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Monday, November 18, 2013

No Requirement to Record Mortgages in Illinois

The Seventh Circuit Court of Appeals recently held that there is no requirement that mortgages be recorded in Illinois.  Union County v. MERSCORP, Inc.  Union County had sued MERSCORP (a mortgage servicer), claiming it was in violation of Illinois law because it failed to record mortgage assignments.  The district court had dismissed the case, finding no such requirement in Illinois.  On appeal, the Seventh Circuit agreed, rejecting the county's argument that the "plain language" of 765 ILCS 5/28 requires that "deeds, mortgages....shall be recorded in the county in which such real estate is situated," finding that the purpose of this language is to instruct as to where mortgages should be filed if they are recorded rather than establish a recordation requirement for initial mortgages or assignments.  The court acknowledged that there may be good reason to record mortgages (to protect priority of the security interest) but no law required it.


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