2023 updates to the Illinois Mortgage Foreclosure Law and property registration considerations for lenders in Illinois

August 22, 2023

Related PeopleMartin J. Crowley

Practice AreasFinancial Services

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 proceedings. 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 to fines for noncompliance in addition to other legal and equitable remedies.[6] The City of Rockford, like many municipalities, have partnered with third-party property registration services to facilitate their property registration program.         

With a wide range of rules that may be imposed by municipalities throughout Illinois, the Banking attorneys at Chuhak & Tecson can help lenders navigate the specific registration requirements that may be applicable to their commercial or residential real estate in the event of foreclosure.  

Client alert authored by Martin J. Crowley (312 855 4604), Associate.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.


[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).