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Part 15 - Judicial Foreclosure Procedure

      (735 ILCS 5/Art. XV Pt. 15 heading)Part 15. Judicial Foreclosure Procedure

(735 ILCS 5/15‑1501) (from Ch. 110, par. 15‑1501)     Sec. 15‑1501. Parties.     (a) Necessary Parties. For the purposes of Section 2‑405 of the Code of Civil Procedure, only (i) the mortgagor and (ii) other persons (but not guarantors) who owe payment of indebtedness or the performance of other obligations secured by the mortgage and against whom personal liability is asserted shall be necessary parties defendant in a foreclosure. The court may proceed to adjudicate their respective interests, but any disposition of the mortgaged real estate shall be subject to (i) the interests of all other persons not made a party or (ii) interests in the mortgaged real estate not otherwise barred or terminated in the foreclosure.     (b) Permissible Parties. Any party may join as a party any other person, although such person is not a necessary party, including, without limitation, the following:         (1) All persons having a possessory interest in the

mortgaged real estate;

(2) A mortgagor's spouse who has waived the right of

homestead;

(3) A trustee holding an interest in the mortgaged

real estate or a beneficiary of such trust;

(4) The owner or holder of a note secured by a trust

deed;

(5) Guarantors, provided that in a foreclosure any

such guarantor also may be joined as a party in a separate count in an action on such guarantor's guaranty;

(6) The State of Illinois or any political

subdivision thereof, where a foreclosure involves real estate upon which the State or such subdivision has an interest or claim for lien, in which case "An Act in relation to immunity for the State of Illinois", approved December 10, 1971, as amended, shall not be effective;

(7) The United States of America or any agency or

department thereof where a foreclosure involves real estate upon which the United States of America or such agency or department has an interest or a claim for lien;

(8) Any assignee of leases or rents relating to the

mortgaged real estate;

(9) Any person who may have a lien under the

Mechanic's Lien Act; and

(10) Any other mortgagee or claimant.     (c) Unknown Owners. Any unknown owner may be made a party in accordance with Section 2‑413 of the Code of Civil Procedure.     (d) Right to Become Party. Any person who has or claims an interest in real estate which is the subject of a foreclosure or an interest in any debt secured by the mortgage shall have an unconditional right to appear and become a party in such foreclosure in accordance with subsection (e) of Section 15‑1501, provided, that neither such appearance by a lessee whose interest in the real estate is subordinate to the interest being foreclosed, nor the act of making such lessee a party, shall result in the termination of the lessee's lease unless the termination of the lease or lessee's interest in the mortgaged real estate is specifically ordered by the court in the judgment of foreclosure.     (e) Time of Intervention.         (1) Of Right. A person not a party, other than a

nonrecord claimant given notice in accordance with paragraph (2) of subsection (c) of Section 15‑1502, who has or claims an interest in the mortgaged real estate may appear and become a party at any time prior to the entry of judgment of foreclosure. A nonrecord claimant given such notice may appear and become a party at any time prior to the earlier of (i) the entry of a judgment of foreclosure or (ii) 30 days after such notice is given.

(2) In Court's Discretion. After the right to

intervene expires and prior to the sale in accordance with the judgment, the court may permit a person who has or claims an interest in the mortgaged real estate to appear and become a party on such terms as the court may deem just.

(3) Later Right. After the sale of the mortgaged

real estate in accordance with a judgment of foreclosure and prior to the entry of an order confirming the sale, a person who has or claims an interest in the mortgaged real estate, may appear and become a party, on such terms as the court may deem just, for the sole purpose of claiming an interest in the proceeds of sale. Any such party shall be deemed a party from the commencement of the foreclosure, and the interest of such party in the real estate shall be subject to all orders and judgments entered in the foreclosure.

(4) Termination of Interest. Except as provided in

Section 15‑1501(d), the interest of any person who is allowed to appear and become a party shall be terminated, and the interest of such party in the real estate shall attach to the proceeds of sale.

(f) Separate Actions. Any mortgagee or claimant, other than the mortgagee who commences a foreclosure, whose interest in the mortgaged real estate is recorded prior to the filing of a notice of foreclosure in accordance with this Article but who is not made a party to such foreclosure, shall not be barred from filing a separate foreclosure (i) as an intervening defendant or counterclaimant in accordance with subsections (d) and (e) of Section 15‑1501 if a judgment of foreclosure has not been entered in the original foreclosure or (ii) in a new foreclosure subsequent to the entry of a judgment of foreclosure in the original foreclosure.     (g) Service on the State of Illinois. When making the State of Illinois a party to a foreclosure, summons may be served by sending, by registered or certified mail, a copy of the summons and the complaint to the Attorney General. The complaint shall set forth with particularity the nature of the interest or lien of the State of Illinois. If such interest or lien appears in a recorded instrument, the complaint must state the document number of the instrument and the office wherein it was recorded. (Source: P.A. 88‑265.)

    (735 ILCS 5/15‑1501.5)
    Sec. 15‑1501.5. Return from combat stay. In addition to any rights and obligations provided under the federal Service members Civil Relief Act, whenever it is determined in a foreclosure proceeding that the mortgagor defendant is a person who was deployed to a combat or combat support posting while on active military duty and serving overseas within the previous 12 months, the court must stay the proceedings for a period of 90 days upon application to the court by the mortgagor defendant. "Active military duty" means, for purposes of this Section, service on active duty as a member of the Armed Forces of the United States, the Illinois National Guard, or any reserve component of the Armed Forces of the United States.
(Source: P.A. 96‑901, eff. 1‑1‑11.)

(735 ILCS 5/15‑1502) (from Ch. 110, par. 15‑1502)     Sec. 15‑1502. Nonrecord Claimants. (a) Right to Become Record Claimant. At any time prior to the recording of a notice of foreclosure in accordance with Section 15‑1503, a nonrecord claimant or unknown owner may become a record claimant with respect to the foreclosure by recording a notice of such claimant's interest in the mortgaged real estate in accordance with Section 15‑1218.     (b) Rights of Nonrecord Claimants After Notice. The interest in the mortgaged real estate of a nonrecord claimant who is given notice of the foreclosure as provided in paragraph (2) of subsection (c) of Section 15‑1502 shall be barred and terminated by any judgment of foreclosure to the same extent as if such claimant had been a party.     (c) Terminating Rights of Nonrecord Claimants. (1) Contents of Affidavit. A party in a foreclosure seeking to bar and terminate the interest in the mortgaged real estate of nonrecord claimants shall file in the office of the clerk of the court in which such action is pending an affidavit stating (i) the names and respective present or last known places of residence of such nonrecord claimants, or (ii) that the existence, names or the present or last known places of residence, or both, of such nonrecord claimants are unknown as of that time to the party and to the party's attorney. Such affidavit, with respect to names and places of residence, may be made upon information and belief of the affiant. The affidavit need not state that inquiry has been made to ascertain the names or present or last known places of residence of such nonrecord claimants, and no such inquiry need be made.     (2) Notice. At least 30 days prior to the entry of a judgment of foreclosure, any person identified in the affidavit described in paragraph (1) of subsection (c) of Section 15‑1502 shall be given a notice of the foreclosure complying with the requirements of Section 15‑1503 by the party filing the affidavit. Such notice shall be given in the manner and upon the terms and conditions set forth in Sections 2‑206 and 2‑207 of the Code of Civil Procedure, except that (i) such notice with respect to nonrecord claimants whose names are not set forth in such affidavit, instead of being addressed to such nonrecord claimants by name, may simply be addressed to "Nonrecord Claimants" and (ii) when the mortgaged real estate is located within a municipality in a county with a population under 2,000,000, publication shall be in a newspaper generally circulated in such municipality. Such notice shall have the same effect with respect to all nonrecord claimants designated therein as though a notice containing their names had been published in accordance with Sections 2‑206 and 2‑207 of the Code of Civil Procedure and may be combined with any notice published against parties defendant in the same action pursuant to those Sections.     (3) Errors. Any inaccuracy in the affidavit described in paragraph (1) of subsection (c) of Section 15‑1502 or the failure to file such affidavit or the failure to give notice in accordance with paragraph (2) of subsection (c) of Section 15‑1502 shall not invalidate any sale made pursuant to this Article.     (4) Rights of Barred Nonrecord Claimant. Nothing in paragraph (3) of subsection (c) of Section 15‑1502 shall affect the rights, if any, of any nonrecord claimant whose interest in the mortgaged real estate was barred and terminated to bring an action against any party to the foreclosure on whose behalf the affidavit was filed, on account of the filing of an inaccurate affidavit by such party in accordance with paragraph (1) of subsection (c) of Section 15‑1502 or the failure to give notice in accordance with paragraph (2) of subsection (c) of Section 15‑1502. (Source: P.A. 84‑1462.)

    (735 ILCS 5/15‑1502.5)
    (Section scheduled to be repealed on July 1, 2013)
    Sec. 15‑1502.5. Homeowner protection.
    (a) As used in this Section:
    "Approved counseling agency" means a housing counseling agency approved by the U.S. Department of Housing and Urban Development.
    "Approved Housing Counseling" means in‑person counseling provided by a counselor employed by an approved counseling agency to all borrowers, or documented telephone counseling where a hardship would be imposed on one or more borrowers. A hardship shall exist in instances in which the borrower is confined to his or her home due to medical conditions, as verified in writing by a physician or the borrower resides 50 miles or more from the nearest approved counseling agency. In instances of telephone counseling, the borrower must supply all necessary documents to the counselor at least 72 hours prior to the scheduled telephone counseling session.
    "Delinquent" means past due with respect to a payment on a mortgage secured by residential real estate.
    "Department" means the Department of Financial and Professional Regulation.
    "Secretary" means the Secretary of Financial and Professional Regulation or other person authorized to act in the Secretary's stead.
    "Sustainable loan workout plan" means a plan that the mortgagor and approved counseling agency believe shall enable the mortgagor to stay current on his or her mortgage payments for the foreseeable future when taking into account the mortgagor income and existing and foreseeable debts. A sustainable loan workout plan may include, but is not limited to, (1) a temporary suspension of payments, (2) a lengthened loan term, (3) a lowered or frozen interest rate, (4) a principal write down, (5) a repayment plan to pay the existing loan in full, (6) deferred payments, or (7) refinancing into a new affordable loan.
    (b) Except in the circumstance in which a mortgagor has filed a petition for relief under the United States Bankruptcy Code, no mortgagee shall file a complaint to foreclose a mortgage secured by residential real estate until the requirements of this Section have been satisfied.
    (c) Notwithstanding any other provision to the contrary, with respect to a particular mortgage secured by residential real estate, the procedures and forbearances described in this Section apply only once per subject mortgage.
    Except for mortgages secured by residential real estate in which any mortgagor has filed for relief under the United States Bankruptcy Code, if a mortgage secured by residential real estate becomes delinquent by more than 30 days the mortgagee shall send via U.S. mail a notice advising the mortgagor that he or she may wish to seek approved housing counseling. Notwithstanding anything to the contrary in this Section, nothing shall preclude the mortgagor and mortgagee from communicating with each other during the initial 30 days of delinquency or reaching agreement on a sustainable loan workout plan, or both.
    No foreclosure action under Part 15 of Article XV of the Code of Civil Procedure shall be instituted on a mortgage secured by residential real estate before mailing the notice described in this subsection (c).
    The notice required in this subsection (c) shall state the date on which the notice was mailed, shall be headed in bold 14‑point type "GRACE PERIOD NOTICE", and shall state the following in 14‑point type: "YOUR LOAN IS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION."
    The notice shall also list the Department's current consumer hotline, the Department's website, and the telephone number, fax number, and mailing address of the mortgagee. No language, other than language substantially similar to the language prescribed in this subsection (c), shall be included in the notice. Notwithstanding any other provision to the contrary, the grace period notice required by this subsection (c) may be combined with a counseling notification required under federal law.
    The sending of the notice required under this subsection (c) means depositing or causing to be deposited into the United States mail an envelope with first‑class postage prepaid that contains the document to be delivered. The envelope shall be addressed to the mortgagor at the common address of the residential real estate securing the mortgage.
    (d) Until 30 days after mailing the notice provided for under subsection (c) of this Section, no legal action shall be instituted under Part 15 of Article XV of the Code of Civil Procedure.
    (e) If, within the 30‑day period provided under subsection (d) of this Section, an approved counseling agency provides written notice to the mortgagee that the mortgagor is seeking approved counseling services, then no legal action under Part 15 of Article XV of the Code of Civil Procedure shall be instituted for 30 days after the date of that notice. The date that such notice is sent shall be stated in the notice, and shall be sent to the address or fax number contained in the Grace Period Notice required under subsection (c) of this Section. During the 30‑day period provided under this subsection (e), the mortgagor or counselor or both may prepare and proffer to the mortgagee a proposed sustainable loan workout plan. The mortgagee will then determine whether to accept the proposed sustainable loan workout plan. If the mortgagee and the mortgagor agree to a sustainable loan workout plan, then no legal action under Part 15 of Article XV of the Code of Civil Procedure shall be instituted for as long as the sustainable loan workout plan is complied with by the mortgagor.
    The agreed sustainable loan workout plan and any modifications thereto must be in writing and signed by the mortgagee and the mortgagor.
    Upon written notice to the mortgagee, the mortgagor may change approved counseling agencies, but such a change does not entitle the mortgagor to any additional period of forbearance.
    (f) If the mortgagor fails to comply with the sustainable loan workout plan, then nothing in this Section shall be construed to impair the legal rights of the mortgagee to enforce the contract.
    (g) A counselor employed by a housing counseling agency or the housing counseling agency that in good faith provides counseling shall not be liable to a mortgagee or mortgagor for civil damages, except for willful or wanton misconduct on the part of the counselor in providing the counseling.
    (h) There shall be no waiver of any provision of this Section.
    (i) It is the General Assembly's intent that compliance with this Section shall not prejudice a mortgagee in ratings of its bad debt collection or calculation standards or policies.
    (j) This Section shall not apply, or shall cease to apply, to residential real estate that is not occupied as a principal residence by the mortgagor.
    (k) This Section is repealed July 1, 2013.
(Source: P.A. 95‑1047, eff. 4‑6‑09; 96‑1419, eff. 10‑1‑10.)

    (735 ILCS 5/15‑1503)(from Ch. 110, par. 15‑1503)
    Sec. 15‑1503. Notice of Foreclosure.
    (a) A notice of foreclosure, whether the foreclosure is initiated by complaint or counterclaim, made in accordance with this Section and recorded in the county in which the mortgaged real estate is located shall be constructive notice of the pendency of the foreclosure to every person claiming an interest in or lien on the mortgaged real estate, whose interest or lien has not been recorded prior to the recording of such notice of foreclosure. Such notice of foreclosure must be executed by any party or any party's attorney and shall include (i) the names of all plaintiffs and the case number, (ii) the court in which the action was brought, (iii) the names of title holders of record, (iv) a legal description of the real estate sufficient to identify it with reasonable certainty, (v) a common address or description of the location of the real estate and (vi) identification of the mortgage sought to be foreclosed. An incorrect common address or description of the location, or an immaterial error in the identification of a plaintiff or title holder of record, shall not invalidate the lis pendens effect of the notice under this Section. A notice which complies with this Section shall be deemed to comply with Section 2‑1901 of the Code of Civil Procedure and shall have the same effect as a notice filed pursuant to that Section; however, a notice which complies with Section 2‑1901 shall not be constructive notice unless it also complies with the requirements of this Section.
    (b) With respect to residential real estate, a copy of the notice of foreclosure described in subsection (a) of Section 15‑1503 shall be sent by first class mail, postage prepaid, to the municipality within the boundary of which the mortgaged real estate is located, or to the county within the boundary of which the mortgaged real estate is located if the mortgaged real estate is located in an unincorporated territory. A municipality or county must clearly publish on its website a single address to which such notice shall be sent. If a municipality or county does not maintain a website, then the municipality or county must publicly post in its main office a single address to which such notice shall be sent. In the event that a municipality or county has not complied with the publication requirement in this subsection (b), then such notice to the municipality or county shall be provided pursuant to Section 2‑211 of the Code of Civil Procedure.
(Source: P.A. 96‑856, eff. 3‑1‑10.)

(735 ILCS 5/15‑1504) (from Ch. 110, par. 15‑1504)     Sec. 15‑1504. Pleadings and service.     (a) Form of Complaint. A foreclosure complaint may be in substantially the following form:         (1) Plaintiff files this complaint to foreclose the

mortgage (or other conveyance in the nature of a mortgage) (hereinafter called "mortgage") hereinafter described and joins the following person as defendants: (here insert names of all defendants).

(2) Attached as Exhibit "A" is a copy of the

mortgage and as Exhibit "B" is a copy of the note secured thereby.

(3) Information concerning mortgage:             (A) Nature of instrument: (here insert whether a

mortgage, trust deed or other instrument in the nature of a mortgage, etc.)

(B) Date of mortgage:             (C) Name of mortgagor:             (D) Name of mortgagee:             (E) Date and place of recording:             (F) Identification of recording: (here insert

book and page number or document number)

(G) Interest subject to the mortgage: (here

insert whether fee simple, estate for years, undivided interest, etc.)

(H) Amount of original indebtedness, including

subsequent advances made under the mortgage:

(I) Both the legal description of the mortgaged

real estate and the common address or other information sufficient to identify it with reasonable certainty:

(J) Statement as to defaults, including, but not

necessarily limited to, date of default, current unpaid principal balance, per diem interest accruing, and any further information concerning the default:

(K) Name of present owner of the real estate:             (L) Names of other persons who are joined as

defendants and whose interest in or lien on the mortgaged real estate is sought to be terminated:

(M) Names of defendants claimed to be personally

liable for deficiency, if any:

(N) Capacity in which plaintiff brings this

foreclosure (here indicate whether plaintiff is the legal holder of the indebtedness, a pledgee, an agent, the trustee under a trust deed or otherwise, as appropriate):

(O) Facts in support of redemption period

shorter than the longer of (i) 7 months from the date the mortgagor or, if more than one, all the mortgagors (I) have been served with summons or by publication or (II) have otherwise submitted to the jurisdiction of the court, or (ii) 3 months from the entry of the judgment of foreclosure, if sought (here indicate whether based upon the real estate not being residential, abandonment, or real estate value less than 90% of amount owed, etc.):

(P) Statement that the right of redemption has

been waived by all owners of redemption, if applicable:

(Q) Facts in support of request for attorneys'

fees and of costs and expenses, if applicable:

(R) Facts in support of a request for

appointment of mortgagee in possession or for appointment of receiver, and identity of such receiver, if sought:

(S) Offer to mortgagor in accordance with

Section 15‑1402 to accept title to the real estate in satisfaction of all indebtedness and obligations secured by the mortgage without judicial sale, if sought:

(T) Name or names of defendants whose right to

possess the mortgaged real estate, after the confirmation of a foreclosure sale, is sought to be terminated and, if not elsewhere stated, the facts in support thereof:

REQUEST FOR RELIEF     Plaintiff requests:         (i) A judgment of foreclosure and sale.         (ii) An order granting a shortened redemption

period, if sought.

(iii) A personal judgment for a deficiency, if

sought.

(iv) An order granting possession, if sought.         (v) An order placing the mortgagee in possession or

appointing a receiver, if sought.

(vi) A judgment for attorneys' fees, costs and

expenses, if sought.

(b) Required Information. A foreclosure complaint need contain only such statements and requests called for by the form set forth in subsection (a) of Section 15‑1504 as may be appropriate for the relief sought. Such complaint may be filed as a counterclaim, may be joined with other counts or may include in the same count additional matters or a request for any additional relief permitted by Article II of the Code of Civil Procedure.     (c) Allegations. The statements contained in a complaint in the form set forth in subsection (a) of Section 15‑1504 are deemed and construed to include allegations as follows:         (1) on the date indicated the obligor of the

indebtedness or other obligations secured by the mortgage was justly indebted in the amount of the indicated original indebtedness to the original mortgagee or payee of the mortgage note;

(2) that the exhibits attached are true and correct

copies of the mortgage and note and are incorporated and made a part of the complaint by express reference;

(3) that the mortgagor was at the date indicated an

owner of the interest in the real estate described in the complaint and that as of that date made, executed and delivered the mortgage as security for the note or other obligations;

(4) that the mortgage was recorded in the county in

which the mortgaged real estate is located, on the date indicated, in the book and page or as the document number indicated;

(5) that defaults occurred as indicated;         (6) that at the time of the filing of the complaint

the persons named as present owners are the owners of the indicated interests in and to the real estate described;

(7) that the mortgage constitutes a valid, prior and

paramount lien upon the indicated interest in the mortgaged real estate, which lien is prior and superior to the right, title, interest, claim or lien of all parties and nonrecord claimants whose interests in the mortgaged real estate are sought to be terminated;

(8) that by reason of the defaults alleged, if the

indebtedness has not matured by its terms, the same has become due by the exercise, by the plaintiff or other persons having such power, of a right or power to declare immediately due and payable the whole of all indebtedness secured by the mortgage;

(9) that any and all notices of default or election

to declare the indebtedness due and payable or other notices required to be given have been duly and properly given;

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