March 11, 2013
by Lee Perres
Fisher and Shapiro, LLC – USFN Member (Illinois)
The author’s recent article on SB16 and amendments to the Illinois Mortgage Foreclosure Law (IMFL), 735 ILCS 5/15-1101, et seq. can be accessed here.
The Illinois Supreme Court has issued new rules affecting foreclosures in Illinois under an order filed February 22, 2013 (and revised February 28, 2013) and designated M.R. 3140. It is anticipated that these new rules will cause numerous delays in the foreclosure process, especially related to entering judgments. Further information regarding Supreme Court Rules 99.1, 113, and 114 can be found on the Illinois courts’ website here.
Supreme Court Rule 99.1 – Mediation (effective March 1, 2013)
The court allows each judicial district in Illinois to establish a mediation program, provided that the program complies with the following mandatory requirements: “Based on the plan established pursuant to paragraph (c), the local circuit rules shall address
- the requirements set forth in Rule 99;
- resources to provide meaningful access to HUD-certified housing counseling services for eligible homeowners;
- resources to provide meaningful access to pro bono legal representation for eligible homeowners;
- resources to provide meaningful language access for program participants;
- any costs charged to any participant in the mortgage foreclosure case;
- a sustainability plan that includes a long-term funding plan; and
- training of judges, key court personnel and volunteers on mortgage foreclosure mediation.”
Supreme Court Rule 113 – Practice and Procedure in Mortgage Foreclosure Cases (effective May 1, 2013)
This rule expressly states that it supplements, and does not replace, the IMFL. Rule 113 makes it a requirement that the most current and complete note be attached to the complaint. The rule states, “a copy of the note, as it currently exists, including all indorsements and allonges, shall be attached to the mortgage foreclosure complaint at the time of filing.”
Rule 113 creates a model judgment affidavit that contains specific content requirements. While the court has not specifically stated that use of the affidavit form provided in the rule is a “safe harbor,” defendants will be hard pressed to attack the Supreme Court’s form, and it would be wise to use it as the basis of any new form.
Rule 113 requires that a payment history be attached to each prove-up affidavit “in only those cases where the defendant(s) have filed an appearance or responsive pleading to the complaint for foreclosure.” The affidavits cannot have a stand-alone signature page, consistent with current practice.
When a default order is entered in court, a notice of default and entry of judgment of foreclosure (and appropriate copies) shall be prepared by the attorney for the plaintiff and delivered to the clerk within two business days after the entry of default. The clerk must mail these copies “to the property address or the address on any appearances or other documents filed by any defendant.” The rule designates the form to be used for this notice. Curiously, the failure to send this notice will not affect the validity of the default order, the judgment of foreclosure, or any other orders entered.
A notice of sale is required to be sent to all defendants, whether or not they have been defaulted, no fewer than 10 business days before the sale.
Rule 113 specifically states that the plaintiff may use a private selling officer appointed pursuant to the IMFL. There is a hope that the courts will allow firms to stop using the sheriff in counties where the sheriff is not capable of proceeding promptly, but this will need to be carefully evaluated to avoid “political” pushback from the courts.
If a foreclosure sale results in a surplus, the attorney for the plaintiff must send a special notice to the mortgagors advising them of the surplus, along with the forms necessary for the mortgagors to apply for the surplus funds.
Finally, Rule 113 “codifies” the necessity for the appointment of a special representative in the case of a deceased mortgagor.
Supreme Court Rule 114 – Loss Mitigation Affidavit (effective May 1, 2013)
“Where a mortgagor has filed an appearance, answer, or any other responsive pleading, the plaintiff must, prior to moving for a judgment of foreclosure, comply with any loss mitigation program which applies to the subject mortgage loan.” The footnote to this section suggests that such “loss mitigation programs” include any federal programs (HAMP, the attorney generals’ settlement, and FHA, VA, or USDA programs) and any “in-house” programs the servicer might “regularly provide for mortgage loans of this type.” Prior to or at the time of moving for judgment, the plaintiff must submit an affidavit specifying:
- any type of loss mitigation that applies to the subject mortgage;
- the steps taken to offer said type of loss mitigation to the mortgagor(s), and
- the status of any such loss mitigation efforts.
Rule 114 provides the form of loss mitigation affidavit to comply with the requirements. The court may, upon a motion of a mortgagor or on the court’s own motion, stay the proceedings or deny entry of judgment for failure to comply with Rule 114.
The ramifications of these new rules are still being digested as feedback from judges on how they will handle affidavits currently in the pipeline is received. This author has been advised by a number of judges that because the rule is procedural, the courts will not accept existing, non-compliant affidavits and will require the loss mitigation affidavits effective May 1, 2013.
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