21.14 Mortgage Foreclosure and Mechanics Lien Cases

(A) Assignment of Mortgage Foreclosure and Mechanics Lien Cases.

The judge to whom a matter is assigned may order any contested matter pending in the Mortgage Foreclosure/Mechanics Lien Section of the Chancery Division to mediation and, except as provided in sections 21.14(B)-(D), the provisions set forth in Sections 21.01 through 21.13 will apply.  All residential mortgage foreclosure cases will be referred to mediation using Form 7 (Mortgage Foreclosure Mediation Referral Order).  All non-residential mortgage foreclosure cases and all mechanics lien cases will be referred to mediation using Form 2 (Order of Referral to Court-Annexed Mediation).

(B) Definition of “Residential Mortgage Foreclosure.”

For purposes of this mediation rule, “residential mortgage foreclosure” means a mortgage foreclosure case pending in the Circuit Court of Cook County, Chancery Division, Mortgage Foreclosure/Mechanics Lien Section against property that is: (1) a single family home, single family condominium or, a property of four (4) units or less; and (2) the mortgagor resides in the property as the mortgagor’s principal residence.  All other properties will be considered non-residential for purposes of this mediation rule.

(C) Non-Residential Mortgage Foreclosure Cases. 

All non-residential mortgage foreclosure cases will comply with and be referred to mediation under the provisions set forth in sections 21.01 through 21.14. 

(D) Residential Mortgage Foreclosure Cases.  

Provisions in Sections 21.14(D)(1)-(10) are applicable to residential foreclosure cases. 

(1) Actions To Be Taken By Defendant Before Requesting Mediation.

(i) HUD-Certified Housing Counseling Required. 

(a) Absent an exception listed in (b) below, any defendant in a residential mortgage foreclosure case must meet with a HUD-certified housing counselor prior to presenting a motion for mediation.  This provision applies to self-represented defendants and to any defendant who is represented by a private attorney.   Access to local HUD-certified housing counselors is provided by the court at no cost to the defendant.  A defendant may call a helpline overseen by the Court to secure an appointment with HUD-certified housing counseling agency contracted to provide services for residential mortgage foreclosure cases in Cook County.     

(b) Exceptions to the HUD-Certified Housing Counseling Requirement. 

The housing counseling services provided by the following entities will be sufficient for housing counseling purposes and exempt the defendant from the HUD-certified housing counseling requirement set forth in Section (D)(1)(i).

(1) Government Agencies.  A defendant in a residential mortgage foreclosure case who is receiving housing counseling at no cost to the defendant from the Office of the Illinois Attorney General or another state or federal agency is exempt from the HUD-certified housing counseling requirement.

(2) Civil Legal Service Providers.  A defendant in a residential mortgage foreclosure case who is receiving civil legal services and housing counseling  at no cost to the defendant from a civil legal service provider, where the service provider is representing the defendant for the duration of the foreclosure, is exempt from the HUD-certified housing counseling requirement.  For purposes of this exemption, “civil legal services,” and “civil legal service provider” must comply with the definitions under the Illinois Equal Justice Act, 30 ILCS 756/10 (2012).

(ii) Answer and Appearance Required.

Any defendant in a residential mortgage foreclosure must file an answer and appearance with the Clerk of the Circuit Court before or at the time of requesting mediation.

(iii) Meeting with an Attorney Before Court Appearance. 

Any self-represented defendant in a pending residential mortgage foreclosure case has the option to meet with a legal aid attorney provided through the Chancery Division Advice Desk, at no cost to the defendant, for legal advice and assistance in preparing necessary paperwork.

(2) Written Motion Required.  

Any party requesting mediation in a pending residential mortgage foreclosure mediation case must present a written motion to the court.  The motion must be certified pursuant to Section 1-109 of the Illinois Code of Civil Procedure, 735 ILCS 5/1-109 (2012), or supported by an affidavit that complies with Illinois Supreme Court Rule 191.  The motion must identify compliance with the sections 21.14(B) and 21.14(D)(1)(i)-(iii).  

(3) Document Exchange and Review Before Referral to Mediation Required.  

Parties in residential mortgage foreclosure cases must exchange and review all documents relating to any possible settlement agreement prior to any referral to mediation.  A failure by the defendant to provide the plaintiff with the required financial documents for a loan modification or other settlement agreement may result in the denial of a request for mediation.  A failure by the plaintiff to review the completed financial documents timely submitted by the defendant may result in a stay of the foreclosure case until a review has occurred.  Document exchange may be ordered by the court at the initial case management hearing or at any other court hearing thereafter at the court’s discretion.

(4) Appointment of the Mediator and Scheduling of the Mediation Session for a Residential Mortgage Foreclosure Case. 

All provisions of Section 21.03 shall apply to residential mortgage foreclosure cases except as provided in Sections 21.14(D)(4)(i)-(iv): 

(i) Appointment of the Mediator.

In all residential mortgage foreclosure cases, the court may automatically appoint the Center for Conflict Resolution as the mediator to provide mediation services at no cost to either party.  If all parties agree to the appointment of a court-certified mediator that is not the Center for Conflict Resolution, the court may appoint a court-certified mediator other than the Center for Conflict Resolution.  If the parties agree to the appointment of  a court-certified mediator, all parts of Section 21.03, including compensation of the mediator, apply to the mediation.   

(ii) Scheduling of Initial Mediation Session. 

The first mediation session for a residential mortgage foreclosure case must occur within four (4) months of entry of the order of referral to mediation.  This time for scheduling the first mediation session may be adjusted by the court for good cause shown.

(iii) Time for Completion of Mediation Session. 

Mediation will be completed within three (3) months of the first mediation session unless extended by court order, for good cause shown.

(iv) Cases Referred to Mediation Before August 1, 2013 Amendment. 

The time for initial mediation sessions and for completing mediation sessions does not apply retroactively to residential mortgage foreclosure cases referred to mediation before the effective date of this rule. 

(5) Appointment of Pro-Bono Legal Representation at the Mediation Session.

The court may appoint Chicago Volunteer Legal Services (CVLS) in a limited capacity to represent an otherwise unrepresented defendant at the mediation session(s) at no cost to the defendant.  Defendant may waive this appointment and proceed with a private attorney or as a self-represented defendant.  CVLS may make a motion to terminate its appointment for mediation for good cause shown.

(6) Conduct of the Mediation Session.

(i) Applicability of Section 21.04.

Except as provided in Section 21.14(D)(6)(ii), all parts of Section 21.04 apply to residential mortgage foreclosure cases that are referred to mediation.

(ii) Persons Required to be Present.

In addition to the requirements set forth in Section 21.04(A), the representative of the lender may appear by telephone for the mediation session at the court’s discretion.  Appearance by telephone does not exempt any requirement that the representative attending the mediation have full authority to negotiate a settlement on behalf of the lender. 

(7) Completion of Mediation.

All parts of Section 21.05 apply to residential mortgage foreclosure cases.  In addition to the requirements set forth in Section 21.05(A), if the parties have not reached an agreement after two (2) mediation sessions and the parties cannot agree whether to hold a third or subsequent mediation session, either or both sides may file a motion to terminate the mediation pursuant to Section 21.05(A)(3), or a motion to return to the trial call, or an equivalent motion, with the court.  Additionally, the mediator may file a Form 4 (Memorandum of Agreement/No Agreement) and a Form 5 (Mediator Report) with the court explaining the parties have not reached agreement and could not agree to further mediation sessions. 

(8) Proceedings During Mediation.

No judgment of foreclosure will be sought or entered in a residential mortgage foreclosure case until completion of the mediation.  In the event a residential mortgage foreclosure case was referred to mediation after entry of the judgment of foreclosure, no sale will be conducted or approved until completion of the mediation.  Section 21.06 controls all other proceedings in residential mortgage foreclosure cases. 

(9) Proceedings After Mediation.

In the event the mediation is completed with no agreement and the mortgage foreclosure is set to proceed in due course, the plaintiff must submit a copy of Form 7 (Mortgage Foreclosure Mediation Status Order), showing that mediation has been terminated, with courtesy copies of any motion for entry of judgment of foreclosure or any motion for approval of sale. 

(10) Forms

The following forms will be used in addition to the forms identified in Section 21.10:

Form 7:  Mortgage Foreclosure Mediation Referral Order

Form 8:  Mortgage Foreclosure Mediation Status Order

(E) Training for Judges, Key Court Personnel, and Volunteers.

All judges, key court personnel, and volunteers providing direct services to the court will be trained on appropriate mediation services for Chancery Division cases, including residential mortgage foreclosure cases:

(1) Judges and Key Court Personnel. 

Training will be provided for all judges and key court personnel assigned to mortgage foreclosure mediation cases.  “Key court personnel” may include judicial law clerks, secretaries, student externs, and circuit court clerks, among other staff members. 

(i) The training will consist of seminars covering the following topics:

(a) Mortgage foreclosure law and changes to the law;

(b) Mortgage foreclosure regulations;

(c) Mortgage foreclosure defenses;

(d) Mortgage foreclosure judgments, orders, and court procedures;

(e) Mortgage foreclosure mediation issues;

(f) Best practices for mortgage foreclosure and mediation; and

(g) Any other mortgage foreclosure related issues that may periodically arise.

(ii) Materials will be distributed that include, but not limited, the following materials:

(a) Mortgage foreclosure law materials including information on recent state and federal regulations;

(b) Courtroom Procedures; and

(c) Mediation forms and Orders used in court.

(iii) Judges will additionally receive, upon entering the Mortgage Foreclosure/Mechanics Lien Section, a copy of the bench book (to be updated periodically), and a minimum 2 weeks of continuous training during which the judge will observe proceedings and be tutored and mentored by fellow and experienced judges about law and procedures utilized in the Section. 

(2) Volunteers Providing Direct Services to the Court. 

All volunteers providing direct services for the court for mortgage foreclosure mediation shall demonstrate that they are adequately trained.  Volunteers may demonstrate adequate training by providing the court with a certificate of training from an accredited institution, such as an ABA accredited law school or a court approved mediation training institution, which covers the topics set forth Section 21.14(E)(1)(i). 

(F) Funding for Mediation and Mediation-Related Services for Residential Mortgage Foreclosure Cases.

Funding for mortgage foreclosure mediation is provided by the Cook County Board of Commissioners at no cost to the parties.  This funding covers dedicated housing counseling services, dedicated pro bono legal aid, mediation services and some court staff.

[Dated July 29, 2013, effective August 1, 2013.]

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