97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB0174

 

Introduced 1/18/2011, by Rep. Mary E. Flowers

 

SYNOPSIS AS INTRODUCED:
 
735 ILCS 5/15-1401  from Ch. 110, par. 15-1401
735 ILCS 5/15-1402  from Ch. 110, par. 15-1402
735 ILCS 5/15-1506  from Ch. 110, par. 15-1506

    Amends the Code of Civil Procedure. In provisions concerning deeds in lieu of foreclosure, provides that a mortgagee must file an action to confirm the deed in lieu of foreclosure, prove by clear and convincing documentary evidence, other than by oral testimony or affidavit, that the party seeking a judgment to confirm the deed in lieu of foreclosure is the actual, legal mortgagee entitled to bring the action, and obtain a judgment confirming the deed that finds that the mortgagee is entitled to bring the action. In provisions concerning foreclosure by consent and provisions concerning the trial of a foreclosure, provides that a mortgagee must prove by clear and convincing documentary evidence, other than by oral testimony or affidavit, that the party seeking a judgment of foreclosure is the actual, legal mortgagee and is entitled to bring the foreclosure action. In provisions concerning the trial of a foreclosure, provides that where an allegation of fact in the complaint is not denied by a party's verified answer or verified counterclaim or where a party states or is deemed to have stated that it has no knowledge of the allegation sufficient to form a belief and attaches the required affidavit, a sworn verification of the complaint or a separate affidavit setting forth such fact is not sufficient evidence thereof against such party and further evidence of such fact shall be required (rather than that a sworn verification of the complaint or a separate affidavit setting forth such fact is sufficient evidence thereof against such party and further evidence of such fact shall not be required).


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A BILL FOR

 

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1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Code of Civil Procedure is amended by
5changing Sections 15-1401, 15-1402, and 15-1506 as follows:
 
6    (735 ILCS 5/15-1401)  (from Ch. 110, par. 15-1401)
7    Sec. 15-1401. Deed in Lieu of Foreclosure. The mortgagor
8and mortgagee may agree on a termination of the mortgagor's
9interest in the mortgaged real estate after a default by a
10mortgagor provided that the mortgagee must file an action to
11confirm the deed in lieu of foreclosure, prove by clear and
12convincing documentary evidence, other than by oral testimony
13or affidavit, in that action that the party seeking a judgment
14to confirm the deed in lieu of foreclosure is the actual, legal
15mortgagee entitled to bring the action, and obtain a judgment
16confirming the deed that finds that the mortgagee is entitled
17to bring the action. Any mortgagee or mortgagee's nominee may
18accept a deed from the mortgagor in lieu of foreclosure subject
19to any other claims or liens affecting the real estate.
20Acceptance of a deed in lieu of foreclosure shall relieve from
21personal liability all persons who may owe payment or the
22performance of other obligations secured by the mortgage,
23including guarantors of such indebtedness or obligations,

 

 

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1except to the extent a person agrees not to be relieved in an
2instrument executed contemporaneously. A deed in lieu of
3foreclosure, whether to the mortgagee or mortgagee's nominee,
4shall not effect a merger of the mortgagee's interest as
5mortgagee and the mortgagee's interest derived from the deed in
6lieu of foreclosure. The mere tender of an executed deed by the
7mortgagor or the recording of a deed by the mortgagor to the
8mortgagee shall not constitute acceptance by the mortgagee of a
9deed in lieu of foreclosure.
10(Source: P.A. 86-974.)
 
11    (735 ILCS 5/15-1402)  (from Ch. 110, par. 15-1402)
12    Sec. 15-1402. Consent Foreclosure.
13    (a) No Objection. In a foreclosure, the court shall enter a
14judgment satisfying the mortgage indebtedness by vesting
15absolute title to the mortgaged real estate in the mortgagee
16free and clear of all claims, liens (except liens of the United
17States of America which cannot be foreclosed without judicial
18sale) and interest of the mortgagor, including all rights of
19reinstatement and redemption, and of all rights of all other
20persons made parties in the foreclosure whose interests are
21subordinate to that of the mortgagee and all nonrecord
22claimants given notice in accordance with paragraph (2) of
23subsection (c) of Section 15-1502 provided that the party
24seeking the judgment must prove by clear and convincing
25documentary evidence, other than by oral testimony or

 

 

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1affidavit, that it is the actual, legal mortgagee and is
2entitled to bring the foreclosure action, if at any time before
3sale:
4        (1) the mortgagee offers, in connection with such a
5    judgment, to waive any and all rights to a personal
6    judgment for deficiency against the mortgagor and against
7    all other persons liable for the indebtedness or other
8    obligations secured by the mortgage;
9        (2) such offer is made either in the foreclosure
10    complaint or by motion upon notice to all parties not in
11    default;
12        (3) all mortgagors who then have an interest in the
13    mortgaged real estate, by answer to the complaint, response
14    to the motion or stipulation filed with the court expressly
15    consent to the entry of such judgment;
16        (4) no other party, by answer or by response to the
17    motion or stipulation, within the time allowed for such
18    answer or response, objects to the entry of such judgment;
19    and
20        (5) upon notice to all parties who have not previously
21    been found in default for failure to appear, answer or
22    otherwise plead.
23    (b) Objection. If any party other than a mortgagor who then
24has an interest in the mortgaged real estate objects to the
25entry of such judgment by consent, the court, after hearing,
26shall enter an order providing either:

 

 

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1        (1) that for good cause shown, the judgment by consent
2    shall not be allowed; or
3        (2) that, good cause not having been shown by the
4    objecting party and the objecting party not having agreed
5    to pay the amount required to redeem in accordance with
6    subsection (d) of Section 15-1603, title to the mortgaged
7    real estate be vested in the mortgagee as requested by the
8    mortgagee and consented to by the mortgagor; or
9        (3) determining the amount required to redeem in
10    accordance with subsection (d) of Section 15-1603, finding
11    that the objecting party (or, if more than one party so
12    objects, the objecting party who has the least priority)
13    has agreed to pay such amount and additional interest under
14    the mortgage accrued to the date of payment within 30 days
15    after entry of the order, and declaring that upon payment
16    of such amount within 30 days title to the mortgaged real
17    estate shall be vested in such objecting party. Title so
18    vested shall be free and clear of all claims, liens (except
19    liens of the United States of America which cannot be
20    foreclosed without judicial sale) and interest of the
21    mortgagor and of all rights of other persons made parties
22    in the foreclosure whose interests are subordinate to the
23    interest of the mortgagee and all nonrecord claimants given
24    notice in accordance with paragraph (2) of subsection (c)
25    of Section 15-1502. If any objecting party subject to such
26    an order has not paid the amount required to redeem in

 

 

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1    accordance with that order within the 30-day period, the
2    court (i) shall order that such title to the mortgaged real
3    estate shall vest in the objecting party next higher in
4    priority (and successively with respect to each other
5    objecting party in increasing order of such party's
6    priority), if any, upon that party's agreeing to pay within
7    30 days after the entry of such further order, such amount
8    as specified in the original order plus additional interest
9    under the terms of the mortgage accrued to the date of
10    payment, provided that such party pays such amount within
11    the 30-day period, and (ii) may order that the non-paying
12    objecting party pay costs, interest accrued between the
13    start of the preceding 30-day period and the later of the
14    date another objecting party makes the payment, if
15    applicable, or the date such period expired, and the
16    reasonable attorneys' fees incurred by all other parties on
17    account of that party's objection.
18    (c) Judgment. Any judgment entered pursuant to Section
1915-1402 shall recite the mortgagee's waiver of rights to a
20personal judgment for deficiency and shall bar the mortgagee
21from obtaining such a deficiency judgment against the mortgagor
22or any other person liable for the indebtedness or other
23obligations secured by the mortgage.
24(Source: P.A. 86-974.)
 
25    (735 ILCS 5/15-1506)  (from Ch. 110, par. 15-1506)

 

 

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1    Sec. 15-1506. Judgment. (a) Evidence. In the trial of a
2foreclosure, the evidence to support the allegations of the
3complaint shall be taken in open court, and notwithstanding any
4provision of this Article, the mortgagee must prove by clear
5and convincing documentary evidence, other than by oral
6testimony or affidavit, that the party seeking a judgment of
7foreclosure is the actual, legal mortgagee and is entitled to
8bring the foreclosure action, except:
9    (1) where an allegation of fact in the complaint is not
10denied by a party's verified answer or verified counterclaim,
11or where a party pursuant to subsection (b) of Section 2-610 of
12the Code of Civil Procedure states, or is deemed to have
13stated, in its pleading that it has no knowledge of such
14allegation sufficient to form a belief and attaches the
15required affidavit, a sworn verification of the complaint or a
16separate affidavit setting forth such fact is not sufficient
17evidence thereof against such party and no further evidence of
18such fact shall be required; and
19    (2) where all the allegations of fact in the complaint have
20been proved by verification of the complaint or affidavit, the
21court upon motion supported by an affidavit stating the amount
22which is due the mortgagee, shall enter a judgment of
23foreclosure as requested in the complaint.
24    (b) Instruments. In all cases the evidence of the
25indebtedness and the mortgage foreclosed shall be exhibited to
26the court and appropriately marked, and copies thereof shall be

 

 

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1filed with the court.
2    (c) Summary and Default Judgments. Nothing in this Section
315-1506 shall prevent a party from obtaining a summary or
4default judgment authorized by Article II of the Code of Civil
5Procedure.
6    (d) Notice of Entry of Default. When any judgment in a
7foreclosure is entered by default, notice of such judgment
8shall be given in accordance with Section 2-1302 of the Code of
9Civil Procedure.
10    (e) Matters Required in Judgment. A judgment of foreclosure
11shall include the last date for redemption and all rulings of
12the court entered with respect to each request for relief set
13forth in the complaint. The omission of the date for redemption
14shall not extend the time for redemption or impair the validity
15of the judgment.
16    (f) Special Matters in Judgment. Without limiting the
17general authority and powers of the court, special matters may
18be included in the judgment of foreclosure if sought by a party
19in the complaint or by separate motion. Such matters may
20include, without limitation:
21    (1) a manner of sale other than public auction;
22    (2) a sale by sealed bid;
23    (3) an official or other person who shall be the officer to
24conduct the sale other than the one customarily designated by
25the court;
26    (4) provisions for non-exclusive broker listings or

 

 

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1designating a duly licensed real estate broker nominated by one
2of the parties to exclusively list the real estate for sale;
3    (5) the fees or commissions to be paid out of the sale
4proceeds to the listing or other duly licensed broker, if any,
5who shall have procured the accepted bid;
6    (6) the fees to be paid out of the sale proceeds to an
7auctioneer, if any, who shall have been authorized to conduct a
8public auction sale;
9    (7) whether and in what manner and with what content signs
10shall be posted on the real estate;
11    (8) a particular time and place at which such bids shall be
12received;
13    (9) a particular newspaper or newspapers in which notice of
14sale shall be published;
15    (10) the format for the advertising of such sale, including
16the size, content and format of such advertising, and
17additional advertising of such sale;
18    (11) matters or exceptions to which title in the real
19estate may be subject at the sale;
20    (12) a requirement that title insurance in a specified form
21be provided to a purchaser at the sale, and who shall pay for
22such insurance;
23    (13) whether and to what extent bids with mortgage or other
24contingencies will be allowed;
25    (14) such other matters as approved by the court to ensure
26sale of the real estate for the most commercially favorable

 

 

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1price for the type of real estate involved.
2    (g) Agreement of the Parties. If all of the parties agree
3in writing on the minimum price and that the real estate may be
4sold to the first person who offers in writing to purchase the
5real estate for such price, and on such other commercially
6reasonable terms and conditions as the parties may agree, then
7the court shall order the real estate to be sold on such terms,
8subject to confirmation of the sale in accordance with Section
915-1508.
10    (h) Postponement of Proving Priority. With the approval of
11the court prior to the entry of the judgment of foreclosure, a
12party claiming an interest in the proceeds of the sale of the
13mortgaged real estate may defer proving the priority of such
14interest until the hearing to confirm the sale.
15    (i) Effect of Judgment and Lien. (1) Upon the entry of the
16judgment of foreclosure, all rights of a party in the
17foreclosure against the mortgagor provided for in the judgment
18of foreclosure or this Article shall be secured by a lien on
19the mortgaged real estate, which lien shall have the same
20priority as the claim to which the judgment relates and shall
21be terminated upon confirmation of a judicial sale in
22accordance with this Article.
23    (2) Upon the entry of the judgment of foreclosure, the
24rights in the real estate subject to the judgment of
25foreclosure of (i) all persons made a party in the foreclosure
26and (ii) all nonrecord claimants given notice in accordance

 

 

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1with paragraph (2) of subsection (c) of Section 15-1502, shall
2be solely as provided for in the judgment of foreclosure and in
3this Article.
4(Source: P.A. 85-907.)