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Illinois App. Court (1st Dist) Affirms Denial of Borrower’s Evidentiary Challenge to Foreclosure Sale

foreclosure saleThe Illinois Court of Appeals, First District, recently affirmed a trial court’s order granting a mortgagee’s motion to confirm judicial sale of a borrower’s property and denying the borrower’s motion to set aside and vacate the sale.

In so ruling, the First District among other things held that:

  • An evidentiary hearing may be conducted after a foreclosure sale where the defendant presents evidence that the sale did not comport with Illinois law.
  • The defendant must provide evidence at the hearing indicating the sale was unjust.
  • The trial court may deny a request for continuance of the evidentiary hearing in its discretion.

A copy of the opinion in BAC Home Loans Servicing, LP v. Short is available at:  Link to Opinion.

This appeal arises from a 2010 foreclosure action. During the course of the litigation, the mortgage and note were assigned numerous times, eventually being assigned to the appellee mortgagee that was substituted as plaintiff.

In January 2018, the trial court entered a judgment of foreclosure and sale. The judgment provided that if 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 judicial foreclosure sale was stayed multiple times, and finally went forward on Feb. 8, 2019. In July 2019, the mortgagee filed a motion to confirm the sale and the borrower was granted leave to file a response.

Borrower filed a motion to set aside the judgment of foreclosure and vacate the sale, arguing that, as he had filed a bankruptcy petition prior to the sale, the automatic bankruptcy stay provision should have prevented the selling office from holding the sale. In support of his motion, Borrower submitted an alleged visitor pass to the judicial sale office dated Feb. 8, 2019 at 11:59 p.m., a notice of bankruptcy case filing indicating that his bankruptcy petition was filed on Feb. 8, 2019 at 11:29 a.m., and notice of the automatic stay with his signature.

In response, the mortgagee argued that the sale occurred prior to Borrower’s filing his bankruptcy petition and therefore the sale was not held in violation of an automatic bankruptcy stay. In support of the motion, the mortgagee attached an electronic message which reflected the sale occurred at 10:41 a.m. on Feb. 8, 2019.

The trial court granted both parties leave to present evidence of when the sale occurred.  The mortgagee submitted an affidavit of the President and CEO of the selling office, averring that the sale occurred at 10:41 a.m.  Borrower filed a copy of a summons and subpoena for the front desk secretary/clerk (“Clerk”) from the selling office and a copy of the affidavit which Borrower prepared for Clerk to sign. On the affidavit was written: “need lawyer permission to sign 10/18/2019 2:48.”

A hearing was held on the motions at which Borrower stated that he had gone to the selling office after filing his bankruptcy petition and spoke with Clerk who indicated that a bid had not yet been entered and thus, the property had not been sold before he filed his petition.

Borrower requested a continuance to produce Clerk as a witness. The trial court denied this request and confirmed the judicial foreclosure sale. The trial court ruled that Borrower’s statements about his conversation with Clerk were inadmissible hearsay and Borrower had failed to produce sufficient admissible evidence to prove he had filed for bankruptcy prior to the sale.

Borrower filed numerous post-judgment motions including a motion to stay possession, motion for reconsideration, emergency motion and temporary restraining order to stay eviction. Borrower attached to his motion to reconsider, an email from the selling office which indicated that the affidavit prepared by Borrower could not be executed as the staff had no independent recollection of the conversation or that the bankruptcy documents were delivered on Feb. 8, 2019. The email further confirmed the sale occurred at 10:41 a.m.

The trial court denied Borrower’s motions but entered an order continuing Borrower’s second emergency motion to stay possession until Dec. 31, 2019.  On Dec. 31, 2019, the trial court denied Borrower’s motion for lack of jurisdiction based on a filed notice of appeal.

On appeal, Borrower argued that the trial court abused its discretion in approving the judicial sale that was unjust under section 1508(b) of the Illinois Mortgage Foreclosure Law and erred by denying his request for a continuance to hold an evidentiary hearing before confirming the sale.

As to his first argument, Borrower contended the foreclosure sale was unjust as it occurred after he filed for bankruptcy. He further asserted that he submitted sufficient allegations and evidence that he filed for bankruptcy before the foreclosure sale to warrant an evidentiary hearing. Borrower alleged the hearing held was not an evidentiary hearing as Clerk failed to 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 Appellate Court held the record supported the trial court’s decision to confirm the sale after the hearing at which both the mortgagee and Borrower presented arguments and evidence in support of when the sale took place.

As to Borrower’s argument that the trial court erred in denying his request for continuance and that he presented sufficient allegations and evidence to warrant an evidentiary hearing, the Appellate Court disagreed. The First District stated that absence an abuse of discretion, it would not disturb the trial court’s decision, as granting or denying a motion for a continuance is within the trial court’s sound discretion. ICD Publications, Inc. v. Gittlitz, 2014 IL App (1st) 133277, ¶ 88.

As to the evidentiary hearing, the First District held that an evidentiary hearing may be conducted after a foreclosure sale where the defendant presents evidence that the sale did not comport with section 15-1508(b). The Appellate Court clarified that this meant the defendant should already have evidence indicating the sale was unjust. See Resolution Trust Corp. v. Holtzman, 248 Ill. App. 3d 105, 115 (1993).

Because Borrower was unable to produce any new evidence except the alleged conversation with Clerk and the email which did not support his assertion that the sale occurred later than 11:29 a.m., the Appellate Court found the trial court reasonably questioned whether granting another continuance would be fruitful. Thus, the First District found the trial court did not abuse its discretion in denying Borrower’s further request for continuance.

Therefore, the Appellate Court affirmed the trial court’s orders confirming the foreclosure sale and denying Borrower’s request for a continuance.

Photo: alenamozhjer/

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The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.

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