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Illinois app. Court (1st Dist) upholds denial of borrower’s evidence challenge to foreclosure sale

By on January 18, 2022 0

The Illinois First District Court of Appeals recently upheld a trial court’s order granting a mortgagee’s motion to confirm the judicial sale of a borrower’s property and denying the motion of the borrower to rescind and rescind the sale.

In this decision, the first district considered in particular that:

  • An evidentiary hearing may be conducted after a foreclosure sale where the defendant presents evidence that the sale did not comply with Illinois law.
  • The defendant must provide evidence at the hearing indicating that the sale was unfair.
  • The court of first instance may, at its discretion, deny a request for further hearing of witnesses.

A copy of the notice in BAC Home Loans Servicing, LP v. Shorts is available on: Link to Reviews.

This appeal stems from a 2010 foreclosure action. During the course of the litigation, the mortgage and note were repeatedly assigned, eventually being assigned to the respondent mortgagee who was substituted as plaintiff.

In January 2018, the trial court issued a foreclosure and sale judgment. The judgment provided that if the redemption was not made, the property would be sold at a public sale. The trial court also entered summary judgment in favor of the mortgagee and against the borrower.

The sale by judicial foreclosure was repeatedly suspended and finally proceeded on February 8, 2019. In July 2019, the mortgagee filed a motion to confirm the sale and the borrower was granted leave to file a response.

The borrower filed a petition to set aside the foreclosure judgment and to set aside the sale, arguing that because he had filed for bankruptcy before the sale, the automatic stay of bankruptcy provision should have prevented the sales office to hold the sale. In support of his petition, the borrower filed a presumptive visitor’s pass at the judicial sales office dated February 8, 2019 at 11:59 p.m., a notice of filing for bankruptcy filing indicating that his petition for bankruptcy was filed on February 8, 2019 at 11:29 a.m., and notice of stay with his signature.

In response, the mortgagee argued that the sale took place before the borrower filed for bankruptcy and therefore the sale did not take place in violation of an automatic stay of bankruptcy. In support of the petition, the mortgagee attached an email indicating that the sale took place at 10:41 a.m. on February 8, 2019.

The trial court allowed both parties to present evidence of the date of the sale. The mortgagee submitted an affidavit from the president and CEO of the sales office, stating that the sale took place at 10:41 a.m. The borrower filed a copy of a subpoena and subpoena for the secretary/receipt clerk (“clerk”) of the sales office. and a copy of the affidavit the borrower has prepared for the clerk to sign. On the affidavit was written: “need attorney’s permission to sign 10/18/2019 2:48.”

A hearing was held on the motions where the borrower said he went to the sales office after filing his bankruptcy petition and spoke with the clerk who said an offer had not had not yet been seized and that therefore the property had not been sold before he filed his petition.

The borrower requested an extension to produce the clerk as a witness. The court of first instance rejected this request and confirmed the sale for foreclosure. The trial court ruled that the Borrower’s statements about his conversation with the clerk were inadmissible hearsay and that the Borrower had not produced sufficient admissible evidence to prove that he had filed his balance sheet before the sale.

The borrower filed numerous post-judgment motions, including a motion to suspend possession, a motion to reconsider, an emergency motion, and a temporary restraining order to stay the eviction. The borrower attached to its request for reconsideration an e-mail from the sales office indicating that the affidavit prepared by the borrower could not be executed because the staff had no independent memory of the conversation or that the documents of bankruptcy had been handed over on February 8, 2019. The email further confirmed that the sale took place at 10:41 a.m.

The trial court denied the borrower’s motions, but issued an order extending the borrower’s second emergency motion to suspend possession until December 31, 2019. On December 31, 2019, the trial court instance dismissed the borrower’s motion for lack of jurisdiction on the basis of a notice of appeal filed.

On appeal, the borrower argued that the trial court abused its discretion in approving the judicial sale which was unjust under section 1508(b) of the Mortgage Foreclosure Act of the United States. Illinois and erred in denying its request to hold a hearing before confirming the sale. .

As to his first argument, the borrower argued that the foreclosure sale was unfair because it occurred after he filed for bankruptcy. He further claimed that he submitted enough allegations and evidence that he filed for bankruptcy before the foreclosure sale to warrant an evidentiary hearing. The borrower alleged that the hearing held was not an evidentiary hearing since the clerk did not appear and the mortgagee did not present any witnesses.

The First District found that the trial court’s confirmation of the foreclosure sale was not an abuse of discretion. The Court of Appeal ruled that the record supported the trial court’s decision to uphold the sale after the hearing in which the mortgagee and borrower presented arguments and evidence supporting the timing where the sale took place.

As to the Borrower’s argument that the trial court erred in rejecting its application for maintenance and that it presented sufficient allegations and evidence to justify a hearing of the evidence, the Court of call did not agree. The First District said that absent an abuse of power, this would not alter the trial court’s decision, because whether to grant or deny a motion to continue is within the proper discretion of the trial court. first case. ICD Publications, Inc. vs. Gittlitz, 2014 IL App (1st) 133277, ¶ 88.

Regarding the hearing of evidence, the First District held that a hearing of evidence could be conducted after a foreclosure sale where the defendant presents evidence that the sale did not comply with Section 15. -1508(b). The Court of Appeal clarified that this meant that the defendant must already have evidence that the sale was unfair. See Resolution Trust Corp. vs. Holtzmann, 248 Ill. App. 3d 105, 115 (1993).

Since the borrower was unable to produce any new evidence except for the alleged conversation with the clerk and the email which did not support his claim that the sale took place after 11:29 a.m., the Court of Appeal found that the trial court had reasonably considered whether granting another extension would be successful. Thus, the First District concluded that the trial court did not abuse its discretion in denying the Borrower’s new continuance application.

Accordingly, the Court of Appeal upheld the trial court’s orders affirming the foreclosure sale and denying the borrower’s continuance application.