SB2730 98TH GENERAL ASSEMBLY

LRB098 17569 HEP 52678 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB2730

Introduced 1/28/2014, by Sen. John G. Mulroe

SYNOPSIS AS INTRODUCED:

735 ILCS 5/15-1603.5 new

Amends the Mortgage Foreclosure Article of the Code of Civil Procedure. Defines "omitted subordinate interest". Provides that certain persons holding real estate encumbered by an omitted subordinate interest may file a strict foreclosure complaint consisting substantially of certain specified information. Provides that subject to the objection of the defendant, the court shall enter a judgment extinguishing the omitted subordinate interest by vesting absolute title to the mortgaged real estate in the plaintiff. Provides procedures by which a holder of an omitted subordinate interest may redeem the interest. Provides that a person whose omitted subordinate interest was not terminated by a prior foreclosure action does not have a right to file a strict foreclosure action. Effective immediately.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Code of Civil Procedure is amended by adding Section 15-1603.5 as follows:

(735 ILCS 5/15-1603.5 new)

Sec. 15-1603.5. Strict foreclosure of an omitted subordinate interest.

(a) As used in this Section, "omitted subordinate interest" means a recorded subordinate interest in real estate where:

(1) the real estate is the subject of a foreclosure action under this Article;

(2) a motion to confirm judicial sale under subsection (b) of Section 15-1508 is either pending or has been granted;

(3) the interest attached to the real estate prior to the filing or recording of any notice in accordance with Sections 2-1901 and 15-1503; and

(4) the interest was not named in the foreclosure complaint.

(b) The holder of the certificate of sale or any person who acquired title pursuant to Section 15-1509 or any subsequent successor, assignee, transferee, or grantee who discovers an omitted subordinate interest may file a strict foreclosure complaint. A complaint filed under this Section must include substantially the following:

(1) the identity of the plaintiff and how the plaintiff acquired its interest in the property which is the subject of the strict foreclosure;

(2) the docket number of the prior foreclosure action and the recording number and date of the mortgage that was previously foreclosed;

(3) the legal description, common address, and parcel identification number of the real estate which is the subject of the strict foreclosure;

(4) the recording number and a copy of the recorded omitted subordinate interest holder to be named as the defendant;

(5) the amount of the successful bid at the foreclosure sale, as stated in the report of sale in the prior foreclosure action, with a copy of the report of sale attached to the complaint;

(6) an allegation that, due to inadvertence or mistake or such other reason as may be applicable, the omitted subordinate interest was not made a party defendant in the prior foreclosure action and the omitted subordinate interest was not terminated by the judgment of foreclosure and when the subject property was sold by judicial sale; and

(7) a request for relief setting forth the redemption period as provided in this Section and identifying a contact by name and telephone number who will accept tender of the redemption amount.

(c) Subject to the objection of the defendant, the court shall enter a judgment extinguishing the omitted subordinate interest by vesting absolute title to the mortgaged real estate in the plaintiff, free and clear of all claims and liens (except liens of the United States of America that cannot be foreclosed without judicial sale).

(d) If the defendant objects to the entry of the judgment, the court, after a hearing, shall enter an order providing either:

(1) that good cause for the objection has not been shown by the defendant and the defendant has not agreed to pay the amount required to redeem, in which event the court shall proceed to enter the judgment; or

(2) that good cause for the objection has been shown by the defendant and the defendant has agreed to pay the amount required to redeem.

(e) The amount required to redeem shall be the sum bid at the prior foreclosure sale plus any costs and fees incurred subsequent to the sale for the payment of taxes, preservation of the property, or any other actions taken by the holder of the certificate of sale to protect its interest in the property.

The order shall state that upon payment of the redemption amount within the redemption period, which shall extend 30 days after the entry of the order, title to the real estate shall vest in the defendant who redeems pursuant to this Section. Title to the defendant shall be free and clear of all claims and liens (except liens of the United States of America that cannot be foreclosed without judicial sale). If the defendant subject to the order has not paid the amount required to redeem within the 30-day redemption period, the interest of the defendant in the property is terminated.

(f) A person whose omitted subordinate interest was not terminated by a prior foreclosure action does not have a right to file a strict foreclosure action.

Section 99. Effective date. This Act takes effect upon becoming law.