In reaction to the holding in a controversial case, on February
8th, 2013, the State of Illinois passed a law amending the Illinois
Conveyances Act (ICA) clarifying well-established Illinois real
estate practice affected by the 2012 bankruptcy court decision.
The decision of the court in In re Crane, stated that a
mortgage in Illinois could be avoided as a result of the
mortgagee's failure to expressly state the interest rate of the
underlying debt on the face of the mortgage (2012 WL 669595
(Bkrtcy. C.D. Ill)). Crane interpreted Section 11 of the
ICA strictly to require an Illinois mortgagee to state the maturity
date of the debt, the amount of the debt, and the interest rate of
the debt secured by the mortgage in order to provide sufficient
constructive notice to the bankruptcy trustee. In Crane,
the court held that the mortgagee's failure to do so resulted
in the loss of the mortgagee's secured position and the
avoidance of the mortgage in bankruptcy.
