Page 21 - John Hundley 2013

Mortgage Law Roundup

Sharp Thinking

No. 89 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. May 2013

Supreme Court Adopts New Foreclosure Rules

By John T. Hundley, jhundley@lotsharp.com, 618-242-0246

The Illinois Supreme Court has issued three new rules aimed at mitigating abuses and
uncertainty in mortgage foreclosures.

The new rules reflect the court’s concern over well-publicized deceptive practices at the national
and local levels and the significant impact the continuing flow of residential mortgage foreclosures is
having on Illinois citizens and communities, the court said.

Most of the new requirements are contained in new Supreme Court Rule 113, addressing
practice and procedure in foreclosure cases. For foreclosure cases filed on and after May 1, that
rule:

► Requires that in addition to documents required by the Illinois Mortgage Foreclosure Law
(“IMFL”), foreclosure complaints must have attached thereto “a copy of the note, as it currently exists,
including all indorsements and allonges” (attachments making indorsements). Committee comments
state that this provision does not require the attachment of all assignments, as would be helpful in
thwarting the “standing” challenges which have become common in foreclosure cases (see Sharp
Thinking No. 83 (Feb. 2013); No. 69 (Aug. 2012)).

► Requires submission of a prove-up affidavit in order to obtain the foreclosure judgment (even
in cases of default), sets strict requirements for the information it must contain, and generally prohibits
stand-alone signature pages. Committee comments demonstrate these reforms are designed to
thwart “robo-signing” as practiced at some major lenders.

► Requires plaintiff’s attorney to prepare and the clerk of court to mail a form notice of default
and judgment whenever the court enters a default judgment. However, the failure to send the notice
or defects therein shall not invalidate the order of default or foreclosure judgment.

► Requires that notice of the sale be sent to all defendants, including those in default, 10
business days before the sale. Existing practice permits notice as little as 7 calendar days before the
sale and exempts defendants who have defaulted.

► Enacts strict new procedures for handling the rare situation where the sale results in a
surplus. The provision requires notice to mortgagors and permits presentation of a form petition for
turnover by the mortgagor, a judgment creditor, or other junior lien holder.

► Provides for appointment of a special representative to stand in the place of a deceased
mortgagor where no probate estate has been opened for the decedent.

Also enacted were Rule 99.1, which deals with courts that have adopted foreclosure mediation
programs, and Rule 114, dealing with loss mitigation. Rule 114 sets forth a required form of Loss

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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
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