You have rights in foreclosure

"Illinois law recognizes the breach of an applicable HUD regulation as a defense in an action for foreclosure of a federally insured mortgage." 

Hayes v. M & T Mortg. Corp., 389 Ill. App. 3d 388, 391-392 (1st Dist. 2009)

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“‘Under the Truth in Lending Act, 82 Stat. 146, 15 U.S.C. § 1601 et seq., when a loan made in a consumer credit transaction is secured by the borrower's principal dwelling, the borrower may rescind the loan agreement if the lender fails to deliver certain forms or to disclose important terms accurately.’"

Wells Fargo Bank, N.A. v. Terry, 2010 Ill. App. LEXIS 251 (1st Dist. 2010)

April 9, 2009 New Illinois Foreclosure Law

 § 735 ILCS 5/15-1502.5.  Homeowner protection

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(b) Except in the circumstance in which a [homeowner] has filed a petition for relief under the United States Bankruptcy Code, no [lender] shall file a complaint to foreclose a mortgage secured by residential real estate until the requirements of this Section have been satisfied.

15-1512 Application of Proceeds of Sale and Surplus


   Sec. 15-1512. Application of Proceeds of Sale and Surplus. The proceeds resulting from a sale of real estate under this Article shall be applied in the following order:

(a) the reasonable expenses of sale;

(b) the reasonable expenses of securing possession before sale, holding, maintaining, and preparing the real estate for sale, including payment of taxes and other governmental charges, premiums on hazard and liability insurance, receiver's and management fees, and, to the extent provided for in the mortgage or other recorded agreement and not prohibited by law, reasonable attorneys' fees, payments made pursuant to Section 15-1505  and other legal expenses incurred by the mortgagee;

(c) if the sale was pursuant to judicial foreclosure, satisfaction of claims in the order of priority adjudicated in the judgment of foreclosure or order confirming the sale; and

(d) remittance of any surplus to be held by the person appointed by the court to conduct the sale until further order of the court. If there is a surplus, such person conducting the sale shall send written notice to all parties to the proceeding advising them of the amount of the surplus, and that the surplus shall be held until a party obtains a court order for its distribution or until, in the absence of an order, the surplus is forfeited to the State.