Please note that this answer discusses the Illinois grace period notice requirement, which expired on July 1, 2016, pursuant to a sunset provision. Please see 735 ILCS 5/15-1502.5.

The answer depends on whether the mortgage loan is considered delinquent. The notice requirement in the Code of Civil Procedure (sometimes called the “grace period notice” requirement) applies whenever a mortgage loan becomes “delinquent” by more than thirty days. 735 ILCS 5/15-1502.5(c). The law defines “delinquent” as “past due with respect to a payment on a mortgage secured by residential real estate.” 735 ILCS 5/15-1502.5(a). If the mortgage payments do not include amounts for property taxes, and the borrower is paying the mortgage payments in full, we do not believe the mortgage loan should be considered delinquent, and the notice requirement would not apply. On the other hand, if a borrower’s payments include amounts for property taxes (or amounts to be escrowed for property taxes), and the borrower fails to make full payments, we believe that the mortgage loan should be considered delinquent. Even if the borrower is making partial payments to cover principal and interest only, the payments should be considered “past due” if not made in full.

In any event, the Code of Civil Procedure requires you to send the housing counseling notice before initiating a foreclosure action. No foreclosure may be filed until thirty days after mailing the notice (and that grace period may be extended if the homeowner seeks approved counseling services). 735 ILCS 5/15-1502.5(d), (e). Also note that the new RESPA servicing rules prohibit servicers from initiating a foreclosure action until “a borrower’s mortgage loan obligation is more than 120 days delinquent.” 12 CFR 1024.41(f)(1)(i). (This requirement applies even to small servicers. 12 CFR 1024.41(j) (“A small servicer shall be subject to the prohibition on foreclosure referral in paragraph (f)(1) of this section. . . .”).) Based on informal guidance we obtained from a CFPB attorney, servicers should look to state law to define when a mortgage loan becomes delinquent. In this case, the most relevant definition of “delinquent” in Illinois law would be in the Code of Civil Procedure’s notice requirement discussed above. See 735 ILCS 5/15-1502.5(a).