Friday, March 15, 2013

New Illinois Supreme Court Rules Relating to Mortgage Foreclosure Cases

On April 11, 2011, the Illinois Supreme Court created the Special Supreme Court Committee on Mortgage Foreclosures and charged it with the following tasks: investigating the procedures used throughout the State of Illinois in mortgage foreclosure proceedings; studying relevant Illinois Supreme Court Rules and local rules that directly or indirectly affect such proceedings; analyzing the procedures adopted in other states in response to the unprecedented number of foreclosure filings nationwide; and reviewing legislative proposals pending in the Illinois General Assembly that may impact the mortgage foreclosure rules for the state. To meet this charge, the Committee established subcommittees, one of which was the Practice and Procedures Subcommittee. The Practice and Procedures Subcommittee submitted proposals for changes to the practice and procedures for mortgage foreclosure cases for discussion at a public hearing held on April 27, 2012. After consideration of comments and discussion at the public hearing, the Committee proposed new rules governing mortgage foreclosure practice and procedure in Illinois.

This article will highlight those sections of the new Rules that deal with the foreclosure of residential properties in Illinois.  More specifically, information that is helpful and relevant to homeowners who are defendants in foreclosure in Illinois.

RULE 113: Practice and Procedure in Mortgage Foreclosure cases

To read the complete rule follow this link

This rule relates to the documents that are required in order to support a mortgage foreclosure case filed in Illinois.  It is meant to supplement current existing Illinois Law.

The first part of the rule provides a "Form Prove-up Affidavit" which is an example of the affidavit that foreclosing parties (banks) must attach in support of a judgment for foreclosure.  Most relevant here is that it required that the signature page (which is to be signed by a bank agent/representative) must not be standalone.  Furthermore, this rule lays out all of the minimum requirements of a prove-up affidavit.  This forces the foreclosing party to substantiate and support the records and figures used against the defendant-homeowner.  This includes laying a proper foundation for any computer records that were used while creating the affidavit.  It goes on to clearly state the amounts that are being claimed as due or past due and owed by the homeowner.

The next part of this rule deals with default judgments.  A default judgment is where a plaintiff (here the bank) obtains a judgment (of foreclosure) against a defendant in the defendant's absence.  This is usually because the defendant failed to appear in court or hire an attorney.  In Illinois and especially Cook County, it is very common for a lender to foreclose by default and obtain judgments against absentee homeowners.  Part (d) of Rule 113 requires that the Circuit Court Clerk shall mail copies of any default judgments to the property address of the homeowner.  It is important to note that this notice is only mailed out AFTER the default judgment has been entered.  The entry of a judgment is a pivotal step in a foreclosure case and should not be taken lightly.

The next relevant section for purposes of this article is section (f) of Rule 113.  This section deals with judicial sales of foreclosed properties.  After a judgment of foreclosure has entered, the bank typically proceeds to a judicial sale (informal auction - usually held in an office building downtown).  This usually happens about 3 months after the judgment.  Section (f) requires that notice of this sale be sent to all defendants at least 10 days before the sale is to occur.  This notice shall include the date, time and location of the sale.

The remaining sections of rule 113 are not relevant to this article but the full text can be found at the link above.

RULE 114: Loss Mitigation Affidavit

This rule, is in my opinion, the best new rule to be adopted relating to mortgage foreclosures period.  Part (a) of this Rule reads as follows:

(a) Loss Mitigation. For all actions filed under the Illinois Mortgage Foreclosure Law, and where a mortgagor has appeared or filed an answer or other responsive pleading, Plaintiff must, prior to moving for a judgment of foreclosure, comply with the requirements of any loss mitigation program which applies to the subject mortgage loan.

This means that it is now a Supreme Court Rule in Illinois for banks to comply with loss mitigation efforts.  Furthermore, the bank is required to complete and file with the court, and affidavit which verifies what loss mitigation steps were taken.  A form affidavit is provided in the text of the Rule.

Section (d) of this rule provides the teeth for the homeowner:

 (d) EnforcementThe court may, either sua sponte or upon motion of a mortgagor, stay the proceedings or deny entry of a foreclosure judgment if Plaintiff fails to comply with the requirements of this rule.

This means that court may, on its own, or at the request of the homeowner, stay the foreclosure case if the bank is not in compliance with this rule.  Stop the case!


These new rules are great victories for justice and fairness in the foreclosure process in Illinois.  There is still disagreement among some of my colleagues as to the effectiveness (or should I say potential effectiveness) of these rules, but for now they look like strong consumer protection provisions.  The Supreme Court recently pushed back the effective date of these rules to May 1, 2013 in order to better assess applicability.  Even still, they should be going live on that date.  

I applaud the work of the Illinois Supreme Court and the work done by the committee relating to these rules.  It is a tribute to Illinois homeowners and another historic milestone on the road to recovery for the American family.