Illinois Supreme Court issues opinion favoring mortgage lenders
In November 2013, the Illinois Supreme Court issued an opinion in
Wells Fargo Bank, N.A. v. McCluskey, a case dealing with the standards for vacating a judgment of default
in a foreclosure case. The court's decision makes it easier for mortgage
lenders to proceed with foreclosures in Illinois. Illinois residents should
be aware of the impact that the court's decision could have on foreclosures
in the state.
Motion to vacate a judgment of default
The homeowner in the case fell behind in her mortgage payments, so the
lender issued a foreclosure complaint. The homeowner did not respond to
the complaint, and the court issued a judgment of default and
foreclosure. After seven months elapsed, the homeowner attempted to file a motion
to vacate the default under Illinois Code of Civil Procedure Section 2-1301(e).
The homeowner withdrew the motion while attempting to negotiate a
loan modification with the lender, but then re-filed the motion after those talks failed,
two weeks after the judicial sale of the home but before the lender had
filed a motion to confirm the judicial sale.
The trial court denied the homeowner's motion, and the homeowner appealed.
The appellate court remanded the case to the trial court, ordering the
court to consider the motion under the terms of Section 2-1301(e). The
mortgage lender appealed to the Illinois Supreme Court.
Illinois Foreclosure Law applies after judicial sale
The Illinois Supreme Court reversed the appellate court, holding that the
Illinois Foreclosure Laws governs the procedure for vacating a default,
not the Code of Civil Procedure. The Code of Civil Procedure states that
it applies to the Foreclosure Law "except as otherwise provided,"
so the question that the court needed to resolve was whether it would
be inappropriate to use the Code on judicial sale procedures. The Foreclosure
Law has a test for vacating a default that is more demanding than the
test in the Code, and the court reasoned that test was more appropriate
to use after the sale has been confirmed in order to protect the interests
of the lender.
In this case, the lender had not yet moved to confirm the sale so the test
from the Code applied. However, the court held that the homeowner did
not meet the Code's test for vacating a default and denied the motion.
Speak with a lawyer
The court's opinion makes foreclosures easier to complete for lenders.
However, homeowners are not without rights. Those who are facing foreclosure
should consult a skilled foreclosure defense attorney with a history of
successfully saving homes from foreclosure. If you have questions about
foreclosure, consult an Illinois foreclosure defense attorney who can
advise you about your specific situation.