Illinois Foreclosure Document Pilot Program

By Robert Harrison, J.D
Illinois has enacted provisions for its Foreclosure Document Pilot Program through Senate Bill 1487.  This bill requires recorders in a county with a population of over 3 million to implement a pilot program that will only allow documents to be recorded against a property in foreclosure by judicial order.  This does not apply to a mortgagee that recorded the lis pendens notice of foreclosure.
Judicial Order
The judicial order barring nonrecord claimants from recording is given by the judge upon motion by the plaintiff in the foreclosure case. This judicial order is to be recorded by recorder as a separate document in the chain of title and after the notice of foreclosure.  The owner of the property is also not allowed to record any documents without the court’s approval; the exception being court orders related to the foreclosure case itself or court orders related to the property that were entered after recordation was prohibited.
Nonrecord Claimants
A nonrecord claimant is any person who claims to have an interest in mortgaged real estate whose interest is not disclosed by recorded notice or constructive notice. Under the Pilot Program, for a nonrecord claimant to record a document against the property that is subject to the foreclosure action, he or she must obtain a certified court order.  That certified order must be presented in person at the recorder’s office along with the document to be recorded and proper photo identification.  A mechanics lien claimant, unit of government, or agents of the government or judicial body are not required to obtain a certified court order before recording.
Expiration of the Judicial Order
The judicial order barring nonrecord claimants from recording expires when the judicial sale of the property has been confirmed by court order.  When a new deed is issued, after the foreclosure is finalized, a court order confirming the sale must be presented at the time of recordation of the new deed; this acts as evidence of the expiration of the judicial order.
Responsibility of Recorder
If the recorder’s office mistakenly allows a document to be recorded contrary to the judicial order, the recorder must notify, in writing, the person who recorded the document.  If after 30 days’ notice the person who recorded is not able to obtain the certified court order required to be recorded, the recorder must then record a new document that voids the erroneous recording.  The recorder and its agents or employees are immune from liability except for cases of willful or wanton misconduct.
If implementation of the program is not feasible due to workforce challenges or software or hardware issues, the recorder may end the pilot program earlier than the repeal date of January 1, 2019 by certified letter to the Chief Judge of the county.
This pilot program will run from January 1, 2016 to January 1, 2019.
About the Author
Robert Harrison, Esq. is a Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Boston University and earned his Juris Doctor at the Boston University School of Law. Robert is admitted to the Bar in Massachusetts. He can be reached at robert.harrison@bankersadvisory.com.