Illinois homeowners get certain protections during a home foreclosure. If you’re facing a foreclosure in Illinois, you should find out about the state’s foreclosure laws so you fully understand these protections. For example, you should know that you’ll get a notice about housing counseling before the foreclosure starts. Once the process begins, you’ll have a certain amount of time to reinstate the mortgage by catching up on the past-due payments. You also get a period of time to redeem (repurchase) the home.
Below you’ll find more information about the main protections and features of Illinois’ foreclosure law, along with citations to the statutes so you can read the law yourself.
The citations to Illinois’ foreclosure statutes are: Illinois Compiled Statutes Chapter 735, Sections 5/15-1501 through 5/15-1605.
We’ve summarized important parts of Illinois’ foreclosure laws below. You can find more detailed articles on various aspects of Illinois foreclosure law in Nolo’s Illinois Foreclosure Law Center.
Illinois is a judicial foreclosure state, which means a mortgage holder must file a lawsuit in order to foreclose on real property. (Learn more about judicial foreclosures.)
Illinois law requires the following notices.
Grace period notice. If a borrower becomes more than 30 days past due on the loan secured by his or her primary residence, the foreclosing party is required to mail a notice (called a "grace period notice"). This notice informs the borrowers that they may seek housing counseling. The foreclosing party cannot initiate a foreclosure lawsuit until 30 days after mailing the notice. 735 Ill. Comp. Stat. § 5/15-1502.5.
If the borrower seeks housing counseling from a state-approved provider and notice of the initiation of counseling services is sent to the foreclosing party, the foreclosing party may not file a foreclosure lawsuit until 30 days after the date of that notice. 735 Ill. Comp. Stat. § 5/15-1502.5.
Furthermore, if the foreclosing party and the borrower agree to a workout (such as a mortgage modification, forbearance agreement, or repayment plan), the foreclosing party may not start a foreclosure so long as the borrower complies with the loan workout plan. 735 Ill. Comp. Stat. § 5/15-1502.5.
The law requiring a grace period notice is scheduled to sunset (end) on July 1, 2016.
Summons and complaint. To begin the foreclosure, the foreclosing party files a lawsuit and gives notice of the suit by serving the borrower with a complaint and summons, along with a notice that advises the homeowner of his or her rights during the foreclosure process. 735 Ill. Comp. Stat. § 5/15-1504.5.
Notice of sale. When the foreclosing party gets a judgment against the borrower, the court will order a sale. Notice of the foreclosure sale must be published once a week for three consecutive weeks. 735 Ill. Comp. Stat. § 5/15-1507.
The foreclosing party must also mail a notice of sale to the borrower at least ten business days before the sale. Illinois Supreme Court Rule 113.
Illinois law provides special protections against foreclosure to military service members and to borrowers who take out a type of loan that is called a “high risk home loan” (a type of home loan where the annual percentage rate or the points and fees exceed certain amounts, for example).
Protection against foreclosure for military service members. In addition to any rights and obligations provided under the federal
Servicemembers Civil Relief Act
, service members deployed to a combat or combat supporting posting overseas within the previous 12 months may apply to the court for a 90-day stay of foreclosure proceedings. 735 Ill. Comp. Stat. § 5/15-1501.5.
Also, a service member who has ben in military service for over 29 consecutive days (or a family member that resides at the service member's home) may file a motion with the court seeking relief from foreclosure proceedings. If the service member's ability to pay the agreed mortgage payments or to defend the foreclosure proceedings is materially affected by his or her military service, the court may:
Protections regarding high risk home loans. Before it can file a lawsuit to foreclose a high risk home loan, the foreclosing party must send a notice that informs the borrower of the right to cure the default within 30 days. 815 Ill. Comp. Stat. § 137/105.
In addition, a borrower may raise violations of the high risk home loan law (which include a prohibition on prepayment penalties and negative amortization, among other things) as a defense in a foreclosure action. 815 Ill. Comp. Stat. § 137/135.
“Reinstating” is when the borrower catches up on the defaulted mortgage's missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Under Illinois law, the borrower may reinstate the mortgage within 90 days after service of the foreclosure complaint. 735 Ill. Comp. Stat. § 5/15-1602.
In some states, the borrower can redeem (repurchase) the home within a certain period of time.
General right to redeem. In Illinois, the borrower can redeem the home until the later of:
Special right to redeem. There is also a special right to redeem in Illinois if:
In this situation, the borrower may redeem within 30 days after the court confirms the sale by paying the foreclosure sale price plus interest and costs. 735 Ill. Comp. Stat. § 5/15-1604. (To get details on redemption rights in Illinois, see Nolo’s article If I lose my home to foreclosure in Illinois, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
In Illinois, the foreclosing party can get a deficiency judgment as part of the foreclosure action if:
.735 Ill. Comp. Stat. § 5/15-1508. (For a summary of the deficiency law in Illinois, see Illinois Laws on Post-Foreclosure Deficiency Judgments.)
The foreclosed homeowner can remain in the home for 30 days after the court confirms the sale. After this time period expires, the former homeowner must move out. 735 Ill. Comp. Stat.