Update on the Illinois Senate Bill 255

On July 9, 2021, the Illinois Governor signed IL SB 255 into law. The bill amends
Section 1508 of the Illinois Mortgage Foreclosure Law (IMFL), which deals with the
procedures for conducting judicial sales of foreclosed properties in Illinois.

Section 5/15-1508(b)(1) was amended by adding the following underlined language:
(1) approve the mortgagee's fees and costs (i) arising
between the entry of the judgment of foreclosure and the
confirmation hearing, and (ii) incurred on or after the
date of execution of an affidavit under subsection (a) of
Section 15-1506 and prior to the judgment but not included
in the judgment, those costs and fees to be allowable to
the same extent as provided in the note and mortgage and in
Section 15-1504;

This new language, on its face, overrules a 2015 decision, BMO Harris Bank, N.A. v.
Wolverine Properties, LLC, 2015 IL App (2d) 140921, which held that a mortgagee
could not include pre-judgment advances in the report of sale unless said advances
were included in the judgment of foreclosure. Instead, it required that the judgment
of foreclosure needed to be amended to include said advances.

Most of the advances that were addressed in Wolverine Properties were made
during the gap period between the execution of the affidavit of amounts due and
owing and the actual date of judgment. IL SB 255 clarifies that such gap advances
can be included in the report of sale without any need to amend the judgment of
foreclosure. Accordingly, going forward, when our firm prepares bids for judicial
sales, we will immediately look to include any recoverable advances made beginning
on the execution date of the affidavit of amounts due and owing through the date of

While IL SB 255 allows all recoverable gap advances to be included in the report of
sale, we still recommend periodically updating aged affidavits before going to
judgment. Unless otherwise advised, we will continue to request updated affidavits
if they are more than six months old and a judgment of foreclosure has not yet been
entered. We do this for two reasons. First, this ensures that the judgment of
foreclosure reflects the most accurate amount. Second, the fewer gap advances
included in the report of sale leaves fewer grounds for defendants to challenge such
amounts at sale confirmation.

Please reach out to one of the contacts below with any questions or concerns or to further discuss the impact of the Bill.

Matthew Kromm
Managing Partner
(312) 201-6691

Anthony Porto
Director of Compliance
(312) 981-7385