Alert February 19, 2013

Illinois Passes Law to Streamline Foreclosures on Abandoned Properties

Illinois amended its foreclosure procedure to allow a mortgagee to make a motion for expedited judgment and sale with respect to abandoned residential property—defined as residential real estate that "is not occupied by the owner or lawful occupant as a principal residence" or "contains an incomplete structure if the real estate is zoned for residential development, where the structure is empty or otherwise uninhabited and is in need of maintenance, repair, or securing"—and statutorily-defined conditions are met that indicate abandonment. On the mortgagee’s motion, the court will hold a hearing within 15 days, but not earlier than the time to answer the foreclosure complaint. If the court finds the property is abandoned, it must immediately proceed to trial on the foreclosure. The court cannot grant a motion for expedited treatment if the mortgagor, unknown owner or lawful occupant appears in the action and demonstrates the property is not abandoned. Similarly, the court is required to vacate its judgment if a mortgagor or lawful occupant appears in the action and demonstrates that the property is not abandoned prior to confirmation of the sale. The bill sets forth statutory notices that must be posted on the subject property prior to the court’s hearing on the mortgagee’s motion and the court’s hearing to confirm the sale.

The bill is effective June 1, 2013 and is intended to alleviate the impact that foreclosures and abandoned homes have on Illinois’ residents under its current foreclosure process, which can take almost two years. In addition to providing an expedited procedure for abandoned residential property, the bill also amends Illinois’ foreclosure procedures by, among other things, requiring that a foreclosure notice be provided to the alderman of the district where a property is situated in cities with a population in excess of 2,000,000, and imposing extra filing fees based on the number of foreclosures filed in a calendar year. The bill also clarifies that a mortgage’s validity is not impacted if the mortgage is not in the form prescribed by 765 Ill. Comp. Stat. 5/11.