New Illinois Rules for Lenders Seeking Foreclosure

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Effective May 1, 2013, the Illinois Supreme Court adopted new procedural rules governing residential mortgage foreclosures. The new rules aim to promote fairness and help homeowners faced with losing their home.

New Supreme Court Rule 99.1 clarifies procedures and requirements in Circuit Courts (like Madison County) with mediation programs. Among other things, these programs must provide mortgagors with access to pro bono representation.

New Rule 113 makes it clear that Exhibits to the foreclosure complaint must not only include a copy of the Promissory Note but also all indorsements and allonges. Presumably, this requirement will minimize disputes with respect to the mortgagee’s standing, which have become common in the era of MERS and bundled mortgages.

Rule 113(c) also requires submission of a pre-judgment “prove-up” affidavit by a suitable employee of the mortgagee attesting, among other things, the amount due and the records relied on. In effect, the new Rule demands that prove-up affidavits lay the same foundation that would be required for admission of business records in evidence. No judgment will be entered without an affidavit in proper form.

If the mortgagor appears before entry of judgment, new Rule 114 requires the mortgagee to inform the court by affidavit (1) whether the mortgagor is eligible for any loss mitigation program; (2) what steps were taken to offer it; and (3) the status of any loss mitigation efforts. The affidavit must be submitted before judgment is entered. Non-compliance may result in denial of entry of judgment.

The new rules also strengthen post judgment notice requirements. If judgment is obtained by default, the Circuit Clerk is required to mail the mortgagor notice of what occurred. In addition, the mortgagee now must mail notice of a foreclosure sale to all defendants, even those who were previously defaulted.

Compliance with the new rules will be essential to avoid delay and needless expense in residential foreclosure cases. Please contact David Antognoli for more information.

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