for any program administered by this State that requires an appraisal to be performed on real estate (unless prohibited by federal law or regulation). An appraisal that takes value after rehabilitation into account must be accepted to the same extent that other appraisal methods for real estate sales and refinances are accepted. House Bill 367 has just been introduced. 

Perron v. J.P. Morgan Chase Bank, N.A.

Federal 7th Circuit Court
Civil Court
Real Estate Settlement Procedures Act
Citation
Case Number: 
No. 15-2206
Decision Date: 
January 11, 2017
Federal District: 
S.D. Ind., Indianapolis Div.
Holding: 
Affirmed

Dist. Ct. did not err in granting defendant-bank’s motion for summary judgment in plaintiffs-homeowners’ RESPA action, alleging that defendant failed to supply them with sufficient information regarding their mortgage escrow account, when dispute arose regarding defendant’s payment of home insurance premium from said escrow account to wrong insurance company. Erroneous payment of insurance premium was caused by plaintiffs’ failure to inform defendant that they had changed insurance company, and information supplied by defendant, that included detailed accounting of loan’s payment history, as well as breakdown of principal, interest and escrow payments, sufficiently complied with RESPA. Fact that defendant did not identify insurance company that had received erroneous escrow payment or provide reasons for holding plaintiffs’ mortgage payment “in suspense” did not require different result where defendant had previously supplied such information to plaintiffs. Ct. further rejected plaintiffs’ claim that they could recover emotional damages associated with dissolution of their marriage as result of instant alleged RESPA violation.

Bullet Express, Inc. v. New Way Logistics, Inc.

Illinois Appellate Court
Civil Court
Punitive Damages
Citation
Case Number: 
2016 IL App (1st) 160651
Decision Date: 
Friday, December 30, 2016
District: 
1st Dist.
Division/County: 
Cook Co., 5th Div.
Holding: 
Affirmed.
Justice: 
GORDON

After bench trial,m court found that Defendant was liable to Plaintiff for tortious interference with a prospective economic advantage, and awarded $45,141 in lost profits, plus punitive damages. Defendant picked up and refused to deliver 2 cargo loads that Plaintiff had hired Defendant to deliver to a customer, which Defendant did in an attempt to force Plaintiff to pay Defendant funds that Plaintiff allegedly owed Defendant. Ample evidence in record supports inference that it was defendant's conduct that caused a customer to cease doing business with Plaintiff. No abuse of discretion in court awarding $22,000 in punitive damages on tortious interference count. (HALL and REYES, concurring.)

Smith v. Capital One Bank

Federal 7th Circuit Court
Civil Court
Bankruptcy
Citation
Case Number: 
Nos. 16-1422 & 16-1423 Cons.
Decision Date: 
December 22, 2016
Federal District: 
E.D. Wisc.
Holding: 
Affirmed

Dist. Ct. did not err in reversing Bankruptcy Ct. order that found that defendant’s lawsuit against non-filing spouse of debtor in Chapter 13 proceeding violated co-debtor stay provisions of Bankruptcy Code (11 USC section 1301(a)), where said lawsuit sought to collect on spouse’s credit card debt. In order for co-debtor stay of legal proceedings to apply: (1) there must be action to collect on consumer debt; (2) consumer debt must be debtor’s; and (3) action to collect on debt must be against individual that is liable on such debt with debtor. Here, credit card debt of spouse was not “consumer debt of the debtor” so as to trigger co-debtor stay provisions since said debt was only spouse’s debt. Ct. rejected debtor’s claim that Wisconsin’s marital law converted her husband’s debt into her own since mere fact that non-filing spouse happens to have shared property interests with filing spouse, without more, does not make debts involved in lawsuit debts of filing spouse.