Mandatory Grace Period Requirements of the Homeowner Protection Act

As you may know, if you are facing foreclosure, under the Homeowner Protection Act, the bank is required to notify you that you have a 30-day grace period before they will file a foreclosure suit. During those 30 days, the bank cannot file suit against you. Moreover, the bank needs to maintain proof that they sent you notice of the 30-day grace period. In Bank of America, N.A. v. Adeyiga, 2014 IL App (1st) 131252 (September 30, 2014) Cook Co., 5th Div., the lender found this out the hard way.

The lender foreclosed the Adeyigas and completed a judicial sale of the property. The Adeyigas filed suit, claiming, among other things, that the bank breached the Homeowner Protection Act by failing to provide the mandatory 30-day grace period. The lender was unable to produce evidence that it had, in fact, sent a grace-period notice, or when it was sent.

The court remanded the case back to trial court, and instructed the trial judge to determine whether or not a grace period notice had been sent. If the trial judge determines that it was not sent, then the judicial sale must be vacated and the case must be dismissed. If the trial court determines that a grace period notice was sent, then if the bank did not wait at least thirty days thereafter to file suit, the judicial sale must be vacated and the case must be dismissed. If the bank did wait thirty days to file suit, the foreclosure stands.

It looks like the courts are taking the grace period notice requirements of the Homeowner Protection Act seriously!