Illinois Foreclosure Laws



How are mortgage liens treated in Illinois?

Illinois is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage. Power of sale foreclosures are not permitted in Illinois.


How are Illinois mortgages foreclosed?

In Illinois, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. The court with jurisdiction over a foreclosure is known as the Circuit Court. In Illinois, the Circuit Courts are broken down by county, and the Chancery Division handles foreclosures. A complaint is filed in Circuit Court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

In Illinois, a party can offer a Deed in lieu of foreclosure, which effectively deeds the property back to the lender. There can be no deficiency judgment if the lender accepts a Deed in lieu of foreclosure.

If legal action has already ensued, the property owner can request a Consent Foreclosure, which shortens the foreclosure process, and based on judicial discretion, will further prevent a deficiency judgment, although the property owner may be liable for court costs and attorney fees.


What are the legal instruments that establish a Illinois mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement. A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.


How long does it take to foreclose a property in Illinois?

Depending on the court schedule, it usually takes approximately 215 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. Property owners have a right to reinstate a defaulted mortgage within ninety (90) days of the personal service of the foreclosure complaint. Property owners have thirty (30) days after the foreclosure sale is confirmed to retain possession and occupancy of the property at the expiration of which they must vacate.


Is there a right of redemption in Illinois?

Illinois does not have a post-foreclosure sale statutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. On residential properties, there is a seven (7) month right of redemption from either the time the foreclosure complaint is filed or three (3) months form the time a final judgment of foreclosure is entered. A foreclosure sale cannot occur until these time periods expire. Reinstatement and redemption rights can only be exercised once every five (5) years.


Are deficiency judgments permitted in Illinois?

Yes, a deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. Deficiency judgments are not permitted in cases of Consent Foreclosure or a Deed in lieu of foreclosure.


What statutes govern Illinois foreclosures?

The laws that govern Illinois foreclosures are found in 735 ILCS 5/Art XV.


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