Article XV. Mortgage Foreclosure · Part 17. Possession During Foreclosure · Not amended since adoption on record · Last verified July 20, 2026
In one sentenceFills in the mechanics of who gets placed in possession or appointed receiver — the mortgagee chooses the receiver, a senior mortgagee can override a junior one's choice, and a mortgagee already in possession can only be displaced for misconduct, incapacity, a later receiver appointment, or a senior mortgagee's showing of good cause.
Full Text of 735 ILCS 5/15-1702
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(a)Mortgagee's Rights. No mortgagee shall be required to take possession of the mortgaged real estate, whether upon application made by any other party or otherwise. Whenever a mortgagee entitled to possession so requests, the court shall appoint a receiver. The failure of a mortgagee to request possession or appointment of a receiver shall not preclude a mortgagee otherwise entitled to possession from making such a request at any future time. The appointment of a receiver shall not preclude a mortgagee from thereafter seeking to exercise such mortgagee's right to be placed in possession. (b) Designation of Receivers. Whenever a receiver is to be appointed, the mortgagee shall be entitled to designate the receiver. If the mortgagor or any other party to the foreclosure objects to any such designation or designations and shows good cause, or the court disapproves the designee, the mortgagee in such instance shall be entitled to make another designation.
(c)Rights of Mortgagee Having Priority. If a mortgagee having priority objects to the proposed possession by a subordinate mortgagee or by a receiver designated by the subordinate mortgagee, upon entry of a finding in accordance with subsection (d) of Section 15-1702 the court shall instead place that objecting mortgagee in possession or, if a receiver is to be designated in accordance with subsection (b) of Section 15-1702, allow the designation of the receiver to be made by that objecting mortgagee. (d) Removal of Mortgagee in Possession. A mortgagee placed in possession shall not be removed from possession, and no receiver or other mortgagee shall be placed in possession except upon (i) the mortgagee's misconduct, death, legal disability or other inability to act, (ii) appointment of a receiver in accordance with subsection (a) of Section 15-1704 or (iii) a showing of good cause by a mortgagee having priority. A receiver shall not be removed solely on account of being designated by a mortgagee later determined not to have priority.
(e)Determination of Priority. If the court is required to determine priority for the purposes of subsection (c) of Section 15-1702, a new determination shall be made each time a mortgagee is to be placed in possession or a receiver is to be appointed and shall be an interim determination which shall not preclude the court from making a contrary determination later in the foreclosure. If the court subsequently shall make such a contrary determination, a mortgagee in possession or acting receiver shall not be removed except in accordance with Part 17 of this Article.
(f)Rights to Crops. With respect to any crops growing or to be grown on the mortgaged real estate, the rights of a holder of any obligation secured by a collateral assignment of beneficial interest in a land trust, the rights of a mortgagee in possession, or the rights of a receiver, including rights by virtue of an equitable lien, shall be subject to a security interest properly perfected pursuant to Article 9 of the Uniform Commercial Code, where the holder of a collateral assignment, mortgagee in possession, or receiver becomes entitled to crops by obtaining possession on or after the effective date of this Amendatory Act of 1988.
Plain-English Summary
No mortgagee has to take possession of the property, and passing up that option once doesn't waive the right to ask later. But if a mortgagee entitled to possession asks the court to appoint a receiver instead, the court must do so, and appointing a receiver doesn't stop the mortgagee from later seeking to be placed in possession directly.
When a receiver is needed, the mortgagee gets to name who fills the role. The mortgagor or another party can object with good cause, or the court can reject the choice, but either way the mortgagee gets to make another pick rather than losing the right to designate.
A mortgagee holding a senior lien can override a subordinate mortgagee's attempt to take possession or name a receiver — the court will instead place the senior mortgagee in possession, or let the senior mortgagee pick the receiver, once it makes the priority finding described in subsection (d). Once a mortgagee is in possession, removal is limited to specific triggers: misconduct, death, legal disability or other inability to act, appointment of a receiver under Section 15-1704(a), or a good-cause showing by a mortgagee with priority. A receiver named by a mortgagee later found to lack priority doesn't get removed on that basis alone, since the court's priority call is only an interim determination that can change again later in the case.
One more wrinkle covers crops growing on the property: the rights of anyone in possession — a mortgagee, a receiver, or a collateral-assignment holder — give way to a security interest properly perfected under UCC Article 9, at least where that person took possession on or after the 1988 amendatory act's effective date.
Frequently Asked Questions
Who decides which receiver gets appointed in an Illinois foreclosure?
The mortgagee designates the receiver, though the mortgagor or another party can object for good cause, or the court can disapprove the choice — in which case the mortgagee makes another designation.
Can a senior mortgagee block a junior mortgagee from taking possession?
Yes. A mortgagee with priority who objects can have the court place it in possession instead, or let it name the receiver, once the required priority finding is made.
On what grounds can a mortgagee in possession be removed?
Only for misconduct, death, legal disability or other inability to act, appointment of a receiver under Section 15-1704(a), or a good-cause showing by a mortgagee with priority.
If a court later decides a mortgagee didn't have priority after all, does the receiver it named get removed?
Not solely for that reason — the priority determination is only interim, and removal still requires one of the specific grounds in this section.
What happens to crops growing on foreclosed farmland?
Rights of a mortgagee in possession, a receiver, or a collateral-assignment holder give way to a properly perfected UCC Article 9 security interest, for possession taken on or after the 1988 amendatory act's effective date.
Amendment History
(Source: P.A. 85-1427.)
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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