Author: CT - NCS Chicago

By Douglas M. Karlen
Vice President and Regional Counsel 
Chicago Title Insurance Company

DOWNLOAD THE ARTICLE HERE.

Since August 10, 2015, trustees of personal trusts have enjoyed the benefits of a new statute that protects the privacy of trust information. An amendment to the Trusts and Trustees Act reduces, or even eliminates, the need for a trustee to deliver a copy of a personal trust agreement to anyone other than a beneficiary. See Public Act 99-337 (SB 1877), effective August 10, 2015, codified at new 760 ILCS 5/8.5. The new section creates a Certification of Trust upon which third parties may rely. In doing so, Illinois joins several other states that protect the privacy of trust information and documents.

New Section 8.5 applies to personal trusts (revocable, irrevocable, living, etc.). It does not apply to Illinois land trusts. For example, it does not apply if title to real estate is vested in an institutional trustee, such as the Chicago Title Land Trust Company.

Title companies have adjusted title examining and clearance practices to accommodate the new Certification of Trust.

THE CERTIFICATION OF TRUST

Instead of furnishing a copy of the trust instrument to a person other than the beneficiary, the trustee may furnish to the person a Certification of Trust. A Certification of Trust form is set out at 760 ILCS 5/8.5(j), but use of this statutory form is not mandatory. Like the statutory form, however, a non-statutory Certification of Trust must contain the following information:

1. A statement that the trust exists and the date the trust instrument was executed;
2. The identity of the settlor;
3. The identity and address of the currently acting trustee;
4. The powers of the trustee;
5. The revocability or irrevocability of the trust, whether the trust is amendable or unamendable, and the identity of any person holding a power to revoke or amend the trust;
6. The authority of co-trustees to sign or otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee;
7. The trust’s taxpayer identification number; and
8. The manner of taking title to trust property.

See 760 ILCS 5/8.5(a).

A Certification of Trust need not include the dispositive terms of the trust, 760 ILCS 5/8.5(d), but it must include a statement that the trust has not been revoked, modified, or amended “in any manner that would cause the representations contained in the certification of trust to be incorrect.” 760 ILCS 5/8.5(c). One or more of the trustees must sign the Certification, and the recipient (third party) may require an acknowledgement. 760 ILCS 5/8.5(b).

By Douglas M. Karlen
Vice President and Regional Counsel 
Chicago Title Insurance Company

DOWNLOAD THE ARTICLE HERE.

Several new laws affecting mortgages and mortgage foreclosures recently became effective. This article will describe these new laws.

Mortgage Originators

Public Act 99-113 (HB 2814), effective July 23, 2015, amends Section 1-3 of the Residential Mortgage License Act of 1987, 205 ILCS 635/1-3, to counteract the holding in a recent Illinois appellate court case. See First Mtg. Co. v. Dina, 2014 IL App. (2d) 130567 (a mortgage is void ab initio if originated by an unlicensed lender and any judgment of foreclosure based on such a mortgage is also void).

Section 1-3, entitled Necessity for License, is amended at paragraph (e) to state:

A mortgage loan brokered, funded, originated, serviced, or purchased by a party who is not licensed under this Section shall not be held to be invalid solely on the basis of a violation under this Section.

The amendment goes on to state that this enactment is declarative of existing law—the usual remark when the legislature seeks to upend a judicial ruling.

COMMENT

The amendment effectively eliminates one defense to a mortgage foreclosure proceeding. See also LVNV Funding, LLC v. Trice, 2015 IL 116129 (a judgment is not void if the court that entered the judgment had both personal and subject matter jurisdiction).

Deceased Mortgagors

In a mortgage foreclosure proceeding, case law, court rule, and statute now require the appointment of a special representative for a deceased mortgagor in order to vest subject matter jurisdiction in the trial court. See ABN AMRO Mtg. Group, Inc. v. McGahan, 237 Ill.2d 526 (2010); Ill. S. Ct. Rule 113(i) (referencing 735 ILCS 5/13-209); and Section 15-1501(h) of the Illinois Mortgage Foreclosure Law, 735 ILCS 5/15-1501(h). Public Act 99-24 (SB 735), effective January 1, 2016, amends Section 15-1501(h) to clarify when a special representative need not be appointed. As amended, paragraph (h) states that the court is not required to appoint a special representative for a deceased mortgagor if there is a:

1. Living person, persons, or entity holding a 100% interest in the property as the deceased mortgagor’s surviving joint tenant or surviving tenant by the entirety;
2. Beneficiary under a transfer on death instrument (TODI) executed by the mortgagor and recorded prior to the mortgagor’s death;
3. Person, persons, or entity who acquired title through a conveyance of the property from the mortgagor prior to the mortgagor’s death;
4. Person, persons, or entity who acquired title through a conveyance of the property from the administrator or executor of the mortgagor’s probate estate; or
5. Trust that acquired title through a conveyance of the property from the mortgagor or from any other person, persons, or entities identified above.

COMMENT