Illinois Consumer Fraud and Deceptive Business Practices Act

Leszanczuk v. Carrington Mortgage Services, LLC, No. 21-1367 (December 28, 2021) N.D. Ill., E. Div. Affirmed
Dist. Ct. did not err in dismissing for failure to state cause of action plaintiff’s claim that defendant breached mortgage agreement and violated Illinois Consumer Fraud and Deceptive Business Practices Act (Act) by charging plaintiff $20 for visual, drive-by inspection of her residence, after plaintiff had defaulted on her mortgage loan. While plaintiff asserted that said fee was improper under mortgage contract because defendant knew or should have known that she already had occupied her property that was subject of said mortgage, and that said fee had violated HUD regulations, plaintiff failed to allege that parties intended to incorporate HUD regulations into mortgage agreement. Moreover, mortgage agreement expressly allowed lender to charge inspection fee as necessary expenditure to protect value of property after plaintiff’s default. With respect to plaintiff’s claim under Act, plaintiff failed to allege that inspection fee offended public policy, was oppressive or caused her substantial injury.

Bank of New York Mellon v. Dubrovay, 2021 IL App (2d) 190540 (November 17, 2021) Du Page Co. (McLAREN) Reversed and remanded.
Court granted Defendant’s motion to dismiss Plaintiff’s 4th foreclosure complaint for violating the single refiling rule of section 13-217 of Code of Civil Procedure. Because Plaintiff’s accelerations occurred by the filing of foreclosure actions, Plaintiff’s voluntary dismissals of those actions constituted affirmative acts of revocation of those accelerations. Thus, upon revocation the parties returned to their pre-acceleration rights and obligations. Defendants were obligated to make monthly installments, and thus their new payment default gave rise to a separate action. This alleged new default was not part of the core of operative facts of the prior alleged default. As this action and the prior actions were predicated on different operative facts, the single refiling rule did not bar Plaintiff’s 2017 foreclosure complaint. (ZENOFF, concurring; HUTCHINSON, dissenting.)

Your mortgage payments increased unexpectedly.  Maybe your escrow balance is low, taxes increased, or your insurance premium increased.  In any event, you want to verify the information your bank or loan servicers has on file.  You call the servicer and often you must depend on their word if you are able to obtain an answer at all.  Maybe, the servicer used the pandemic as a reason for lost or inconsistent information.  What can you do to verify information or obtain documents when you dispute your mortgage payment increase or account information?

            Pursuant to the Real Estate Settlement Procedures Act (“RESPA”), Congress created a federal law to allow homeowners a mechanism to obtain answers and documents in a timely manner.  The law also allows homeowners to obtain corrections to their account.   Prior to 2014, this formal request was called a qualified written request.  However, today it is simply referred to as a request for information and notice of error.  Under RESPA, the bank or loan servicer, must acknowledge the request or notice within five business days of receipts.  Next, the servicer must conduct a reasonable investigation within thirty business days of receipt of the request for information.  In the interim during this investigation the servicer cannot give any information to a credit reporting agency if a payment related to the inquiry is overdue. 

            If you are facing foreclosure and are unsure of your options, it is important to remember that the sooner you develop a strategy, the more successful your foreclosure defense will be.  The documents you receive from the request for information are useful in developing a defense strategy.  If your property is already in foreclosure litigation, then the court rules for discovery will provide an additional avenue to review and receive documents about your account. 

For many homeowners, the loan servicers may ignore your request or may falsely claim your correspondence does not qualify as a formal request for information and notice of error.  Therefore, it is worth your time to engage a foreclosure defense attorney.  In some situations, a request for information and notice of error is all a family needs to get their account back on track.   Such tactics may prevent foreclosure and deficiency judgments.  If you are falling behind on your mortgage, it is in your best interest to plan a foreclosure defense strategy. Do not ignore a notice from your bank and do not wait until a sheriff’s deputy is knocking down your door. Contact us online (www.legalfreedomlaw.com) or give us a call at 312-253-7363 today for a consultation to discuss your options.

JP Morgan vs. Bell

Case Number: 

2020 IL App (3d) 190128

Decision Date: 

Wednesday, July 1, 2020

District: 

3d Dist.

Division/County: 

Will Co.

            A review of the recent Will County, Illinois case JP Morgan vs. Bell 2020 IL App (3d) 190128 (2020) raises two issues:

Issue (s):

  1. Whether a deceased mortgagor is a necessary party in a foreclosure proceeding.
  2. Whether a recorded release and satisfaction of mortgage agreement and later a recorded certificate of error as to a release and satisfaction by same entity creates a genuine issue of material facts.

The Illinois Code provides that the necessary parties to a foreclosure proceeding includes (1) the mortgagor and (II) other persons (but not guarantors) who owe payments of indebtedness or the performance of other obligations secured by the mortgage and against who personal liability is asserted.  735 ILCS 5/15-1501 (a) (West 2016).  Under section 15-1501(h)(1), the court is not required to appoint a special representative for a deceased mortgagor for the purpose of defending the action, if there is a living person, persons, or entity that holds a 100% interest in the property, by virtue of being the deceased mortgagor’s surviving joint tenant or surviving tenant by the entirety.  The code also provides that in no event may a deficiency judgment be sought or entered in the foreclosure case against a deceased mortgagor.  The court resolved the second issue finding that the two recorded documents created a material issue of fact. 

A foreclosure can be a sprint or a marathon.    It is contingent on whether the homeowner will allow the bank to run its race (“aka the foreclosure process”) with opposition and hurdles or with a clear lane to the finish line.  In Illinois, the bank is required to go through the foreclosure process to obtain lawful possession of real estate after a homeowner has defaulted on its mortgage.

 In foreclosure, a bank is required to file a complaint, obtain a judgment, conduct a sale, and have a judge confirm and approve the sale. While the minimum requirements may appear to be an unobstructed path to the finish line, often the journey may transform into a new destination due to the options available to the homeowner.

Unfortunately, the vast majority of homeowners fail to evaluate their options, evaluate where they are in the in the foreclosure race, and evaluate whether they can assert their rights in this process.  This article and blog allows homeowners to be more than spectators.  It can be used as a tool to gain some limited general knowledge when faced with a foreclosure.  Nothing in this blog can replace an attorney’s personal evaluation of a foreclosure case or individual factual circumstances surrounding your case. In fact if this blog could be summarized in one phrase it would be “SEEK THE ADVICE OF AN ATTORNEY.”   The bank has a team of attorneys, law firms, lobbyists, and advisors that know the rules of the race and train daily to protect the bank’s interest.  A foreclosure defense attorney protects the homeowner’s interest and ensures the bank jumps over every hurdle and considers every path that is advantageous to you.

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MAKE THE BANK JUMP OVER EVERY HURDLE

            The United States has two methods to foreclose on a property depending on the state where the property is located.  Either a state is a judicial foreclosure state or a non-judicial foreclosure state.  The different between the two methods is whether the bank has to go through the judicial process to obtain lawful ownership of the property after a homeowner has defaulted on mortgage payments.  In Illinois, a judicial foreclosure state, the bank must prove the homeowner/ borrower defaulted on the terms of their mortgage and that the bank is entitled to possession.  On the other hand in a non-judicial foreclosure state, such as Tennessee, the bank does not have to go through the judicial process and it would be incumbent on the homeowner to seek judicial intervention to assert rights before a court. 

As a result of Illinois being a judicial foreclosure state, the homeowner has an advantage because a default in mortgage payments is treated as a breach of contract between the lender and borrower.  In Illinois, first the bank must file and serve a foreclosure complaint.  A foreclosure complaint typically is a form court document that includes the amount the homeowner is delinquent and generally attaches a copy of the mortgage and note to prove its case.  The complaint is usually served, meaning physically given to the homeowner, by a sheriff or special process server.   The lack of proper serve does not bestow the court with the authority to rule in a case.  If a Court finds that service was not proper the foreclosure complaint will be dismissed, and the bank will have to start the process over.

In my experience, banks hire third party independent contractors as process servicers to serve their foreclosure complaint on homeowners.  The process servicer may serve the wrong person, dishonestly lie about serving the proper person, or serve a family member under the age of 13.  In one of my cases, a process server claimed to have personally served my client.  However, at the time of the alleged service my client was on vacation in Mexico.  Alternatively, if after several attempts at personal service a bank can serve a homeowner via publication.  Service via publication is providing notice through a local newspaper.  If service is a question in your foreclosure case you should consult an attorney because this tool can be waived with an appearance in court or through other means. 

            The foreclosure process can be split into two stages the prejudgment stage and the post judgment stage.  The majority distinction between the two periods is that the first stage (the prejudgment stage) has no official timeline.  The second stage has a definite timeline.  The bank’s goal is to obtain a judgment so they know when the process will conclude.  Homeowners benefits most from the prejudgment stage because the windows of opportunity to pursue lost mitigation options such as loan modification or forbearance are at their peak when the bank does not know when the process will conclude.  It takes an extraordinary length of time on average a year to litigate an uncontested case.  Therefore, a homeowner maximizes their opportunity to save their home by engaging an attorney early in the process.

The first court hearing is called a Case Management hearing.  A case management status dates are tools for judge’s that helps them manage their court calls.  Nothing relevant or dispositive occurs at these status hearings.  However, the judge often attempts to ascertain if service has been obtained, it the homeowner intends to pursue a loan modification, and inform the homeowner that they are in a judicial process and have the right to answer the complaint that was filed by the bank. A judge generally gives a homeowner 28 days to Answer the Complaint and otherwise plead. 

The next substantive court hearing is the summary judgment or default judgment hearing.  This is the bank’s opportunity to prove its case and dispose of any potential affirmative defenses.  If the Motion for Summary Judgment is granted the official time line begins. The period after a judgment is entered is called the redemption period.  The redemption period is the time the law allows a homeowner to repay the amount awarded the bank in a default or summary judgment.   In Illinois, the redemption period is 90 days. After the redemption period expires the bank has the legal authority to proceed with a foreclosure sale.

A foreclosure sale is an auction of the subject property.  The bank provides notice of an auction date to the public but often is the only party to bid on the property.  After the foreclosure sale the bank has only one final step, which is called the approval or confirmation of sale. 

The confirmation of sale is the final judgment in a foreclosure case. The judge reviews that amount the property was sold at the auction determines the amount the homeowner owes, transfers property rights, and establishes a possession date that is a minimum of 30 days that the homeowner can stay in the property without the bank initiating an eviction lawsuit. 

            Viewed broadly, the foreclosure process is streamlined and routine.  However, with an attorney and knowledge of the process a homeowner can maximize the multiple windows of opportunity to use the process to their advantage.  

I am a proud Chicago native. I grew up on Chicago’s South Side. I graduated from the University of Illinois at Champaign-Urbana and was accepted to law school at the University of Illinois College of Law.

 I deferred law school for two years to teach fourth grade in the Mississippi River Delta area. I decided to defer law school to teach prior to law school because I have a passion for using my knowledge to help others. 

After I finished law school, the world was still in the middle of the Global Financial Crisis. I witnessed hard-working people finding themselves in the unfamiliar situation of foreclosure, bankruptcy, and other collection litigation.  Chicago and the surrounding areas were not immune to the global financial crisis and some would argue experienced a near depression. Often homeowners alone, with limited if any knowledge of the tools or options at their deposal, would negotiate a loan modification or defend a foreclosure case against a well-resourced lender by themselves. 

I feel extraordinarily privileged to work for consumers, small businesses, and homeowners during this crisis. A home is often a family’s most valuable asset. I prefer assisting homeowners in buying and selling a home, but life happens and people deserve the opportunity to use all available resources to protect their asset.  Viewed broadly, the cumulative effects of foreclosures result in reduced property values, abandoned properties, crime, vandalism, and a reduction in tax revenue for vital social services such as education.  I do outstanding work every single day to assist homeowners in the foreclosure process to facilitate alternatives to foreclosure or assist the homeowner in a dignified exit with a fresh start.  A foreclosure is a complex area of the law that involves property, contracts, and regulatory issues. I recommend a person retain an attorney for this difficult process. 

In my current role, I research various legal issues and advise clients throughout all stages of the foreclosure litigation process.  Additionally, I argue motions and represent clients at various hearings in both state and federal court.  I am an adjunct professor at Trinity International University wherein I teach a business legal environment course. I serve as the bridge to connect more homeowners to the options at their disposal. I hope this new blog provides a glimpse of the information homeowners should know to make informed decisions concerning their home.