With foreclosure rates on the rise in 2023, lenders in Illinois should take particular care to ensure that they are in compliance with the various state, county and municipal notice and registration requirements for properties subject to foreclosure proceedings.

Section 15-1503 of the Illinois Mortgage Foreclosure Law (the “IMFL”) requires that a notice of foreclosure shall be recorded in the county in which the mortgaged real estate is located and shall be constructive notice of the pendency of the foreclosure action.^[1] As of June 2023, Illinois Senate Bill No. 201 struck the additional notice requirements of Section 15-1503(b) previously applicable to residential real estate.

Formerly, Section 15-1503(b) of the IMFL required that lenders foreclosing on residential real estate, in addition to recording the notice of foreclosure with the county in which the property was situated, also issue a copy of the notice of foreclosure to the local municipality where the property was located.

Yet, even in the absence of the additional notice requirements of former Section 15-1503(b), many municipalities still require mortgagees of both commercial and residential real estate to comply with local ordinances for properties subject to foreclosure. Specifically, in an effort to combat blight, municipalities throughout the state have created local rules requiring lenders to register and regularly inspect properties which are subject to foreclosure and will enforce fines and other legal penalties in the event of noncompliance. 

Because these requirements are imposed at the municipal level, they vary significantly throughout the state and, in turn, can create confusion for lenders looking to ensure that their properties remain in compliance with local rules.

For example, the City of Aurora requires that within 14 days of a legal filing seeking foreclosure, the foreclosing party shall register the property and pay the registration fee of $250.00.^[2] The person or entity registering the property must certify that the property has been inspected within the 30 days preceding registration and certify whether the property is vacant, abandoned or showing evidence of vacancy.^[3] Further, the City of Aurora’s municipal code creates an ongoing duty for lenders to inspect the property and maintain its semi-annual registration during the pendency of the foreclosure action.^[4]

Similarly, the City of Rockford requires that any lien holder or mortgagee holding a mortgage on real property located within the city must inspect a property within 30 days of initiating a foreclosure proceeding in order to determine its occupancy status, and, within 30 days of completing the inspection, shall register the property with the city and pay the required fee.^[5] To the extent a party does not comply with the City of Rockford’s inspection and registration requirements, it may be subject fines for noncompliance in addition to other legal and equitable remedies.^[6] The City of Rockford, like many municipalities, has partnered with PROCHAMPS, a third-party property registration service, to facilitate their property registration program.         

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_{[1] 735 ILCS 5/15-1503(a).}

_{[2] City of Aurora, Illinois, Code of Ordinances, §12-505(a).}

_{[3] Id. at 12-505(b).}

_{[4] Id. at 12-505(c) & (e).}

_{[5] City of Rockford, Illinois Code of Ordinances, §17-69 (a)-(d) (Feb. 4, 2021).}

_{[6] Id. at §17-76(a)-(d).}