Before the marriage, Steven held title to a vacant lot. He and his wife, Gina, agreed to take out a mortgage to finance the building of the marital residence on the property. The property title stayed in Steven’s name alone. Steven executed a mortgage to finance the construction. At that time, Gina executed a waiver of her homestead interest.
Steven filed for divorce. The court ordered that Gina would receive this house. Steven was ordered to give Gina a quitclaim deed. This would put the property in Gina’s name alone. While Gina lived in the house, she was to be responsible for the payment of the mortgage, real estate taxes, and expenses of the house. The court said that if Gina was not able to refinance within six months of the divorce, then the house should be sold. Then, the money from the sale would be divided between them.
While the divorce was going on, PNC Bank filed the current foreclosure action. PNC Bank alleged that the first mortgage was in default. It said that the balance due at that time was $506,587.20.
Illinois law states that, ‘Every individual is entitled to a homestead interest in their residence of $15,000’. A creditor cannot take the homestead interest away from you unless you have waived it, or given it away. The creditor can get a Judgment for the sum due to them, but they cannot take your homestead interest away from you as part of their Judgment.
Nothing in the Court file stated that Gina had any homestead interest. But, the divorce court stated that Gina had a potential equitable interest in the marital home because she was married. Because of the marriage, she had regained the homestead interest that she had signed away.
The Court specifically said that a former spouse does not, as a matter of law, lose her homestead exemption in property because of a divorce decree that gives her an interest in the property but does not address or dispose of the former spouse’s homestead interest in the property.
PNC Bank v. Pattermann, 2016 IL App (3d) 150568

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