Page 23 - John Hundley 2008

Sharp Thinking

No. 14 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. November 2008
“Foreclosure Crisis” Prompts Legislature

To Amend Illinois Mortgage Law 4 Times

By Mandy Combs, Mcombs@lotsharp.com, 618-242-0246

Within a period of just 367 days, four new acts of the Illinois legislature
are changing the way mortgage foreclosures proceed in Illinois.
The amendments to the Illinois Mortgage Foreclosure Law (735 ILCS
5/15-1101 et seq.) (“IMFL”) respond to the so-called foreclosure crisis and, as
one senator stated, “are intended to help families stay in their homes by
making sure they understand and are able to exercise their rights under the
Illinois law while facing foreclosure”. Here is a summary of the recently-
enacted and impending procedural changes. Combs
Effective Jan. 1, 2008, P.A. 95-262 added a provision that where a tenant is current on rent the
order of possession in the foreclosure must allow him or her to retain possession for 120 days after
service of a notice of hearing on a supplemental petition for possession (or until expiration of the
lease if that is shorter). The tenant must continue to pay rent during the period.
Moreover, under P.A. 95-933, effective Aug. 26, 2008, if written notice of to whom and where
rent is to be paid was not provided and the tenant has made good-faith efforts to pay rent, the order
of possession must allow the tenant to retain possession until 120 days after service of a notice of
hearing on a supplemental petition for possession (or expiration of the lease if sooner). Additionally,
no mortgagee-in-possession, receiver, holder of a certificate of sale or deed, or purchaser who fails to
file a supplemental petition during the foreclosure action may file a forcible entry (eviction) action
against the tenant until 90 days after giving notice of intent to file such action. Also, court records
relating to supplemental petitions against tenants who are current on their rent may be sealed.

Under P.A. 95-826, effective Aug. 14, 2008, notice of the sale confirmation hearing on
“residential real estate” must be sent to the mortgagor even if he or she has been held in default. If
the mortgagor has filed an appearance, the notice shall be sent to the address on the appearance; in
other cases, it is to be sent to the common address of the property. Unless possession has already
been terminated by the court, the notice must advise owners that they have the right to remain in
possession for 30 days after entry of an order of possession.

And effective Jan. 1, 2009 P.A. 95-961 requires that a bilingual Homeowner Notice be attached
to summonses in new “residential foreclosure actions”. It must be in substantially the form set forth in
the statute, which gives notice that (1) lawful occupants of a home may live there until a judge enters
an order for possession; (2) owners continue to own the home until the court rules otherwise; (3)

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Sharp Thinking is an occasional newsletter of The Sharp Law Firm, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp
Thinking shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein
constitute educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal
advice on your particular situation, contact a Sharp lawyer at the phone number or one of the addresses provided on page 2 of this newsletter.