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List of Forms by Chapter - Chapter 1 — Alternative Statutory and Nonstatutory Remedies
- Chapter 2 — Seller Financing and Forfeiture of Installment Agreements
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I. Introduction - II. Seller as Lender
- [2.5] Definition of Seller Financing
- [2.6] Seller’s Dual Role
- [2.7] Seller as Transferor
- [2.8] Benefits and Burdens of Ownership
- [2.9] Retention of Security Interest
- [2.10] Seller as Lender
- [2.11] Underwriting the Risk
- [2.12] Financing Terms
- [2.13] Parties to the Transaction
- [2.14] Due-on-Sale Provision
- [2.15] Extent of the Purchaser’s Rights and Responsibilities
- [2.16] Maintenance of the property
- [2.17] Altering the property
- [2.18] Real estate taxes
- [2.19] Insuring the property
- [2.20] Condemnation proceeds
- [2.21] Liability for Municipal Services
- [2.22] Provisions for Security
- [2.23] Forfeiture Provisions
- [2.24] Title Insurance
- III. Financing Methods
- [2.25] Installment Contract
- [2.26] Structure
- [2.27] Sales Provisions
- [2.28] Financing Provisions
- [2.29] Covenants and Restrictions
- [2.30] Deed
- [2.31] Default and Remedies
- [2.32] Recordation of the Contract
- [2.33] Reporting to the IRS
- [2.34] Advantages to the Purchaser
- [2.35] Advantages to the Seller
- [2.36] Disadvantages
- [2.37] Purchase-Money Note and Mortgage
- [2.38] Structure
- [2.39] Sales Contract
- [2.40] Installment Promissory Note
- [2.41] Security
- [2.42] Advantages to the Purchaser
- [2.43] Advantages to the Seller
- [2.44] Disadvantages
- [2.45] Other Seller Financing Methods
- [2.46] Nonrecourse Note and Mortgage
- [2.47] No Security
- [2.48] Security in Other Property
- [2.49] Lease with Option To Purchase
- [2.50] Assumption of Existing Mortgage
- [2.51] Selling Subject to Existing Mortgage
- [2.52] Wraparound Mortgage
- IV. Requirements
- [2.53] Specific Requirements
- [2.54] Compliance with Applicable Dwelling Code
- [2.55] Truth in Lending
- [2.56] Land Trust Disclosures
- [2.57] General Requirements
- Disclosures
- [2.58] Residential Real Property Disclosure
- [2.59] Lead-Based Paint Hazards
- [2.60] Radon
- [2.61] Agricultural Foreign Investment Disclosure
- [2.62] Recording Cannot Be Prohibited
- [2.63] Uniform Vendor and Purchaser Risk Act
- [2.64] Condemnation
- [2.65] Plat Act
- [2.66] Land Trustee as Creditor
- V. Income and Transfer Tax Issues
- [2.67] In General
- [2.68] General Reporting Requirements
- [2.69] Treasury Regulation Requirement
- [2.70] Information To Be Solicited and Reported
- [2.71] Definition of Real Estate Transaction
- [2.72] Definition of Reportable Real Estate
- [2.73] Reporting Person
- [2.74] Exempt Transferors
- [2.75] No Direct Fee
- [2.76] Reporting Requirement Exemption
- [2.77] Exchange of Residence
- [2.78] Exclusion of Gain from Sale of Principal Residence
- [2.79] General Exclusion
- [2.80] Exclusion Amount
- [2.81] Special Rule for Surviving Spouse
- [2.82] Once Every Two Years
- [2.83] Exclusion of Gain Not Available for Nonqualified Use
- [2.84] Exclusion of Gain if Ownership and Use Are Less than Two out of Five Years
- [2.85] Ownership and Use Period Reduced by Out-of-Residence Care
- [2.86] Foreign Investment in Real Property
- [2.87] Installment Sale Method of Reporting Income
- [2.88] Income Recognized
- [2.89] Automatic Election
- [2.90] Disposition to Related Person Limitation
- [2.91] Sale of Depreciable Property to a Related Person
- [2.92] Interest Rate
- [2.93] History
- [2.94] General Applicability
- [2.95] Exceptions
- [2.96] Adjusted Tax Basis
- [2.97] Computing Gain or Loss
- [2.98] Amount Realized
- [2.99] Amount Recognized
- [2.100] Adjusted Tax Basis
- [2.101] Bargain Sale to a Charitable Organization
- [2.102] Basis of Property Acquired from a Decedent
- [2.103] Property Representing Income in Respect of a Decedent
- [2.104] Basis of Property Acquired by Gift
- [2.105] One-Year Basis Transfer Rule
- [2.106] Cancellation of Indebtedness Income
- First-Time Home Buyer Tax Credit
- [2.107] Initial Law
- [2.108] Recapture Provision
- [2.109] Extension and Modification
- [2.110] Tax-Deferred Exchanges
- [2.111] Illinois Real Estate Transfer Tax
- [2.112] Illinois Real Estate Transfer Tax Law
- [2.113] Land Trust Recordation and Transfer Tax Act
- VI. Other Installment Contract Issues
- [2.114] To Record or Not To Record
- [2.115] Equitable Conversion
- [2.116] Deed and Money Escrow
- Joint Tenancy
- [2.117] Statutory Specificity
- [2.118] Applicability to Installment Contracts
- [2.119] Deed Reformation
- [2.120] Duty of the Seller To Convey to Joint Tenants
- [2.121] Applicability to Assignees of Purchasers
- [2.122] Exemption of Homestead
- VII. Remedies on Default
- VIII. Forfeiture
- [2.126] In General
- [2.127] Possession
- [2.128] Forcible Entry Prohibited
- [2.129] Applicability of Eviction Statutes
- [2.130] Inapplicability of Eviction Statutes
- [2.131] Discretionary Use of Illinois Mortgage Foreclosure Law
- Statutory Notice and Demand
- [2.132] Right To Cure
- [2.133] Declaration of Forfeiture
- [2.134] Demand for Possession
- [2.135] Proceeding with Eviction Action
- [2.136] Pleadings
- [2.137] Evidence
- [2.138] Notice to Unknown Occupants
- [2.139] Constructive Service
- [2.140] Military Personnel
- [2.141] Jury Trial
- [2.142] Trial ex Parte
- [2.143] Standard of Proof
- [2.144] Stay of Enforcement
- [2.145] Pursuing Other Remedies
- [2.146] Clearing Title
- IX. Appendix
- [2.147] Warning Notice: Notice of Intention To Declare a Forfeiture of All Rights Under an Installment Contract and Notice of Intention To File an Eviction Action
- [2.148] Declaration of Forfeiture and Termination of All Rights of Purchaser Under Installment Contract
- [2.149] Demand for Possession
- [2.150] Affidavit of Seller
- Chapter 3 — Deficiencies, Surpluses, and Entitlements
- I. [3.1] Introduction
- II. Sale Proceeds and Surpluses
- [3.2] Statutory Distribution Under 735 ILCS 5/15-1512
- [3.3] 735 ILCS 5/15-1512(a) — Expenses of Sale
- [3.4] 735 ILCS 5/15-1512(b) — Maintenance Expenses
- [3.5] 735 ILCS 5/15-1512(c) — Satisfaction of Claims as Adjudicated in the Judgment of Foreclosure and Sale
- [3.6] 735 ILCS 5/15-1512(d) — Surplus To Be Held by Selling Officer Pending Further Order of Court
- Right to Surplus
- [3.7] Mortgagor’s Entitlement
- [3.8] Foreclosed Lienholders
- [3.9] Application of Surplus to Prior Interests or Liens
- [3.10] Equitable Lienholders
- [3.11] Forfeiture of Surplus
- III. Deficiency Judgment
- Statutory Right to Deficiency
- [3.12] 735 ILCS 5/15-1511 — Deficiency
- [3.13] 735 ILCS 5/15-1508(e) — Deficiency Judgment
- [3.14] Entry of Deficiency Judgment as Mandatory
- [3.15] Request in Complaint To Foreclose
- [3.16] Personal Jurisdiction over Persons Liable
- [3.17] Deficiency Judgment as Part of Order Confirming Sale
- [3.18] Memorandum of Judgment
- [3.19] In Rem Judgment vs. In Personam Judgment
- [3.20] Determining Amount of Deficiency
- Defenses to Entry of Deficiency Judgment
- [3.21] Discharge in Bankruptcy
- [3.22] Deed in Lieu of Foreclosure
- [3.23] Consent Foreclosure
- [3.24] Objections to Confirmation of Foreclosure Sale
- [3.25] Inability to Pay
- [3.26] Res Judicata
- [3.27] Setoff
- [3.28] Liability of Guarantors for Deficiencies
- [3.29] Avoidance of Deficiency Judgments in Bankruptcy
- Chapter 4 — Bankruptcy Considerations in Foreclosure
- I. [4.1] Introduction
- II. [4.2] Scope of Automatic Stay
- III. [4.3] Duration of Automatic Stay
- IV. [4.4] Property of the Estate
- V. Motion for Relief from Automatic Stay
- [4.8] In General
- [4.9] Statement of Default/Motion To Modify Stay
- Service of Notice of Motion
- [4.10] In General
- [4.11] Sample Notice of Motion
- [4.12] Filing Motion for Relief from Stay
- Form of Motion for Relief from Stay
- [4.13] In General
- Sample Motions for Relief from Stay
- [4.14] Chapter 7 Filing
- [4.15] Chapter 13 Filing
- Basis of Motion for Relief from Stay
- [4.16] Lack of Equity
- [4.17] Property Not Necessary to an Effective Reorganization
- [4.18] In Rem Relief/Abusive Filings
- [4.19] Ineligible Debtors
- [4.20] Preliminary Hearing Within 30 Days
- [4.21] Final Hearing Within 30 Days/Termination of Stay
- [4.22] Sample Order for Relief from Stay
- VI. [4.23] Debtor’s Defense: Adequate Protection
- VII. [4.32] Single-Asset Real Estate Case
- VIII. [4.33] Relief from Automatic Stay for Cause
- Chapter 5 — Lender’s and Purchaser’s Environmental Liability Prior to, During, and After Foreclosure
- I. General Considerations
- II. [5.6] Creating Loan Documents To Address Environmental Risk
- III. [5.9] Lender’s Statutory Environmental Cleanup Exposure Under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980
- IV. [5.10] The Lender Liability Rule
- V. [5.11] The Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996
- VI. [5.12] Lender Liability and the Secured Creditor’s Exemption Under the Illinois Environmental Protection Act
- VII. [5.13] Lender’s Environmental Liability for Underground Storage Tanks
- VIII. [5.14] Lender’s Environmental Due Diligence Pre-Loan and Pre-Foreclosure
- IX. [5.15] Exemptions from Liability for Prospective Purchasers and Adjacent Property Owners
- X. [5.16] Illinois’ Voluntary Cleanup Program and Site Remediation Program
- XI. [5.17] Closure Letters and Compliance Statements — Releases, NFR Letters, and NFA Letters
- XII. [5.18] Conclusion
- Chapter 6 — Loan Workouts and Short Sales
- I. [6.1] Introduction
- II. [6.2] Loan Workouts
- III. Mortgage Release Program
- IV. Loan Modifications — Lender or Servicer Programs
- V. Loan Modifications — Fannie Mae and Freddie Mac
- VI. Short Sales
- [6.20] In General
- [6.21] Considerations in Representing the Seller in a Short Sale
- [6.22] Elements of a Short Sale
- [6.23] Modifications of the Contract for a Short Sale
- [6.24] Documentation for a Short Sale Package
- [6.25] Treatment of Deficiencies in a Short Sale
- [6.26] Considerations in Representing the Buyer in a Short Sale Transaction
- VII. Forgiveness of Debt
- VIII. [6.31] Loan Workouts
- Chapter 7 — Income Tax Consequences
- I. [7.1] Introduction
- II. [7.2] Tax Consequences of Foreclosure to Mortgagor
- [7.3] Gain or Loss to Mortgagor Resulting from Foreclosure Sale
- [7.4] Characterization of Debt as Capital or Ordinary
- [7.5] Timing for Realization of Gain or Loss Resulting from Foreclosure
- [7.6] Home Sale Gain Exclusion
- [7.7] Discharged Debts Are Includable in Gross Income
- [7.8] Exceptions to Rule That Discharged Indebtedness Is Income
- [7.9] Bankruptcy Exception
- [7.10] Insolvency Exception
- [7.11] Qualified Farm Indebtedness Exception
- [7.12] Qualified Real Property Business Indebtedness Exception
- [7.13] Qualified Principal Residence Indebtedness Exception
- III. [7.14] Tax Consequences of Foreclosure to Mortgagee
- [7.15] Gain or Loss to Mortgagee Resulting from Foreclosure Sale
- [7.16] Gain or Loss to Mortgagee from Subsequent Sale of Foreclosed Property
- [7.17] Bad-Debt Deduction
- Mortgagee’s Tax Reporting and Withholding Obligations
- [7.18] Mortgagee May Be Required To File IRS Form 1099-A
- [7.19] Mortgagee May Be Required To File IRS Form 1099-C
- [7.20] Foreign Investment in Real Property Tax Act Requirements for Foreclosing Mortgagees
- [7.21] Real Estate Taxes
- William J. Anaya
William J. Anaya
William J. Anaya is a Partner at UB Greensfelder, LLP, in Chicago, where he concentrates in environmental law transactions and litigation. He is Past Chair of the Board of IICLE® and has received IICLE®’s Addis Hull Award for Excellence in Legal Education. Mr. Anaya is AV Rated by Martindale-Hubbell and a member of the Illinois State Bar Association’s Environmental and Natural Resources Law and Real Estate Law Section Councils. He received his B.A. from Purdue University and his J.D. from the Indiana University Maurer School of Law.
- Barry A. Chatz
Barry A. Chatz
Barry A. Chatz is a Partner at Saul Ewing LLP in Chicago, where he concentrates in bankruptcy and insolvency. He is a member of the American Bar Association, the American Bankruptcy Institute, and the Turnaround Management Association. Mr. Chatz received his B.A. from the University of Wisconsin–Madison and his J.D. from the DePaul University College of Law.
- Matthew E. Cohn
Matthew E. Cohn
Matthew E. Cohn is an Officer at Greensfelder, Hemker & Gale, P.C., in Chicago, where he concentrates his practice in real estate and the litigation of environmental and insurance coverage matters. Before becoming an attorney, he worked as a hydrogeologist for a global environmental engineering and consulting firm for several years. He is a member of the Illinois State Bar Association’s Environmental Law Section Council and the American Bar Association’s Section of Environment, Energy, and Resources. Mr. Cohn received his B.S. in Geology with honors from Bucknell University, his M.S. in Geology from Indiana University, and his J.D. with honors from Chicago-Kent College of Law.
- Amy Tolan Grace
Amy Tolan Grace
Amy Tolan Grace (2021) is at FNBC Bank & Trust in LaGrange. She received her B.A. from Regis University and her J.D. from The UIC School of Law.
- Karen A. Hayes
Karen A. Hayes
Karen A. Hayes is a Partner at Freeborn & Peters LLP in Chicago, where she focuses her practice on tax matters. She has been named an Emerging Lawyer by Illinois Leading Lawyers (2020) and one of The Legal 500 for Non-Contentious Tax (2016). Ms. Hayes received her B.A. from Saint Cloud State University and her J.D. from Harvard Law School.
- Courtney E. Kennedy
Courtney E. Kennedy
Courtney E. Kennedy is a Partner at Ehrmann Gehlbach Badger & Considine, LLC, in Dixon, where she focuses on civil and commercial litigation, real estate law, and land use law. Ms. Kennedy received her undergraduate degree magna cum laude from Ashford University and her J.D. from the Northern Illinois University College of Law.
- Steven C. Lindberg
Steven C. Lindberg
Steven C. Lindberg is Of Counsel at Diaz Anselmo Lindberg P.A. in Naperville, where he concentrates his practice in mortgage foreclosure and real estate. He is a member of the U.S. Foreclosure Network and the Illinois State and Florida Bar Associations. Mr. Lindberg received his B.A. from the University of Illinois at Chicago, his M.S. from St. Joseph’s University, and his J.D. from The UIC John Marshall Law School.
- Erica Crohn Minchella
Erica Crohn Minchella
Erica Crohn Minchella is a Principal at Minchella & Associates, Ltd., in Skokie, where she focuses her practice on real estate transactions and litigation. She has been recognized by Super Lawyers, Leading Lawyers, and Martindale-Hubbell. Ms. Minchella received her B.A. from the University of Illinois and her J.D. from the Loyola University of Chicago School of Law.
- Robert H. Rappe, Jr.
Robert H. Rappe, Jr.
Robert H. Rappe, Jr., is managing attorney at Codilis & Associates, P.C., in Burr Ridge, where he focuses on real estate transactions and mortgage foreclosure. He is a member of the Illinois State and DuPage County Bar Associations and the Mortgage Bankers Association. Mr. Rappe received his B.A. from DePaul University and his J.D. from DePaul University College of Law.
- Lauren T. Riddick
Lauren T. Riddick
Lauren T. Riddick is an associate at Codilis & Associates, P.C., in Burr Ridge, where she focuses on mortgage foreclosure. She is a member of the Illinois State and Florida Bar Associations. Ms. Riddick received her J.D. from the University of Florida.
- Jeffrey M. Sniadanko
Jeffrey M. Sniadanko
Jeffrey M. Sniadanko is an associate at Clark Hill PLC in Chicago, where he focuses his practice on litigation. He is a member of the Chicago and Illinois State Bar Associations. He received the CALI Excellence for the Future Award for Civil Procedure (Fall 2016) and Civil Litigation (Spring 2018). Mr. Sniadanko received his B.A. from Loyola University Chicago and his J.D. from the Chicago-Kent College of Law.
- Emily R. Vivian
Emily R. Vivian
Emily R. Vivian is a Partner at Ehrmann Gehlbach Badger & Considine, LLC, in Dixon, where her practice is focused on residential and commercial real estate, estate planning, estate and trust administration, and business transactions. She is Chair of the Illinois State Bar Association’s Real Estate Law Section Council and a Member of the ISBA’s Legislative Committee. Ms. Vivian received her B.S. with high honors from the University of Illinois at Urbana-Champaign and her J.D. with high honors from the Chicago-Kent College of Law.
Mortgage Foreclosure: Corresponding Issues (ARCHIVED 2021 EDITION)
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