"Collateral assignment of beneficial interest" means any pledge or assignment of the beneficial interest in a land trust to any person to secure a debt or other obligation.
15-1202.Collateral Assignment of Beneficial Interest.
Article XV. Mortgage Foreclosure · Part 12. Definitions · Not amended since adoption on record · Last verified July 20, 2026
In one sentenceThis section defines “collateral assignment of beneficial interest” as any pledge or assignment of a land trust beneficial interest made to secure a debt or other obligation.
Full Text of 735 ILCS 5/15-1202
Plain-English Summary
Section 15-1202 gives a compact definition for a term used throughout the Article's provisions on land trust financing. A collateral assignment of beneficial interest, often shortened to CABI, is any pledge or assignment of the beneficial interest in a land trust to a person, made to secure a debt or another obligation.
The term connects directly to Section 15-1106, which spells out when a CABI must, or may, be foreclosed under Article XV, and to Section 15-1205's definition of land trust, since a CABI only exists where a land trust does. Section 15-1107 in turn deems the assignor of the beneficial interest the mortgagor and the assignee the mortgagee once a CABI is foreclosed under this Article.
Frequently Asked Questions
What is a collateral assignment of beneficial interest?
Any pledge or assignment of the beneficial interest in a land trust to a person, made to secure a debt or other obligation.
How does a collateral assignment of beneficial interest relate to a land trust?
It can only exist with respect to a land trust, since it pledges or assigns the beneficial interest that a land trust beneficiary holds.
When must a collateral assignment of beneficial interest be foreclosed under Article XV?
Section 15-1106 answers that question, requiring foreclosure under this Article for a CABI created contemporaneously with the land trust, required by the lender, and structured to allow sale of the trust real estate to satisfy the obligation.
Who becomes the mortgagor when a collateral assignment of beneficial interest is foreclosed?
Section 15-1107 deems the assignor of the beneficial interest in the land trust the mortgagor for purposes of that foreclosure.
Is a collateral assignment of beneficial interest itself a mortgage?
Not by its own terms, but Section 15-1107 deems it a mortgage for purposes of proceeding under this Article when it is foreclosed here.
Amendment History
(Source: P.A. 84-1462.)
Source & verification. Section text and amendment history are
reproduced verbatim from the Illinois Compiled Statutes, published by the
Illinois Compiled Statutes, Illinois General Assembly / Legislative Reference Bureau. Last verified July 20, 2026.
· Official source
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