97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5001

 

Introduced 2/7/2012, by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
735 ILCS 5/15-1503  from Ch. 110, par. 15-1503
735 ILCS 5/15-1508  from Ch. 110, par. 15-1508

    Amends provisions of the Code of Civil Procedure requiring a copy of a notice of foreclosure of residential real estate or a copy of a confirmation order after a confirmation of sale of residential real estate following a foreclosure to be sent by a party seeking foreclosure to the municipality or county where the mortgaged real estate is located and to the known insurers. Provides that if the municipality or county has not posted an address to which the notice of foreclosure or copy of a confirmation order must be sent, the notice of foreclosure or copy of a confirmation order must be sent to the chairperson of the county board or county clerk, mayor or city clerk, president of the board of trustees or village clerk, or president or town clerk (rather than sent in accordance with specified provisions of the Code). If the real estate is located in a city with a population of more than 2,000,000, also requires a notice of foreclosure or copy of a confirmation order to be sent to the city clerk, requires an affidavit attesting that the notice of foreclosure or copy of a confirmation order was sent, requires the city clerk to send a copy of a notice of foreclosure to the alderman for the ward in which the real estate is located, provides for dismissal of a complaint or counterclaim without prejudice if the requirements regarding a notice of foreclosure are not met, and adds notice requirements when a party refiles the complaint or counterclaim after a dismissal. Makes other changes.


LRB097 17635 AJO 65243 b

 

 

A BILL FOR

 

HB5001LRB097 17635 AJO 65243 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Code of Civil Procedure is amended by
5changing Sections 15-1503 and 15-1508 as follows:
 
6    (735 ILCS 5/15-1503)  (from Ch. 110, par. 15-1503)
7    Sec. 15-1503. Notice of Foreclosure.
8    (a) A notice of foreclosure, whether the foreclosure is
9initiated by complaint or counterclaim, made in accordance with
10this Section and recorded in the county in which the mortgaged
11real estate is located shall be constructive notice of the
12pendency of the foreclosure to every person claiming an
13interest in or lien on the mortgaged real estate, whose
14interest or lien has not been recorded prior to the recording
15of such notice of foreclosure. Such notice of foreclosure must
16be executed by any party or any party's attorney and shall
17include (i) the names of all plaintiffs and the case number,
18(ii) the court in which the action was brought, (iii) the names
19of title holders of record, (iv) a legal description of the
20real estate sufficient to identify it with reasonable
21certainty, (v) a common address or description of the location
22of the real estate and (vi) identification of the mortgage
23sought to be foreclosed. An incorrect common address or

 

 

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1description of the location, or an immaterial error in the
2identification of a plaintiff or title holder of record, shall
3not invalidate the lis pendens effect of the notice under this
4Section. A notice which complies with this Section shall be
5deemed to comply with Section 2-1901 of the Code of Civil
6Procedure and shall have the same effect as a notice filed
7pursuant to that Section; however, a notice which complies with
8Section 2-1901 shall not be constructive notice unless it also
9complies with the requirements of this Section.
10    (b) With respect to residential real estate, a copy of the
11notice of foreclosure described in subsection (a) of Section
1215-1503 shall be sent by first class mail, postage prepaid, to
13the municipality within the boundary of which the mortgaged
14real estate is located, or to the county within the boundary of
15which the mortgaged real estate is located if the mortgaged
16real estate is located in an unincorporated territory. A
17municipality or county must clearly publish on its website a
18single address to which such notice shall be sent. If a
19municipality or county does not maintain a website, then the
20municipality or county must publicly post in its main office a
21single address to which such notice shall be sent. In the event
22that a municipality or county has not complied with the
23publication requirement in this subsection (b), then the copy
24of the such notice to the municipality or county shall be sent
25by first class mail to the chairperson of the county board or
26county clerk in the case of a county, to the mayor or city

 

 

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1clerk in the case of a city, to the president of the board of
2trustees or village clerk in the case of a village, or to the
3president or town clerk in the case of a town provided pursuant
4to Section 2-211 of the Code of Civil Procedure. Additionally,
5if the real estate is located in a city with a population of
6more than 2,000,000, regardless of whether that city has
7complied with the publication requirement in this subsection
8(b), the party must, within 3 days after filing the complaint
9or counterclaim: (i) send a copy of the notice of foreclosure
10to the city clerk and (ii) file an affidavit with the court
11attesting to the fact that the notice was sent to the city
12clerk. Within 5 days after receipt of a notice of foreclosure,
13the city clerk shall send a copy of the notice to the alderman
14for the ward in which the real estate is located. The failure
15to send a copy of the notice to the city clerk or to file an
16affidavit within 3 days as required results in the dismissal
17without prejudice of the complaint or counterclaim on a motion
18of a party or the court. If, after the complaint or
19counterclaim has been dismissed without prejudice, the party
20refiles the complaint or counterclaim, then the party must
21again meet the requirements that the party send the notice to
22the city clerk within 3 days and file an affidavit within 3
23days attesting to the fact that the notice was sent as
24required. In that instance, the city clerk shall send a copy of
25the notice to the appropriate alderman within 5 days.
26(Source: P.A. 96-856, eff. 3-1-10.)
 

 

 

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1    (735 ILCS 5/15-1508)  (from Ch. 110, par. 15-1508)
2    Sec. 15-1508. Report of Sale and Confirmation of Sale.
3    (a) Report. The person conducting the sale shall promptly
4make a report to the court, which report shall include a copy
5of all receipts and, if any, certificate of sale.
6    (b) Hearing. Upon motion and notice in accordance with
7court rules applicable to motions generally, which motion shall
8not be made prior to sale, the court shall conduct a hearing to
9confirm the sale. Unless the court finds that (i) a notice
10required in accordance with subsection (c) of Section 15-1507
11or a notice to the city clerk required in accordance with
12subsection (b) of Section 15-1503 was not given, (ii) the terms
13of sale were unconscionable, (iii) the sale was conducted
14fraudulently, or (iv) justice was otherwise not done, the court
15shall then enter an order confirming the sale. The confirmation
16order shall include a name, address, and telephone number of
17the holder of the certificate of sale or deed issued pursuant
18to that certificate or, if no certificate or deed was issued,
19the purchaser, whom a municipality or county may contact with
20concerns about the real estate. The confirmation order may
21also:
22        (1) approve the mortgagee's fees and costs arising
23    between the entry of the judgment of foreclosure and the
24    confirmation hearing, those costs and fees to be allowable
25    to the same extent as provided in the note and mortgage and

 

 

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1    in Section 15-1504;
2        (2) provide for a personal judgment against any party
3    for a deficiency; and
4        (3) determine the priority of the judgments of parties
5    who deferred proving the priority pursuant to subsection
6    (h) of Section 15-1506, but the court shall not defer
7    confirming the sale pending the determination of such
8    priority.
9    (b-5) Notice with respect to residential real estate. With
10respect to residential real estate, the notice required under
11subsection (b) of this Section shall be sent to the mortgagor
12even if the mortgagor has previously been held in default. In
13the event the mortgagor has filed an appearance, the notice
14shall be sent to the address indicated on the appearance. In
15all other cases, the notice shall be sent to the mortgagor at
16the common address of the foreclosed property. The notice shall
17be sent by first class mail. Unless the right to possession has
18been previously terminated by the court, the notice shall
19include the following language in 12-point boldface
20capitalized type:
21
IF YOU ARE THE MORTGAGOR (HOMEOWNER), YOU HAVE THE RIGHT TO
22
REMAIN IN POSSESSION FOR 30 DAYS AFTER ENTRY OF AN ORDER OF
23
POSSESSION, IN ACCORDANCE WITH SECTION 15-1701(c) OF THE
24
ILLINOIS MORTGAGE FORECLOSURE LAW.
25    (b-10) Notice of confirmation order sent to municipality or
26county. With respect to residential real estate, a A copy of

 

 

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1the confirmation order required under subsection (b) shall be
2sent by first class mail, postage prepaid, to the municipality
3in which the foreclosed property is located, or to the county
4within the boundary of which the foreclosed property is located
5if the foreclosed property is located in an unincorporated
6territory. A municipality or county must clearly publish on its
7website a single address to which such order notice shall be
8sent. If a municipality or county does not maintain a website,
9then the municipality or county must publicly post in its main
10office a single address to which such order notice shall be
11sent. In the event that a municipality or county has not
12complied with the publication requirement in this subsection
13(b-10), then the copy of the order such notice to the
14municipality or county shall be sent by first class mail to the
15chairperson of the county board or county clerk in the case of
16a county, to the mayor or city clerk in the case of a city, to
17the president of the board of trustees or village clerk in the
18case of a village, or to the president or town clerk in the
19case of a town provided pursuant to Section 2-211 of the Code
20of Civil Procedure. Additionally, if the real estate is located
21in a city with a population of more than 2,000,000, regardless
22of whether that city has complied with the publication
23requirement in this subsection (b-10), the party filing the
24complaint or counterclaim must, within 3 days after the entry
25of the confirmation order: (i) send a copy of the confirmation
26order to the city clerk and (ii) file an affidavit attesting to

 

 

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1the fact that a copy of the confirmation order was sent to the
2city clerk. Within 5 days after receipt of a confirmation
3order, the city clerk shall send a copy of the confirmation
4order to the alderman for the ward in which the real estate is
5located.
6    (b-15) Notice of confirmation order sent to known insurers.
7With respect to residential real estate, the party filing the
8complaint shall send a copy of the confirmation order required
9under subsection (b) by first class mail, postage prepaid, to
10the last-known property insurer of the foreclosed property.
11Failure to send or receive a copy of the order shall not impair
12or abrogate in any way the rights of the mortgagee or purchaser
13or affect the status of the foreclosure proceedings.
14    (c) Failure to Give Notice. If any sale is held without
15compliance with subsection (c) of Section 15-1507 of this
16Article, any party entitled to the notice provided for in
17paragraph (3) of that subsection (c) who was not so notified
18may, by motion supported by affidavit made prior to
19confirmation of such sale, ask the court which entered the
20judgment to set aside the sale. Any such party shall guarantee
21or secure by bond a bid equal to the successful bid at the
22prior sale, unless the party seeking to set aside the sale is
23the mortgagor, the real estate sold at the sale is residential
24real estate, and the mortgagor occupies the residential real
25estate at the time the motion is filed. In that event, no
26guarantee or bond shall be required of the mortgagor. Any

 

 

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1subsequent sale is subject to the same notice requirement as
2the original sale.
3    (d) Validity of Sale. Except as provided in subsection (c)
4of Section 15-1508, no sale under this Article shall be held
5invalid or be set aside because of any defect in the notice
6thereof or in the publication of the same, or in the
7proceedings of the officer conducting the sale, except upon
8good cause shown in a hearing pursuant to subsection (b) of
9Section 15-1508. At any time after a sale has occurred, any
10party entitled to notice under paragraph (3) of subsection (c)
11of Section 15-1507 may recover from the mortgagee any damages
12caused by the mortgagee's failure to comply with such paragraph
13(3). Any party who recovers damages in a judicial proceeding
14brought under this subsection may also recover from the
15mortgagee the reasonable expenses of litigation, including
16reasonable attorney's fees.
17    (d-5) Making Home Affordable Program. The court that
18entered the judgment shall set aside a sale held pursuant to
19Section 15-1507, upon motion of the mortgagor at any time prior
20to the confirmation of the sale, if the mortgagor proves by a
21preponderance of the evidence that (i) the mortgagor has
22applied for assistance under the Making Home Affordable Program
23established by the United States Department of the Treasury
24pursuant to the Emergency Economic Stabilization Act of 2008,
25as amended by the American Recovery and Reinvestment Act of
262009, and (ii) the mortgaged real estate was sold in material

 

 

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1violation of the program's requirements for proceeding to a
2judicial sale. The provisions of this subsection (d-5), except
3for this sentence, shall become inoperative on January 1, 2013
4for all actions filed under this Article after December 31,
52012, in which the mortgagor did not apply for assistance under
6the Making Home Affordable Program on or before December 31,
72012.
8    (e) Deficiency Judgment. In any order confirming a sale
9pursuant to the judgment of foreclosure, the court shall also
10enter a personal judgment for deficiency against any party (i)
11if otherwise authorized and (ii) to the extent requested in the
12complaint and proven upon presentation of the report of sale in
13accordance with Section 15-1508. Except as otherwise provided
14in this Article, a judgment may be entered for any balance of
15money that may be found due to the plaintiff, over and above
16the proceeds of the sale or sales, and enforcement may be had
17for the collection of such balance, the same as when the
18judgment is solely for the payment of money. Such judgment may
19be entered, or enforcement had, only in cases where personal
20service has been had upon the persons personally liable for the
21mortgage indebtedness, unless they have entered their
22appearance in the foreclosure action.
23    (f) Satisfaction. Upon confirmation of the sale, the
24judgment stands satisfied to the extent of the sale price less
25expenses and costs. If the order confirming the sale includes a
26deficiency judgment, the judgment shall become a lien in the

 

 

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1manner of any other judgment for the payment of money.
2    (g) The order confirming the sale shall include,
3notwithstanding any previous orders awarding possession during
4the pendency of the foreclosure, an award to the purchaser of
5possession of the mortgaged real estate, as of the date 30 days
6after the entry of the order, against the parties to the
7foreclosure whose interests have been terminated.
8    An order of possession authorizing the removal of a person
9from possession of the mortgaged real estate shall be entered
10and enforced only against those persons personally named as
11individuals in the complaint or the petition under subsection
12(h) of Section 15-1701 and in the order of possession and shall
13not be entered and enforced against any person who is only
14generically described as an unknown owner or nonrecord claimant
15or by another generic designation in the complaint.
16    Notwithstanding the preceding paragraph, the failure to
17personally name, include, or seek an award of possession of the
18mortgaged real estate against a person in the confirmation
19order shall not abrogate any right that the purchaser may have
20to possession of the mortgaged real estate and to maintain a
21proceeding against that person for possession under Article 9
22of this Code or subsection (h) of Section 15-1701; and
23possession against a person who (1) has not been personally
24named as a party to the foreclosure and (2) has not been
25provided an opportunity to be heard in the foreclosure
26proceeding may be sought only by maintaining a proceeding under

 

 

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1Article 9 of this Code or subsection (h) of Section 15-1701.
2    (h) With respect to mortgaged real estate containing 5 or
3more dwelling units, the order confirming the sale shall also
4provide that (i) the mortgagor shall transfer to the purchaser
5the security deposits, if any, that the mortgagor received to
6secure payment of rent or to compensate for damage to the
7mortgaged real estate from any current occupant of a dwelling
8unit of the mortgaged real estate, as well as any statutory
9interest that has not been paid to the occupant, and (ii) the
10mortgagor shall provide an accounting of the security deposits
11that are transferred, including the name and address of each
12occupant for whom the mortgagor holds the deposit and the
13amount of the deposit and any statutory interest.
14(Source: P.A. 96-265, eff. 8-11-09; 96-856, eff. 3-1-10;
1596-1245, eff. 7-23-10; 97-333, eff. 8-12-11; 97-575, eff.
168-26-11.)