Under the Illinois Executive Orders currently in effect, can banks commence or proceed with residential foreclosures? We are aware of the foreclosure restrictions related to federally-backed or federally-insured mortgage loans, but we would like to know whether we can move forward with foreclosures of our in-house mortgage loans.

The Illinois Executive Orders issued during the COVID-19 pandemic do not prohibit lenders from commencing or proceeding with foreclosure actions. However, some Illinois courts have stayed or restricted mortgage foreclosure proceedings. Accordingly, we recommend consulting with your foreclosure counsel regarding any applicable county-level restrictions on foreclosure actions.

Two examples of Illinois courts that have restricted foreclosure actions are the Circuit Court of Cook County, in which “all mortgage foreclosure judgments, evictions in furtherance of a foreclosure, and foreclosure sales are stayed until after September 21, 2020,” (while some motions may continue to be litigated), and the circuit court in Sangamon County, which resumed processing mortgage foreclosure cases on July 1, 2020.

Additionally, we note that at present, residential eviction orders arising out of foreclosure cases cannot be enforced. Executive Order 2020-30 (as amended and extended by Executive Order 2020-52) generally prohibits the commencement of residential eviction actions and prohibits the enforcement of eviction orders for residential premises (with exceptions for tenants posing harm to other tenants or the premises) through September 19, 2020. Consequently, mortgagees or other parties entitled to possession of residential premises following a foreclosure action currently are barred from evicting any occupants from the premises — unless one of the previously mentioned exceptions applies.

Also, we note that Executive Order 2020-25 prohibits the service of garnishment summons, wage deduction summons, and citations to discover assets, which would bar any post-judgment proceedings initiated to collect a deficiency judgment entered in a foreclosure action. Executive Order 2020-25 has been re-issued and extended through September 19, 2020.

For resources related to our guidance, please see:

Circuit Court of Cook County, General Administrative Order 2020-02 (September 3, 2020), Paragraph 1(e)(i) (“All mortgage foreclosure judgments, evictions in furtherance of a foreclosure, and foreclosure sales are stayed until after September 21, 2020, including any court order in furtherance of a foreclosure, such as an order for default, summary judgment, and orders approving sales; other contested motions may continue to be litigated and ruled upon by the court, including, but not limited to, discovery motions, special representatives motions, and receiver motions; . . .”)

Circuit Court of the Seventh Judicial Circuit (Sangamon County), Administrative Order 2020-13 (June 30, 2020) (“Beginning July 1, 2020, the Sangamon County courts will resume the processing of all cases previously subject to suspension by prior Administrative Orders, including: . . . Chancery (Mortgage Foreclosure) [and] Forcible Entry and Detainers — as set forth in a separate Administrative Order.”)

Illinois Executive Order 2020-30 (April 23, 2020) (“Section 2. A person or entity may not commence a residential eviction action pursuant to or arising under 735 ILCS 5/9-101 et seq., unless a tenant poses a direct threat to the health and safety of other tenants, an immediate and severe risk to property, or a violation of any applicable building code, health ordinance, or similar regulation. . . .”)

Illinois Executive Order 2020-52 (August 21, 2020) (“Executive Order 2020-30, as amended by Executive Order 2020-48 and as further amended and revised below, is re-issued in its entirety and extended through September 19, 2020. Section 3. All state, county, and local law enforcement officers in the State of Illinois are instructed to cease enforcement of orders of eviction for residential premises, unless the tenant has been found to pose a direct threat to the health and safety of other tenants, an immediate and severe risk to property, or a violation of any applicable building code, health ordinance, or similar regulation. Nothing in this Executive Order shall be construed as relieving any individual of the obligation to pay rent, to make mortgage payments, or comply with any other obligation that an individual may have pursuant to a lease, rental agreement, or mortgage.”)

Illinois Executive Order 2020-48 (July 24, 2020) (“Executive Order 2020-30, as amended by Executive Order 2020-33 and as further amended and revised below, is re-issued in its entirety and extended through August 22, 2020, whereafter the prohibition on enforcement of orders of eviction for non-residential premises shall be rescinded.”)

Illinois Executive Order 2020-25 (“Section 1. During the duration of the Gubernatorial Disaster Proclamations, Sections 5/12-705, 5/12-805, and 5/2-1402 of the Illinois Code of Civil Procedure, 735 ILCS 5/12-705, 735 ILCS 5/12-805, and 735 ILCS 5/2-1402, that permit the service of a garnishment summons, wage deduction summons, or a citation to discover assets on a consumer debtor or consumer garnishee, are suspended.”)

Illinois Executive Order 2020-52 (August 21, 2020) (“Executive Order 2020-25 is re-issued in its entirety and extended through September 19, 2020.”)