Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-13-01017/USCOURTS-ca7-13-01017-0/pdf.json

Parties Involved:
HSBC Bank USA, N.A.
Appellee
Kirkland Townsend
Appellant

Document Text:

In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

No. 13‐1017

HSBC BANK USA, N.A.,

as Trustee for Nomura Home Equity Loan, Inc.,

Asset‐Backed Certificates, Series 2006‐FM1,

Plaintiff‐Appellee,

v.

KIRKLAND TOWNSEND,

Defendant‐Appellant.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 12 C 3921 — Gary S. Feinerman, Judge.

____________________

ARGUED NOVEMBER 3, 2014 — DECIDED JULY 16, 2015

____________________

Before WOOD, Chief Judge, and EASTERBROOK and

HAMILTON, Circuit Judges.

WOOD, Chief Judge. This is one of the flood of mortgage

foreclosure cases that hit the country after the 2008 economic

downturn. Before we can say anything about its merits,

however, we must decide whether an appealable final judg‐

ment is before us. That question turns out to be more com‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
2 No. 13‐1017

plicated than usual, given the many steps that must take

place before the foreclosure process is complete. Here, the

case has reached the point where the bank seeking to fore‐

close has secured a judgment of foreclosure and an order of

sale pursuant to Illinois law. The district court declared that

its judgment was “final,” but at the same time, it acknowl‐

edged that the public judicial sale could take place only after

certain additional steps were completed, including the expi‐

ration of the statutory reinstatement and redemption periods

to which the mortgagor was entitled under Illinois law. The

court also noted that it would need to hold a hearing to con‐

firm the sale (thereby allowing it to go to closing) upon a

party’s motion, and at such a hearing it could decide not to

confirm the sale if, among other things, “justice was ... not

done.”

Kirkland Townsend has brought an appeal from the rul‐

ings we have just described. Concerned about our appellate

jurisdiction, we asked the parties for additional briefing on

that point. Those briefs, plus our independent review of the

case, convince us that the appeal must be dismissed for want

of appellate jurisdiction.  

I

In 2005, Townsend signed a promissory note for $136,000

with Fremont Investment & Loan. He needed the money to

purchase a condominium in the South Shore neighborhood

of Chicago. At the same time, Townsend executed a mort‐

gage on the property, naming Mortgage Electronic Registra‐

tion Systems, Inc. (MERS) as the mortgagee. (MERS was

Fremont’s nominee.) After Townsend ceased making pay‐

ments on his mortgage in 2011, MERS assigned the mortgage

to HSBC Bank, USA; MERS remained Fremont’s nominee,

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 3

however, for a junior mortgage Fremont held in the amount

of $34,000. Shortly thereafter, HSBC filed a complaint against

Townsend in the district court asking for a judgment of fore‐

closure of the mortgage, sale of the condominium, and relat‐

ed relief under Illinois law. The district court’s subject‐matter

jurisdiction was based on diversity. See 28 U.S.C.

§ 1332(a)(1).

Representing himself, Townsend answered the com‐

plaint. HSBC then moved for summary judgment. It sup‐

ported its motion with evidence showing that Townsend

was in default; that he owed $141,425.65 on the note; and

that HSBC owned both the note and the mortgage. Town‐

send failed to respond to HSBC’s motion, and so the district

court granted it in open court on September 6, 2012. Later

that day, it entered a written judgment of foreclosure, an or‐

der finding that Townsend owed the bank $143,569.65 (rep‐

resenting principal, interest, attorney’s fees, and costs), and

an order providing for judicial sale of the property if Town‐

send did not pay before the redemption period expired. The

court wrote that the judgment was “a final and appealable

order” that was “fully dispositive” of all defendants’ inter‐

ests for purposes of Federal Rule of Civil Procedure 54(b).

At the same time, the court retained “jurisdiction over

the parties and subject matter of this cause for the purpose of

enforcing th[e] Judgment or vacating said Judgment if a re‐

instatement is made as set forth in this Judgment.” The court

acknowledged that “[u]pon motion and notice,” it would be

required to hold a hearing to confirm the judicial sale pursu‐

ant to 735 ILCS 5/15‐1508. After such a hearing, it could de‐

cide not to enter a confirmation order, if it found that appro‐

priate parties did not receive proper notice of the sale, if the

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
4 No. 13‐1017

terms of the sale were unconscionable, if the sale was con‐

ducted fraudulently, “or ... justice was otherwise not done.”

Thirty days after the order confirming the sale, the purchaser

obtains the right to possession of the property. 735 ILCS

5/15‐1508(g). (This is a good time to observe that the word

“sale” is used in several senses in the governing Illinois stat‐

utes: (1) as the formal judicially authorized event at which

people bid for the property in foreclosure—we call this the

“judicial sale” in this opinion; (2) as the confirmation of the

judicial sale—the step, resembling closing, at which the pur‐

chaser’s right to a deed is established; and (3) as the final

transfer of possession. We have attempted to be precise

about which meaning is involved at various points in our

discussion.)

Elsewhere in the judgment, the district court said that it

would appoint a special commissioner to conduct the judi‐

cial sale according to instructions in the order. The court

concluded that HSBC’s interest was superior to that of MERS

(which as we have noted was still acting on Fremont’s behalf

as nominee for its junior mortgage). It ordered that ultimate‐

ly the proceeds of the sale would be paid out according to

the terms of the judgment and 735 ILCS 5/15‐1512. The

judgment also provided that if the proceeds of a confirmed

sale came up short, a deficiency judgment would be entered

against Townsend for the difference.

After the parties submitted their briefs on Townsend’s pro

se appeal of the district court’s foreclosure judgment, we or‐

dered supplemental briefing on the question of appellate ju‐

risdiction. We asked the parties to address whether (1) the

district court improperly certified its judgment as final un‐

der Rule 54(b); (2) its judgment qualified as an appealable

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 5

injunction under 28 U.S.C. § 1292(a); or (3) the doctrine of

Forgay v. Conrad, 47 U.S. (6 How.) 201 (1848), supported ju‐

risdiction. We recruited attorney Kenneth J. Vanko to repre‐

sent Townsend, and we are grateful to him for his able ser‐

vice to his client and the court, and to all counsel for the

helpful supplemental briefs.

II

We consider first whether we may hear Townsend’s ap‐

peal under the final judgment rule expressed in 28 U.S.C.

§ 1291. That provision states that the courts of appeals “shall

have jurisdiction of appeals from all final decisions of the

district courts of the United States.” As the Supreme Court

recently reiterated, “[a] party can typically appeal as of right

only from [a] final decision.” Bullard v. Blue Hills Bank, 135 S.

Ct. 1686, 1691 (2015). The first question before us is whether

the district court’s disposition of Townsend’s case was final

for purposes of section 1291.

Although section 1291 should be given “a practical rather

than a technical construction,” the law’s “core application is

to rulings that terminate an action.” Gelboim v. Bank of Am.

Corp., 135 S. Ct. 897, 902 (2015) (quotations omitted). Such a

decision “ends the litigation on the merits and leaves noth‐

ing for the court to do but execute the judgment.” Catlin v.

United States, 324 U.S. 229, 233 (1945). Several aspects of the

district court’s ruling in this case convince us that it fails to

meet this standard.  

When all is said and done, the district court’s judgment of

foreclosure and order to conduct a judicial sale leave too

much up in the air for us to regard the action as terminated,

with nothing left but the mechanical details of collection or

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
6 No. 13‐1017

other enforcement measures. Illinois law specifies the vari‐

ous steps that must be taken; it is the governing law in this

diversity action, and so we must see how the district court’s

actions fit into the regime Illinois creates for foreclosures.

Like many states, Illinois protects mortgagors in foreclosure

by giving them statutory periods of both redemption and

reinstatement. The reinstatement statute permits the mort‐

gagor to “reinstate the mortgage” by “curing all defaults

then existing.” At that point, “the foreclosure and any other

proceedings for the collection or enforcement of the obliga‐

tion secured by the mortgage shall be dismissed and the

mortgage documents shall remain in full force and effect as

if no acceleration or default had occurred.” 735 ILCS 5/15‐

1602. The redemption statute speaks of the mortgagor’s abil‐

ity to “redeem the real estate from the foreclosure,” 735 ILCS

5/15‐1603(f)(1), and states that upon receiving the amount

owed, the mortgagee “shall promptly furnish the mortgagor

with a release of the mortgage or satisfaction of the judg‐

ment, as appropriate, and the evidence of all indebtedness

secured by the mortgage shall be cancelled.” 735 ILCS 5/15‐

1603(f)(3).

This language indicates that the exercise of the right of ei‐

ther reinstatement or redemption has the potential to undo

the foreclosure, scuttling the need for the process of execut‐

ing the judgment. The district court was well aware of this:

its foreclosure judgment explicitly incorporates these statu‐

tory rights, stating that “[t]he subject real estate shall be sold

pursuant to statute at the expiration of both the reinstate‐

ment period and the redemption period.” This language in‐

dicates that the expiration of both of these periods—an event

that will occur if a mortgagor fails to exercise either right—is

a condition that must be satisfied before the initial judicial

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 7

sale of the foreclosed property may proceed; closing, con‐

firmation, and transfer cannot take place until the successful

bidder is identified. As the Supreme Court noted years ago,

“[a] question remaining to be decided after an order ending

litigation on the merits does not prevent finality if its resolu‐

tion will not alter the order or moot or revise decisions em‐

bodied in the order.” Budinich v. Becton Dickinson & Co.,

486 U.S. 196, 199 (1988). But if the resolution of the outstand‐

ing question will either alter the order or moot or revise the

resolution of the case, finality is lacking. In every case decid‐

ed under Illinois law, entry of the foreclosure judgment

marks the beginning of a period in which critical matters

remain to be resolved: whether the mortgagor will exercise

her statutory redemption and reinstatement rights, and,

should a judicial sale occur, whether it complies with all

statutory requirements.  

Other aspects of Illinois law point in the same direction.

The law expressly provides for a post‐judicial‐sale inquiry

into whether “justice was otherwise not done” by the auc‐

tion. 735 ILCS 5/15‐1508(b)(iv). The same provision directs

the court on motion to determine whether proper notice of

the sale was given and whether the sale was conducted

fraudulently or with unconscionable terms. If the court finds

any of these things to be true, it need not confirm the sale.

Confirmation is therefore a critical step. Not until the court

confirms the sale triggered by the judgment of foreclosure

may it enter a deficiency judgment against the mortgagor.

Damages are part of the judgment and essential to finality;

lack of quantified damages prevents an appeal. See Liberty

Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 744 (1976) (“[W]here as‐

sessment of damages or awarding of other relief remains to

be resolved have never been considered to be ‘final’ within

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
8 No. 13‐1017

the meaning of 28 U.S.C. § 1291.”).

A number of questions remain about the damages Town‐

send will have to pay. The amount that the judicial sale

yields depends not only on the price obtained at the auction

but also on, for example, whether the auction was conducted

in a commercially reasonable way to maximize the price. If it

was not, the court might confirm the sale but decline to enter

a deficiency judgment. See 735 ILCS 5/15‐1508(b)(2). A mort‐

gagor might protest that an auction delivering far below the

amount specified in the foreclosure judgment was not con‐

ducted in the way most likely to attract a high bid. The dis‐

trict judge must then evaluate that assertion. If the judge de‐

cides that better advertising or other measures would have

produced a bid closer to the full amount owed, he might ei‐

ther cut or deny any deficiency judgment. If there are serious

defects in the auction, then the district court has the authori‐

ty not to confirm the sale at all, and transfer of possession

will never occur. The deficiency judgment amount might al‐

so depend on how much time elapses between the district

court’s sale order (which quantifies the debt at that moment)

and the purchaser’s payment of the price at the auction. The

longer the delay, the more prejudgment interest must be

added under the terms of the note. This process is far from

mechanical. No one can know the amount of this part of the

court’s judgment until the asset has been exchanged for

money. That is fatal to finality.

Our dissenting colleague criticizes our description of Illi‐

nois law; he argues that Illinois courts have no discretion to

reduce deficiency judgments. In taking the position that a

deficiency judgment must, as a matter of law, be the differ‐

ence between the default amount and the foreclosure sale

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 9

price, however, our colleague principally relies on a case that

cites a repealed section of the Illinois code. See Illini Fed. Sav.

& Loan Ass’n v. Doering, 516 N.E.2d 609 (Ill. App. Ct. 1987)

(quoting Ill. Rev. Stat. 1985, ch. 110, par. 15‐112 (repealed

1987)). Even in Illini, the court acknowledged that the defi‐

ciency judgment should reflect the property’s sale price “ab‐

sent any fraud or irregularity in the foreclosure proceeding.”

516 N.E.2d at 611. The potential for irregularity is exactly

what concerns us here. And in any event, the current version

of the law (which applied at the time of the events here)

gives courts discretion over deficiency judgments. A judge’s

order confirming a foreclosure sale “may also ... provide for

a personal judgment against any party for a deficiency.” 735

ILCS 5/15‐1508(b)(2); see also 735 ILCS 5/15‐1508(f) (“If the

order confirming the sale includes a deficiency judgment ...

.”) (emphases added in both). The statute uses the same dis‐

cretionary language to discuss the amount of the judgment:

the “judgment may be entered for any balance of money that

may be found due to the plaintiff, over and above the pro‐

ceeds of the sale or sales.” 735 ILCS 5/15‐1508(e) (emphasis

added). At most, some ambiguity may be introduced when

the statute later states that a “court shall also enter” a defi‐

ciency judgment in a confirmation order. Id. Even that com‐

mand is qualified, however, because the amount requested

must be “proven” and the court must be “otherwise author‐

ized” to enter the judgment. Id. The latter two safety valves

logically refer back to the court’s ability to evaluate the fair‐

ness of the foreclosure process.  

Nothing in the district court’s foreclosure and judicial‐

sale order in this case gives us reason to think that the re‐

maining steps are so ministerial, inevitable, or unrelated to

the merits of the case that they do not defeat finality. We take

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
10 No. 13‐1017

as a given that many orders confirming post‐foreclosure ju‐

dicial sales proceed without a hitch (at least from the bank’s

perspective). But that does not mean that the rights of re‐

demption and reinstatement, or the court’s review of the

auction process, are meaningless. The Supreme Court of Illi‐

nois has said that the provision of section 15‐1508(b)(iv) re‐

quiring review to see if “justice was otherwise not done”

“acts as a safety valve to allow the court to vacate the judicial

sale and, in rare cases, the underlying judgment.” Wells Fargo

Bank, N.A. v. McCluskey, 999 N.E.2d 321, 329 (Ill. 2013). Nei‐

ther the percentage of cases in which this is found nor the

narrowness of the legal standard matter: finality does not

depend on the odds. The question is whether the existence of

these rights, which are embedded within Illinois’s foreclo‐

sure scheme, renders a foreclosure and judicial‐sale order

non‐final, when the sale is yet to be conducted and confirma‐

tion has not yet occurred. We believe that it does.

Finally, we note that our understanding of these statutes

matches that of the Illinois courts. The Supreme Court of Il‐

linois has said that it is “well settled” that a foreclosure

judgment is not a final judgment “because it does not dis‐

pose of all issues between the parties and it does not termi‐

nate the litigation.” EMC Mortg. Corp. v. Kemp, 982 N.E.2d

152, 154 (Ill. 2012). The court explained that “although a

judgment of foreclosure is final as to the matters it adjudi‐

cates, a judgment foreclosing a mortgage, or a lien, deter‐

mines fewer than all the rights and liabilities in issue because

the trial court has still to enter a subsequent order approving

the foreclosure sale and directing distribution.” Id. Though

the state’s view of finality for state‐law purposes does not

dictate the result for federal appellate jurisdiction, the Illi‐

nois court’s list of open questions is independently useful.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 11

In sum, there are several events in Illinois that can or

must occur between a foreclosure judgment entered pursu‐

ant to Illinois law and an eventual exchange of property for

money and deficiency judgment. An order of foreclosure

and judicial sale by itself, such as the one issued in Town‐

send’s case, is thus not a final judgment under 28 U.S.C.

§ 1291.

III

Although we do not have jurisdiction to hear Townsend’s

appeal under traditional finality doctrine, we still must ask

whether there is some other basis of appellate jurisdiction.

Three theories deserve a look, as our briefing order implied:

first, the possibility that the court’s order was final as a “sep‐

arate claim” under Federal Rule of Civil Procedure 54(b);

second, the possibility that this is in effect an injunction eli‐

gible for interlocutory appeal under 28 U.S.C. § 1292(a)(1);

and third, whether it may be immediately appealable under

the doctrine announced in Forgay v. Conrad, 47 U.S. (6 How.)

201 (1848). We address each of these questions in turn.

A

The district court here certified the judgment of foreclo‐

sure and sale as final and appealable under Federal Rule of

Civil Procedure 54(b). That does not dispose of the question,

however; this court must consider for itself whether the

judgment satisfies the requirements of that rule. Marseilles

Hydro Power, LLC v. Marseilles Land & Water Co., 518 F.3d 459,

464 (7th Cir. 2008); see also Wetzel, 424 U.S. at 740 (rejecting

Rule 54(b) certification). The operative language of Rule

54(b) is as follows: “When an action presents more than one

claim for relief ... or when multiple parties are involved, the

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
12 No. 13‐1017

court may direct entry of a final judgment as to one or more,

but fewer than all, claims or parties only if the court express‐

ly determines that there is no just reason for delay.”

There are two problems with the district court’s Rule

54(b) certification. First, the district court’s judgment left no

claims unaddressed; any issues that may arise after this

judgment form part of the main claim, not an independent

one. By its terms, Rule 54(b) does not apply when there is no

separate claim remaining to be decided. See Wetzel, 424 U.S.

at 742–43. Second, Rule 54(b) requires an express determina‐

tion that there is no just reason for delay, and we find none

on the record. Even if there were multiple claims or multiple

parties, Rule 54(b) is unavailable without that certification.

See Constr. Indus. Ret. Fund of Rockford v. Kasper Trucking, Inc.,

10 F.3d 465, 467–68 (7th Cir. 1993).

B

The next possibility requires us to decide whether the or‐

der directing the judicial sale of the property amounts to an

injunction for purposes of 28 U.S.C. § 1292(a)(1). That statute

authorizes interlocutory appeals from orders “granting, con‐

tinuing, modifying, refusing or dissolving injunctions, or re‐

fusing to dissolve or modify injunctions.” We have taken

care to construe this provision narrowly to avoid opening a

floodgate to piecemeal appeals. Albert v. Trans Union Corp.,

346 F.3d 734, 737 (7th Cir. 2003); see also Tradesman Int’l, Inc.

v. Black, 724 F.3d 1004, 1011 (7th Cir. 2013). With that concern

in mind, we have declined to characterize a decree foreclos‐

ing a mortgage and ordering sale as an injunction within the

meaning of § 1292(a)(1). See United States v. Hansen, 795 F.2d

35, 38–39 (7th Cir. 1986). Though a decree of foreclosure is an

equitable remedy, we have made clear that “[n]ot every equi‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 13

table order is an injunction for purposes of section

1292(a)(1),” and have concluded that foreclosure judgments

fall outside of § 1292(a)(1)’s limits. Id. While it is apparent

that foreclosure on a residence can eventually cause irrepa‐

rable harm, Illinois courts and federal courts both are em‐

powered to use stays pending appeal to manage the risk of

such harm by erroneous decisions. Compare Bullard, 135 S.

Ct. at 1695–96 (acknowledging that some bankruptcy con‐

firmation orders may have “immediate and irreversible ef‐

fects,” but nonetheless holding that an immediate appeal

was unavailable and pointing out that several mechanisms

to address such harm are available). We see no reason to de‐

part from Hansen’s holding and thus decline to exercise ju‐

risdiction to hear Townsend’s appeal under § 1292(a)(1).

C

We turn finally to the finality rule described in Forgay v.

Conrad. That case, whose facts starkly remind the reader that

times have changed, arose from a bankruptcy in Louisiana.

The debtor had deeded away real estate and slaves in New

Orleans, but the trial court had set aside those deeds as

fraudulent transfers. Most importantly for present purposes,

the trial court had then ordered that the real estate and

slaves be delivered immediately to the person we would

now call the trustee in bankruptcy. On appeal, the first issue

was whether the transfer order was appealable. In an opin‐

ion by Chief Justice Taney, the Supreme Court denied a mo‐

tion to dismiss the appeal. The Court held that the order was

appealable because the parties in current possession of the

real estate and slaves faced a threat of irreparable harm if an

immediate appeal were not allowed. Forgay, 47 U.S. (6 How.)

at 202–04.  

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
14 No. 13‐1017

We have interpreted Forgay to allow immediate review of

an order “directing delivery of property where such an order

would subject the losing party to irreparable harm.” United

States v. Davenport, 106 F.3d 1333, 1335 (7th Cir. 1997). The

irreparable harm requirement avoids an unduly broad read‐

ing of Forgay under which “any order requiring immediate

payment also is immediately appealable.” Cleveland Hair

Clinic, Inc. v. Puig, 104 F.3d 123, 126 (7th Cir. 1997).

When it comes to the forced sale of a residence, we can

assume that the potential for irreparable harm is great. See

Davenport, 106 F.3d at 1335. But under the Forgay doctrine,

the issue for us is whether and when Townsend would face an

imminent threat of irreparable harm if the judgment order‐

ing foreclosure and judicial sale were not appealable. That

question calls for a close examination of Illinois law and the

procedures the district court would use to carry out the fore‐

closure and sale. See Aurora Loan Servs., Inc. v. Craddieth,

442 F.3d 1018, 1026 (7th Cir. 2006) (looking to state law set‐

tling title to property to determine when purchaser rights

irreversibly attached); see also FED. R. CIV. P. 69 (borrowing

state procedures to execute federal court judgments).

Under Illinois law, the judgment of foreclosure and judi‐

cial sale posed no imminent threat of irreparable harm to

Townsend. His interests are protected in several ways. First,

a mortgagor may be able to take advantage of the redemp‐

tion and reinstatement period before the judicial sale. See

Kling v. Ghilarducci, 121 N.E.2d 752, 756 (Ill. 1954). As we al‐

ready have discussed, the sale cannot be conducted until this

time has run. See 735 ILCS 5/15‐1507(b).

After the judicial sale, the mortgagor is a big step closer

to loss of his residence, but still not there. The interests in the

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 15

property of all persons made party to the foreclosure “shall

be terminated by the judicial sale of the real estate, pursuant

to a judgment of foreclosure, provided the sale is con‐

firmed.” 735 ILCS 5/15‐1404; see also McCluskey, 999 N.E.2d

at 330 (noting that it is the confirmation of sale that “divests

the borrower of her property rights”). Immediately after the

judicial sale and payment in full of the amount bid, the pur‐

chaser receives only a “certificate of sale.” See 735 ILCS 5/15‐

1507(f). (In residential foreclosures the defaulting mortgag‐

or‐owner has a special, final thirty‐day period for redemp‐

tion when “the purchaser at the sale was a mortgagee who

was a party to the foreclosure,” i.e., when a lender purchases

the property, typically with a credit bid, for less than the

amount needed to redeem. See 735 ILCS 5/15‐1604(a).)  

The transfer of rights memorialized by the certificate of

sale becomes permanent only if the judicial sale is con‐

firmed. Only after confirmation does the purchaser obtain a

deed. 735 ILCS 5/15‐1509(a). The deed passes title to the pur‐

chaser, 735 ILCS 5/15‐1509(b), and serves as “an entire bar of

... all claims of parties to the foreclosure,” 735 ILCS 5/15‐

1509(c). Yet even then a mortgagor can delay the permanent

transfer of title to the purchaser by obtaining a stay pending

appeal of the order confirming sale. See ILL. SUP. CT. R. 305(k)

(under substantive state law, non‐party purchasers gain

property rights that are not impaired by reversal on appeal

unless the sale is stayed); Aurora, 442 F.3d at 1026–27 (apply‐

ing Illinois law and finding that “in the absence of a stay, a

sale of real property to a third party bars an appeal from the

judgment authorizing the sale”); Hansen, 795 F.2d at 39 (sug‐

gesting that defendants could avoid irreparable harm from

sale by seeking a stay of the decree of sale); FDIC v. Meyer,

781 F.2d 1260, 1263 (7th Cir. 1986) (in absence of stay, sale to

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
16 No. 13‐1017

good faith purchaser moots appeal); Horvath v. Loesch,

410 N.E.2d 154, 158 (Ill. App. Ct. 1980). So long as a stay is in

place, a purchaser at a foreclosure sale is obliged to return

the property if the judgment of foreclosure is reversed on

appeal. See Wash. Mut. Bank, F.A. v. Archer Bank, 895 N.E.2d

677, 680 (Ill. App. Ct. 2008) (permitting review of “all earlier

nonfinal orders that produced the final judgment” embodied

in the orders confirming the sale).

Thus, under Illinois mortgage foreclosure law, a mort‐

gagor‐owner who is residing in the property and taking care

of it should not face the kind of immediate irreparable harm

required by Forgay until there is time to file an appeal and to

seek a stay of the final order confirming the judicial sale.

Such an owner will ordinarily be entitled to retain posses‐

sion of the property until thirty days after confirmation of

the foreclosure sale. 735 ILCS 5/15‐1701(b)(1) & (c). (The

statute also provides for exceptions when needed to protect

the interests of the lender.) Under the Forgay doctrine, the

issue is whether an immediate appeal is needed to prevent

irreparable harm resulting from an immediate transfer of

possession of the property. Illinois law provides a number of

protections against irreparable harm, even though orders of

foreclosure and judicial sale are not immediately appealable

in state practice. Similarly, federal courts at every level have

the authority to stay the effect of a judgment pending ap‐

peal, see FED. R. CIV. P. 62, and so there is no need here to in‐

voke the Forgay doctrine to allow an immediate appeal.

In light of this conclusion, we have no reason to reach the

question whether the Supreme Court’s decision in Mohawk

Industries, Inc. v. Carpenter, 558 U.S. 100 (2009), overruled the

Forgay doctrine. While there is some tension between the

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 17

Forgay doctrine and Mohawk Industries, see 558 U.S. at 106,

and that tension has been reinforced by Bullard, the Court

has not told us that Forgay has been overruled, and only it

has the prerogative of overruling its own decisions. E.g.,

Nat’l Rifle Ass’n of Am., Inc. v. City of Chicago, 567 F.3d 856,

857–58 (7th Cir. 2009), rev’d sub nom. McDonald v. City of Chi‐

cago, 561 U.S. 742 (2010), quoting Rodriguez de Quijas v. Shear‐

son/Am. Express, Inc., 490 U.S. 477, 484 (1989).

IV

For all these reasons, we conclude that we do not have ju‐

risdiction to hear this appeal, which is therefore DISMISSED.

Because the district court’s entry of the Rule 54(b) judgment

compelled Townsend to appeal when he did, however, we

order that the costs on appeal will be assessed against HSBC.

See FED. R. APP. P. 39(a).

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
18 No. 13‐1017   

HAMILTON, Circuit Judge, dissenting. I view the district

court’s judgment of foreclosure as final under 28 U.S.C.

§ 1291. Rather than dismiss the appeal, I would affirm on the

merits. Under long‐established finality principles, a foreclo‐

sure judgment is final if it (a) settles the merits and the total

amount of the debt, (b) identifies the property to be sold to

satisfy the judgment, and (c) orders the priority of compet‐

ing claims to the sale proceeds. See, e.g., Whiting v. Bank of

the United States, 38 U.S. (13 Pet.) 6, 15 (1839), and cases fol‐

lowing it.

The judgment of foreclosure here does all of those things.

All that remains in this litigation is executing that judgment

by judicial sale of the property securing the debt and dis‐

tributing the sale proceeds. For two centuries American ap‐

pellate practice has distinguished between a judgment on

the merits and later matters of execution, holding that open

issues involving execution do not defeat finality of the un‐

derlying judgment on the merits. That settled approach to

finality works. We should not upset it with the novel ap‐

proach of uncertain scope adopted by the majority.

I agree with my colleagues, though, that Federal Rule of

Civil Procedure 54(b), 28 U.S.C. § 1292, and the doctrine an‐

nounced in Forgay v. Conrad, 47 U.S. (6 How.) 201 (1848), do

not authorize this appeal. Our disagreement is about wheth‐

er the need to execute the judgment of foreclosure by carry‐

ing out the court‐ordered sale prevents an immediate appeal

of the judgment of foreclosure under traditional § 1291 prin‐

ciples.

Part I of this opinion explains the general rule: a judg‐

ment resolving all claims on the merits is final and appeal‐

able even if it remains to be executed with the court’s assis‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 19

tance. That remains true even if a second appeal regarding

the execution is possible. One specialized application of that

general rule is that a judgment of foreclosure that resolves

the amount of the debt and orders sale of the mortgaged

property is a final judgment. The Supreme Court has fol‐

lowed this approach to mortgage foreclosures since the ear‐

liest days of our Republic. Prior decisions of this and other

circuits have long followed this approach.  

With fair warning to readers, Part II digs into the weeds

of the execution process under Illinois foreclosure law that

have persuaded my colleagues that this judgment of foreclo‐

sure is not yet final. If we look past the jargon of mortgage

cases, we see that the statutory provisions for redemption

and reinstatement are merely specialized instances of the

right any defendant has to satisfy a judgment voluntarily be‐

fore it is executed. Potential disputes about the fairness of a

judicial sale do not undermine finality here any more than

do analogous disputes in other proceedings to execute

judgments. The routine arithmetic needed to calculate the

amount of a deficiency judgment or post‐judgment interest

also does not undermine finality when those calculations fol‐

low mechanically from a judgment that determines the total

amount owed and the priorities of creditors.  

Finally, Part III explains briefly why the district court did

not err by granting summary judgment in favor of HSBC on

the merits of its claim against appellant Townsend, who de‐

faulted on his residential mortgage loan.  

Before diving into the details, though, I’ll try to explain

why this issue of appellate jurisdiction is worth an admitted‐

ly lengthy dissent. What difference does it make whether a

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
20 No. 13‐1017

borrower in Townsend’s position must wait longer to appeal

as long as he is able to appeal in the end?

First, the majority’s novel decision upends about two cen‐

turies of federal precedent and practice on finality for pur‐

poses of appeal. Courts applying § 1291 and its cousins have

recognized the difference between a judgment on the merits

and the decisions needed to execute that judgment. The dis‐

tinction between these phases of the litigation is established

and familiar. It works.  

The majority’s decision adopts an uncertain standard that

collapses that distinction, at least for mortgage foreclosures.

In the majority’s view, it is not enough for the merits of a

dispute to be finally resolved. The majority also requires that

all issues relating to execution be resolved in the district

court before the underlying judgment on the merits is ap‐

pealable. This reasoning either (a) commits our circuit to us‐

ing different finality rules when we consider mortgage fore‐

closures, or (b) signals that appeals from other judgments

that have also long been considered final will need a fresh

look.  

In either case, the majority’s approach will impose confu‐

sion, uncertainty, and expense where the law is not broken

and needs no fixing. See Republic Natural Gas Co. v. Oklahoma,

334 U.S. 62, 69 (1948) (“The considerations that determine

finality are not abstractions but have reference to very real

interests—not merely those of the immediate parties, but

more particularly, those that pertain to the smooth function‐

ing of our judicial system.”). Even if future cases limit the

majority’s reasoning to mortgage cases, the practical effect

will still be substantial. Federal district courts handle thou‐

sands of mortgage foreclosure cases every year, roughly ten

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 21

per district judge per year. See Judicial Business of the Unit‐

ed States Courts, Annual Report of the Director tbl. C‐2

(2014).

Adding to the uncertainty, the majority bases its decision

on a novel view of substantive Illinois law. When a valid

foreclosure sale leaves a deficiency in the amount owed on

the judgment, Illinois law entitles the lender to a judgment

against the borrower personally for the deficiency. Yet the

majority finds (ante at 8–9) that Illinois judges have discre‐

tion to decline to award deficiency judgments against bor‐

rowers when a foreclosure sale fails to cover the total

amount of the debt. As explained below in Part II–D, I be‐

lieve that view of Illinois law is mistaken and will come as

quite a surprise to the Illinois bar and bench.

I would be less troubled by the majority’s approach if it

minimized the uncertainty by announcing a bright‐line rule

on the finality of foreclosure judgments. See Budinich v. Bec‐

ton Dickinson & Co., 486 U.S. 196, 202 (1988) (stressing the

importance of adopting “bright‐line” appellate jurisdiction

rules to ensure uniformity and predictability); Kennedy v.

Wright, 851 F.2d 963, 967 (7th Cir. 1988) (citing Budinich and

collecting cases making same point in our circuit); Exchange

Nat’l Bank of Chicago v. Daniels, 763 F.2d 286, 292 (7th Cir.

1985) (“The first characteristic of a good jurisdictional rule is

predictability and uniform application.”). No such clear rule

can be divined from the piecemeal approach adopted here.

The majority opinion does not tell us what to do in a case

presenting only one or two of the three issues it thinks defeat

finality.

Second, the different approaches to appellate jurisdiction

have significant practical and economic consequences for all

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
22 No. 13‐1017

parties in the foreclosure litigation. Let’s assume that a bor‐

rower has a good defense on the merits but loses in the trial

court. Under the majority’s approach, she cannot obtain ap‐

pellate review of the judgment until after her home has been

sold at auction, after the trial court has confirmed that sale,

and after a buyer has deposited cash and stands ready to

take possession. To preserve her right to appeal, the borrow‐

er with the good defense must ask for and obtain a stay

pending appeal. See Ill. Sup. Ct. R. 305(k) (under substantive

state law, non‐party purchasers gain property rights that are

not impaired by reversal on appeal unless the sale is stayed);

Horvath v. Loesch, 410 N.E.2d 154, 158 (Ill. App. 1980); Aurora

Loan Services, Inc. v. Craddieth, 442 F.3d 1018, 1026–27 (7th Cir.

2006) (under Illinois law, “in the absence of a stay, a sale of

real property to a third party bars an appeal from the judg‐

ment authorizing the sale”). The possibility of such stays is

enough to avoid application of the Forgay doctrine, as the

majority explains, but it remains to be seen whether district

courts and our court will grant such stays routinely. I hope

they will, but it is not a foregone conclusion.

Third, even if we assume that the harshest effects of the

majority’s approach on borrowers will be mitigated by rou‐

tine stays pending appeal, I suspect the economic result will

be negative for both borrowers and lenders. Consider the

bidding behavior of outside buyers at auctions that take

place at two different stages: (a) after the merits of the fore‐

closure have been settled with a final judgment and the con‐

clusion of any appeal; or (b) while the merits of the foreclo‐

sure are still subject to appeal. Basic economic principles

suggest that, all other things being equal, a buyer should be

willing to pay more at stage (a) than at (b). The buyer at

stage (b) may need to keep the bid open for months or even

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 23

years, sharply limiting other uses of the money in the mean‐

time. The result should be lower bid prices in auctions, to the

detriment of both lenders and borrowers. See United States v.

Buchman, 646 F.3d 409, 410 (7th Cir. 2011) (“If buyers believe

that the parcels they acquire at auction can be snatched back

whenever they have made a good deal, they will pay less at

foreclosure sales—and borrowers such as Buchman will be

worse off as a result.”); Aurora Loan Services, 442 F.3d at 1028,

citing Michael H. Schill, An Economic Analysis of Mortgagor

Protection Laws, 77 Va. L. Rev. 489, 534 (1991). And where a

foreclosure is set aside on the merits after a court‐ordered

sale, the expense and effort of the sale and its confirmation

will all be for naught. I turn now to the details of the legal

analysis.

I. Merits v. Execution: Finality Doctrine Under § 1291

Section 1291 provides that the “courts of appeals ... shall

have jurisdiction of appeals from all final decisions of the

district courts of the United States.” The Supreme Court has

defined a final decision in general terms as “one that ends

the litigation on the merits and leaves nothing for the court

to do but execute the judgment.” Ray Haluch Gravel Co. v.

Central Pension Fund of Int’l Union of Operating Engineers and

Participating Employers, 571 U.S. —, 134 S. Ct. 773, 779 (2014),

citing Caitlin v. United States, 324 U.S. 229, 233 (1945). The

judgment of foreclosure here ended this litigation on the

merits and left nothing for the court to do but execute the

judgment.

Finality in a mortgage foreclosure case is best understood

as a specialized application of more general rules of finality

that apply in the simpler case of a suit on an unsecured debt.

See In re Sorenson, 77 F.2d 166, 167 (7th Cir. 1935) (making

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
24 No. 13‐1017

this comparison and holding that judgment foreclosing

mortgage and ordering sale was “final decree” that barred

bankruptcy injunction).

Pared down to the basics: Suppose P sues D for breach of

a promissory note. P wins a judgment ordering D to pay X

dollars to P. That judgment is final and appealable. It is final

and appealable even though D may choose simply to pay the

judgment, and even though, if D does not pay, P may need

the court’s help to identify D’s property and then to seize

and sell it to satisfy the judgment. The judgment is final even

if we do not yet know exactly how the judgment will be exe‐

cuted. See Fed. R. Civ. P., Forms 70 & 71; JPMorgan Chase

Bank, N.A. v. Asia Pulp & Paper Co., Ltd., 707 F.3d 853, 857,

861–62, 867–68 (7th Cir. 2013) (resolving dispute about mer‐

its of claims on promissory note even though district court in

post‐judgment proceedings had issued later asset discovery

order that was itself not immediately appealable); see gener‐

ally 15B Wright & Miller, Federal Practice and Procedure

§ 3916 (2d ed.) (discussing appellate jurisdiction over post‐

judgment orders).  

Now suppose the promissory note is secured by collat‐

eral. The key difference is that the lender has laid the

groundwork for easier, more streamlined execution of any

judgment needed to collect the debt. There is no need to

search out the debtor’s property. By agreement, the property

securing payment has been identified in advance. By the

same agreement, the lender has also been granted a priority

for its claim over those of other creditors who might want to

seize the same property to pay off their loans to the same

borrower.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 25

With a secured loan, the fact that the property available

for execution has already been identified does not prevent

the underlying judgment on the merits (“D shall pay P the

sum of X Dollars”) from being final and appealable. Nor

does it matter that the judgment in such cases stays execu‐

tion for a limited time to give the defendant a chance to

avoid the sale by making the plaintiff whole through rein‐

statement, redemption, or a settlement. Cf. Fed. R. Civ. P.

62(a) (staying execution of judgments for 14 days, without

delaying time for appeal); Soo Line R. Co. v. Escanaba & Lake

Superior R. Co., 840 F.2d 546, 550 (7th Cir. 1988) (judgment

awarding a specified amount of money was final even

though plaintiff could not demand immediate payment and

payment was contingent on arbitrator decision).

Over more than two centuries, the Supreme Court has

applied these basic principles to hold judgments foreclosing

mortgages and ordering the sale of the property securing the

loans are final and appealable before a judicial sale and its

confirmation take place. In Whiting v. Bank of United States, 38

U.S. (13 Pet.) 6, 15 (1839), a mortgage had been foreclosed

and the property had been sold. Heirs of the borrower then

sought to set aside both the foreclosure and the sale. Writing

for the Court, Justice Story considered the question of finali‐

ty and said that the issue depended on

whether the decree of foreclosure and sale is to

be considered as the final decree in the sense of

a Court of Equity, and the proceedings on that

decree a mere mode of enforcing the rights of

the creditor, and for the benefit of the debtor;

or whether the decree is to be deemed final on‐

ly after the return and confirmation of the sale

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
26 No. 13‐1017

by a decretal order of the Court. We are of opin‐

ion that the former is the true view of the matter.

The original decree of foreclosure and sale was final

upon the merits of the controversy.

38 U.S. at 15 (emphasis added).

The Court had applied the same rule long before Whiting,

holding simply that “a decree for a sale under a mortgage, is

such a final decree as may be appealed from.” Ray v. Law, 7

U.S. (3 Cranch) 179, 180 (1805). The Court has repeated the

point many times since. E.g., Grant v. Phoenix Mutual Life Ins.

Co., 106 U.S. 429, 431 (1882) (“[A] decree of sale in a foreclo‐

sure suit, which settles all the rights of the parties and leaves

nothing to be done but to make the sale and pay out the pro‐

ceeds, is a final decree for the purposes of an appeal.”);

McGourkey v. Toledo & Ohio Cent. Ry. Co., 146 U.S. 536, 545

(1892) (“[I]t is clear that a decree is final, though the case be

referred to a master to execute the decree by a sale of proper‐

ty or otherwise, as in the case of the foreclosure of a mort‐

gage.”).

Thus, the general rule in American law has long been

that once a judgment of foreclosure and sale is entered, it is

final because all that remains to be done is executing the

judgment to enforce the rights and obligations that have

been adjudicated.

Now it’s true that some foreclosure orders are not final

and appealable, but that’s because they leave undecided

questions going to the merits of the dispute. In essence,

those judgments are not final because they leave the X in “D

shall pay P the sum of X Dollars” undefined or subject to

change.  

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 27

For example, even if liability is decided, a foreclosure or‐

der is not truly final if it “leaves the amount due upon the

debt to be determined, and the property to be sold ascer‐

tained and defined.” McGourkey, 146 U.S. at 545–46, 550 (or‐

der not final because it directed master to determine rents,

profits, and damages to railroad’s rolling stock, even though

it also ordered turnover of property); see also Grant, 106 U.S.

at 431 (order not final because it referred case to an auditor

to “ascertain the amount due upon the debt, the amount due

certain judgment and lien creditors, the existence and priori‐

ties of liens, and the claims for taxes”); North Carolina R. Co.

v. Swasey, 90 U.S. (23 Wall.) 405, 409–10 (1874) (order not fi‐

nal when the amount of the debt and property to be sold

were not specified). So too when the order “merely deter‐

mines the validity of the mortgage, and, without ordering a

sale, directs the case to stand continued for further decree

upon the coming in of the master’s report.” McGourkey, 146

U.S. at 545; see also Burlington, C.R. & N. Ry. Co. v. Simmons,

123 U.S. 52, 54 (1887) (order not final where validity of lien

on mortgage was established but amounts due to parties had

not been fixed and court expected further action before it

could carry decree into effect).

If the majority’s view in this case were correct, all of these

cited opinions should have been much shorter: the appeals

should have been dismissed simply because the foreclosure

sales had not yet been carried out and confirmed. Instead,

though, the Court focused on the details of the undecided

merits issues. These examples are also consistent with the

more general rule that a judgment is not final where it estab‐

lishes the defendant’s liability but the amount of damages

remains undecided. See, e.g., Liberty Mutual Ins. Co. v. Wetzel,

424 U.S. 737, 742 (1976).  

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
28 No. 13‐1017

These principles are so well established that case law ad‐

dressing the finality problem is relatively scarce, but the

available cases show that these principles have been healthy

until now. We applied them in United States v. Davenport, 106

F.3d 1333 (7th Cir. 1997), where we held that an order of

foreclosure and sale was not immediately appealable under

traditional finality doctrine. The only reason for that conclu‐

sion, though, was that the district court had reserved judg‐

ment on some merits questions: whether tax fraud penalties

were appropriate and whether a co‐defendant would have

any right to the proceeds of the sale. Id. at 1334–35. Under

our reasoning in Davenport, an ordinary order of foreclosure

and sale like the order here would have been final. (In Dav‐

enport, we also found we had jurisdiction under Forgay v.

Conrad, 47 U.S. (6 How.) 201 (1848), for reasons not applica‐

ble here.)

We applied these same principles in In re Sorenson, 77

F.2d 166 (7th Cir. 1935), where a bankruptcy court’s power to

enjoin a foreclosure proceeding depended on whether a de‐

cree of foreclosure ordering a sale was a “final decree.” In

reasoning directly applicable here, we held that the foreclo‐

sure decree was final:  

In a foreclosure proceeding a decree which def‐

initely fixes and adjudicates, as between the

parties to the litigation, all issues relating to

their mutual rights and obligations is, to all in‐

tents and purposes, a final decree. The usual

decree of foreclosure does this. Those matters

incident to the execution of the decree—the sale, re‐

port of sale, deficiency decree, redemption, issuance

and recording of deed, and the like—are to the de‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 29

cree of foreclosure what at law the execution, sale,

redemption, and the like are to the final judgment to

which they are incidental. A decree or judgment is

none the less final because of the things thereafter to

be done to give it effect.

77 F.2d at 167 (emphasis added). We followed the same ap‐

proach in Central Trust Co. of New York v. Peoria, Decatur &

Evansville Ry. Co., 118 F. 30 (7th Cir. 1902), where parties ap‐

pealed an order confirming a foreclosure sale. They tried in

part to challenge the merits of the underlying judgment of

foreclosure. We said the merits challenge came too late, treat‐

ing the issue as needing neither citation nor explanation:

“The question cannot be raised on objection to the sale.” Id.

at 32.

We have not been alone in applying the Supreme Court

precedents to find that a foreclosure order is final so long as

it conclusively establishes the extent of the defendant’s liabil‐

ity for the defaulted loan and identifies the property to be

sold. Both the Ninth and Fifth Circuits have read Ray and

Whiting and the cases that followed to establish exactly this

rule. See Citicorp Real Estate, Inc. v. Smith, 155 F.3d 1097, 1101

(9th Cir. 1998) (order meeting these conditions was final

even though the judgment left “the actual amount of the de‐

ficiency judgment to be determined at a fair value hearing

following the judicial foreclosure sale[]”); Citibank, N.A. v.

Data Lease Financial Corp., 645 F.2d 333, 337–38 (5th Cir. 1981)

(order meeting these conditions had been final and therefore

was unreviewable in later appeal of order confirming sale).  

Under these principles and precedents, the judgment of

foreclosure here is not incomplete or uncertain in any way

that could defeat finality. It resolves the merits of the foreclo‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
30 No. 13‐1017

sure dispute. It leaves nothing to do but execute the judg‐

ment by carrying out the sale and distributing the proceeds.

The judgment establishes that Townsend is liable to HSBC

for default under the note. It specifies the damages he must

pay as a result of his default—$143,569.65—which includes

the principal balance and specified amounts of accrued pre‐

judgment interest and attorney fees. The judgment also or‐

ders that post‐judgment interest accrues at the statutory rate

until the judgment is satisfied through sale of the property

or through reinstatement or redemption. It also resolves the

rights of all lienholders claiming an interest in the property.

It fixes the priority of interests by specifying that MERS’s

rights under a second mortgage are inferior to HSBC’s, and it

orders that proceeds will be distributed to both HSBC and

MERS in the manner specified by 735 ILCS 5/15‐1512.

The judgment also sets out the ways it can be executed. It

specifies when the reinstatement and redemption periods

run. In the event that Townsend would not pay the amounts

needed to reinstate or redeem (and he did not), it makes

clear that the judgment will be satisfied through sale of

Townsend’s home. The judgment identifies the property to

be sold and explains the procedures by which the sale officer

(appointed by a separate order that same day) must conduct

the sale. The judgment also provides that the court must en‐

ter a deficiency judgment against Townsend if “the proceeds

of the sale are not sufficient to satisfy those sums due the

Plaintiff.”1

                                                  1 The judgment also states that the court retains jurisdiction over the

parties and subject matter “for the purpose of enforcing this Judgment or

vacating said Judgment.” That is not the sort of “reservation” of jurisdic‐

tion that defeats finality. A court in a civil case routinely retains jurisdic‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 31

In other words, the judgment resolves the merits of

HSBC’s request for relief and can be executed mechanically

following the sale. That makes it final.

The approach I would follow raises one pragmatic con‐

sideration. Illinois courts now apply the majority’s approach

in foreclosure appeals, see EMC Mortgage Corp. v. Kemp, 982

N.E.2d 152, 154 (Ill. 2012), though that has not always been

true. See In re Sorenson, 77 F.2d at 168, quoting Kirby v.

Runals, 29 N.E. 697, 698 (Ill. 1892) (decree foreclosing mort‐

gage and decreeing sale of mortgage premises is final decree

even though master is ordered to make report of sale); Chi‐

cago & N.W. Ry. Co. v. City of Chi., 35 N.E. 881, 883 (Ill. 1893),

citing Whiting, 38 U.S. (13 Pet.) 6 (1839), and Grant, 106 U.S.

429 (1882).

Under either approach to finality, however, some incon‐

sistency between federal and state courts is unavoidable. The

two other states in our circuit follow the approach I would

continue under the federal precedents. See Anchor Savings &

Loan Ass’n v. Coyle, 435 N.W.2d 727, 729–30 (Wis. 1989)

(judgment of foreclosure and sale was immediately appeal‐

able despite separate need to conduct and confirm sale and

compute deficiency judgment); Bahar v. Tadros, 123 N.E.2d

189, 189–90 (Ind. 1954) (judgment of foreclosure was imme‐

diately appealable). In any event, the question of finality in

federal courts is a question of federal procedural law, Budi‐

nich, 486 U.S. at 198–99, and our job is to follow throughout

the circuit what has been until now a clear rule.  

                                                 

tion to enforce its judgment and can vacate its judgment under Federal

Rule of Civil Procedure 60(b) or state analogs.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
32 No. 13‐1017

II. Executing the Judgment—The Open Issues

The majority does not identify any open issue regarding

the merits of the district court’s judgment. The majority fo‐

cuses instead on three open issues regarding execution:

(1) the mortgagor’s ability to redeem or reinstate the mort‐

gage before the judicial sale; (2) the need to confirm any sale

in a separate proceeding; and (3) the inability to determine

the amounts of any deficiency judgment or interest until the

fairness of the sale is evaluated.  

None of these matters should prevent us from treating

the judgment as final. They do not threaten the decisions

that Townsend is in default and that HSBC is entitled to a

specified amount of compensation, whether through sale of

the home or other cash payment. No matter how the majori‐

ty’s issues turn out, all that can happen now is that HSBC’s

judgment will be either satisfied or abandoned. I explain

first some general principles regarding execution of a judg‐

ment before addressing the specific issues that trouble the

majority.

A. Executing a Judgment—General Principles

The majority concludes that the merits of a foreclosure

action are not resolved until the trial court finds that the

mortgaged property was properly sold and the amount of a

deficiency judgment is set. The majority focuses on the un‐

certainty as to when and exactly how HSBC will collect its

judgment against Townsend. The forced sale of a home is the

most dramatic part of the typical foreclosure suit, but it’s

important to remember that selling the home is at bottom

just one way to execute a judgment for failure to pay a debt

as promised.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 33

There is of course plenty of room for complication and

controversy in executing a judgment. See, e.g., Mortgage Elec‐

tronic Registration Systems, Inc. v. Estrella, 390 F.3d 522, 523

(7th Cir. 2004) (recognizing that district court can invalidate

foreclosure sale when it was not conducted properly). The

execution process here is no exception. The judgment orders

Townsend to pay HSBC $143,569.65, plus post‐judgment in‐

terest. There are at least three ways Townsend could satisfy

that judgment against him and make HSBC whole. First, he

could just pay the money owed in cash by exercising his

statutory redemption right, which amounts to a post‐

judgment settlement that the statute requires the creditor to

accept. Second, he could exercise his statutory right of rein‐

statement, another form of statutory settlement that requires

him to cure his defaults. Third and most likely, if Townsend

cannot come up with the cash for either of the first two op‐

tions, the court will execute the judgment by carrying out

the sale of the mortgaged property and issuing a personal

deficiency judgment for any balance still owing.  

Having more than one choice for how to satisfy a judg‐

ment is commonplace. It does not undermine the finality of

that judgment. “A question remaining to be decided after an

order ending litigation on the merits does not prevent finali‐

ty if its resolution will not alter the order or moot or revise

decisions embodied in the order.” See Budinich v. Becton

Dickinson & Co., 486 U.S. 196, 199 (1988); see also Parks v.

Pavkovic, 753 F.2d 1397, 1401 (7th Cir. 1985) (allowing imme‐

diate appeal when “only a ‘ministerial’ task remains for the

district court to perform”).  

Deciding any of the questions remaining here, which

deal with exactly how Townsend and/or the court will satis‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
34 No. 13‐1017

fy the judgment of default against him, would not risk affect‐

ing the decision on the merits—that Townsend owes HSBC

$143,569.65 plus interest and HSBC has first dibs on his

home. To be sure, resolving some of these issues could affect

whether Townsend needs to endure a forced sale of his

home. But under the judgment of foreclosure, he can avoid

the sale only if (1) he complies with the judgment by re‐

deeming or reinstating his mortgage, (2) HSBC gives up on

executing the judgment, or (3) the parties reach a private set‐

tlement.  

The remaining post‐judgment issues here are typical of a

post‐judgment proceeding that “must be viewed as a sepa‐

rate lawsuit from the action which produced the underlying

judgment” and is “final ... if it disposes completely of the

issues raised” in the post‐judgment proceeding. In re Joint

Eastern & Southern Dists. Asbestos Litig., 22 F.3d 755, 760 (7th

Cir. 1994) (order authorizing discovery in aid of execution of

judgment not appealable until end of case); see also Solis v.

Current Development Corp., 557 F.3d 772, 775–76 (7th Cir.

2009) (order in a post‐judgment proceeding is treated like an

order in “a freestanding lawsuit” and is final and appealable

only if it resolves all issues in that proceeding); King v. Ioniza‐

tion Int’l, Inc., 825 F.2d 1180, 1184 (7th Cir. 1987) (post‐

judgment proceeding treated “as a separate lawsuit;” order

in post‐judgment proceeding fixing priorities of competing

liens was final and appealable).  

As a general rule, a losing party may appeal from a final

judgment determining the merits and may appeal separately

from a later order that concludes a post‐judgment proceed‐

ing to execute the underlying judgment. See Resolution Trust

Corp. v. Ruggiero, 994 F.2d 1221, 1223–25 (7th Cir. 1993);

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 35

EEOC v. Gurnee Inns, Inc., 956 F.2d 146, 147–48 (7th Cir.

1992).

In mortgage foreclosure cases, in particular, courts have

allowed separate appeals of the judgment of foreclosure and

the order confirming the sale. See Leadville Coal Co. v. McCre‐

ery, 141 U.S. 475, 478–79 (1891) (“[W]e cannot fail to observe

that the main scope and purpose of this appeal seem to be to

relitigate questions fully determined by the final decree ap‐

pealed from and affirmed.”); Citibank, N.A. v. Data Lease Fi‐

nancial Corp., 645 F.2d 333, 337–38 (5th Cir. 1981) (explaining

that separate appeals may be taken from both the order di‐

recting foreclosure and sale and the order confirming sale).

In such cases, each appeal deals with quite different is‐

sues. An appeal on the merits can challenge the validity of

the debt, the finding of breach, and the amount owed. A later

appeal of an order confirming a sale can challenge whether

the sale was actually proper. There is little threat of overlap.

In fact, the Fifth Circuit requires parties to appeal separately

the judgment of foreclosure and the subsequent order con‐

firming the sale. In the Fifth Circuit, which relied on the Su‐

preme Court cases and one Seventh Circuit decision cited

above, a party who follows the majority’s course, appealing

only after confirmation of a sale, is actually barred from chal‐

lenging the merits of the judgment of foreclosure. See Citi‐

bank, 645 F.2d at 338; see also Central Trust Co. of New York v.

Peoria, Decatur & Evansville, Ry. Co., 118 F. 30, 32 (7th Cir.

1902) (appeal from order confirming sale could not challenge

merits of underlying foreclosure).

This reasoning is consistent with our decision in MERS v.

Estrella, which held that an order denying confirmation to a

judicial sale is not a final decision when the district court or‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
36 No. 13‐1017

ders another sale. 390 F.3d at 523–24; see also Levin v. Baum,

513 F.2d 92, 94 (7th Cir. 1975) (Stevens, J.) (order vacating

prior confirmation of sale and ordering new sale was not

appealable). Such an order does not end the “separate law‐

suit” in the post‐judgment proceeding and thus cannot be

appealed immediately. But that does nothing to undermine

the finality of the earlier judgment.

With these principles in mind, I turn to the specific issues

that have persuaded the majority that we do not yet have a

final judgment here. The specialized vocabulary of mortgage

foreclosure should not distract us from the essential sub‐

stance of the issues. These possible post‐judgment issues

pose no greater threat to finality than others that do not de‐

feat the finality of judgments on the merits.

B. Redemption and Reinstatement Practice

The majority first contends the judgment here is not final

because there is a chance the sale will never take place. Illi‐

nois law and the terms of this judgment allowed Townsend

time to reinstate or redeem his mortgage before a sale could

take place. The statutory options of reinstatement and re‐

demption should not defeat finality. They merely spell out

the terms of a post‐judgment settlement the plaintiff is re‐

quired to accept. By paying the amount of the judgment, the

defendant avoids the sale and satisfies the judgment, just as

any other losing defendant may: by paying the plaintiff the

amount of the judgment.  

For reinstatement, the defaulting borrower must cure the

default. That requires paying all amounts due under the

note (such as accrued interest, late fees, attorney fees) except

the remaining principal. 735 ILCS 5/15‐1602. The effect is to

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 37

cure prior breaches, to make the lender whole, and to rein‐

state the mortgage as if the default had not occurred. Re‐

demption, on the other hand, requires payment of all princi‐

pal and interest due as of the date of the judgment (which

can include the entire principal, accelerated by the default),

as well as the lender’s costs and fees and interest. 5/15‐

1603(d). The effect is to make the lender whole, satisfying the

note and leaving the lender with no further interest in the

property. Illinois law expresses a preference for resolving

mortgage disputes through redemption and reinstatement as

opposed to sale. A foreclosure sale cannot occur until the

time limits for both have expired. 5/15‐1507(b).  

These rights are far from new, so it’s hard to see why

their existence should only now be discovered to change our

jurisdictional calculus. We reasoned in In re Sorenson, 77 F.2d

166, 167 (7th Cir. 1935), for example, that redemption was

among the matters incident to the execution. The possibility

of redemption did not defeat finality of a judgment of fore‐

closure.

Given the limited financial resources of most defaulting

borrowers, these statutory rights are not exercised often.

They usually serve only to delay the sale and thus the execu‐

tion of the already‐final judgment. See Michael H. Schill, An

Economic Analysis of Mortgagor Protection Laws, 77 Va. L. Rev.

489, 496–97 (1991); George M. Platt, Deficiency Judgments in

Oregon Loans Secured by Land: Growing Disparity Among Func‐

tional Equivalents, 23 Willamette L. Rev. 37, 49 (1987). As a

matter of law, of course, we must allow for these possibilities

in each case. Nevertheless, as far as I know, the always‐

present possibility that the defendant might moot an appeal

by paying the amount due on the judgment has never before

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
38 No. 13‐1017

been deemed to destroy the finality of the underlying judg‐

ment.

The majority disagrees, relying on general language in

the Supreme Court’s decision in Budinich. Ante at 7. But Bu‐

dinich did not say that the mere prospect that a party might

moot a case defeats finality of an otherwise final judgment.

The Supreme Court said: “A question remaining to be decid‐

ed after an order ending the litigation on the merits does not

prevent finality if its resolution will not alter the order or

moot or revise decisions embodied in the order.” 486 U.S. at

199. That comment is best understood as applying to a re‐

maining issue to be decided by the district court. The Budinich

language could not extend to the prospect that a party might

choose to take some action that would render moot a pend‐

ing appeal or even the case itself. In virtually any civil case, a

losing defendant may choose to comply with the judgment

against him, or both parties may come to a post‐judgment

settlement. Either way an appeal may become moot. But if

that possibility defeated finality, we would have jurisdiction

over very few civil appeals.

The statutory rights of redemption and reinstatement

merely codify this commonplace option of complying with a

judgment. They do not change the essential finality of the

judgment of foreclosure.2  

                                                  2 Beyond these doctrinal difficulties, there is also no logical connec‐

tion between the time these rights expire and the time for appeal the ma‐

jority has identified: after the sale is confirmed. If these rights expire be‐

fore the sale—and in this case they have long since expired—why must

the parties wait until the sale is confirmed before they can appeal? Why

wouldn’t the judgment transform into an appealable judgment the mo‐

ment these periods end? Or, given the special right to redeem for certain

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 39

C. Confirmation of Sale Process

When properly understood, the need to carry out the

court‐ordered sale and to confirm the result under 735 ILCS

5/15‐1508(b) also does not undermine finality. The sale is the

key step in executing the judgment on the merits. The need

for a court order confirming the sale presents an opportunity

to challenge the sale itself but not the underlying foreclosure

judgment. This step in the execution does not undermine the

finality of the judgment of foreclosure.  

As noted above, in Whiting v. Bank of United States, 38 U.S.

(13 Pet.) 6, 15 (1839), the Supreme Court expressly rejected

the contention that the decree (judgment) of foreclosure or‐

dering a sale would be “deemed final only after the return

and confirmation of the sale by a decretal order of the

Court.” We said essentially the same thing in Sorenson, con‐

cluding that a “decree or judgment [of foreclosure] is none

the less final because of the things thereafter to be done to

give it effect,” and we treated “the sale, report of sale, defi‐

ciency decree” as “incident to the execution of the decree.”

77 F.2d at 167.

The Ninth and Fifth Circuits agree. See Citicorp Real Es‐

tate v. Smith, 155 F.3d 1097, 1101 (9th Cir. 1998) (holding fore‐

closure judgment was final even though it left “the actual

amount of the deficiency judgment to be determined at a fair

value hearing following the judicial foreclosure sales”); Citi‐

bank, 645 F.2d at 337–38 (holding that issues relating to mer‐

                                                 

residential foreclosures for 30 days after confirmation of a sale, see 735 ILCS

5/15‐1604(a), when, exactly, does the judgment become final so that the

time to appeal begins to run? The lack of answers to these questions

highlights the uncertainty caused by the majority’s approach to finality.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
40 No. 13‐1017

its of foreclosure judgment could not be appealed after con‐

firmation of sale because earlier order had been final).

Nothing about the Illinois confirmation of sale proceed‐

ing suggests that it has a greater impact on the merits. In Il‐

linois, confirmation of sale proceedings are designed to de‐

termine whether the sale was fair. 735 ILCS 5/15‐1508(b).

They are initiated by a separate post‐judgment motion, id.,

and are part of the process to satisfy the judgment of foreclo‐

sure. See 5/15‐1508(f).

Under the Illinois statutes and case law, issues relating to

the fairness of a foreclosure sale should not overlap with is‐

sues about whether it was proper to enter the judgment of

foreclosure and to order the sale in the first place. After a

foreclosure sale, the issue is not whether the judgment of

foreclosure was correct but instead whether the sale was

conducted properly. The court must “enter an order confirm‐

ing the sale” unless a party establishes that the sale was in‐

valid because “(i) a notice required in accordance with [735

ILCS 5/15‐1507(c)] was not given, (ii) the terms of sale were

unconscionable, (iii) the sale was conducted fraudulently, or

(iv) justice was otherwise not done.” 735 ILCS 5/15‐1508(b).

The first three grounds for avoiding confirmation of a

sale plainly have nothing to do with the underlying merits.

Because confirmation of sale proceedings present different

issues, “there will be no judicial diseconomy if they are con‐

sidered in a separate appeal.” See Parks, 753 F.2d at 1402; see

also Radio Station WOW, Inc. v. Johnson, 326 U.S. 120, 126

(1945) (“[A] judgment directing immediate delivery of phys‐

ical property is reviewable ... because it is independent of,

and unaffected by, another litigation with which it happens

to be entangled.”). In the typical case where the defendant

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 41

demonstrates the sale is unfair, the remedy is simply to va‐

cate the sale and to order a new one, not to set aside the

foreclosure. See Estrella, 390 F.3d at 523–24 (remedy for un‐

fair sale was to order second sale).

But what about the fourth ground, that “justice was oth‐

erwise not done”? That language could be read broadly to

invite a judge to revisit the merits and to set aside not only

the sale but also the underlying judgment of foreclosure.

That prospect might weigh against finality, but both we and

the Illinois Supreme Court have rejected such a broad read‐

ing of the statute.

In Aurora Loan Services, Inc. v. Craddieth, 442 F.3d 1018,

1029 (7th Cir. 2006), a district court had refused to confirm a

foreclosure sale under Illinois law on exactly this broad the‐

ory. We reversed, noting “the confusion that would be inject‐

ed into the law were the confirmation of foreclosure sales a

matter of judicial whim.” The Illinois Supreme Court is ac‐

tually the authoritative voice on this point of law, and it has

explained: “At this stage of the proceedings, objections to the

confirmation under section 15‐1508(b)(iv) cannot be based

simply on a meritorious pleading defense to the underlying

foreclosure complaint.” Wells Fargo Bank, N.A. v. McCluskey,

999 N.E.2d 321, 328 (Ill. 2013). The state court explained that

“the justice provision under section 15‐1508(b)(iv) acts as a

safety valve to allow the court to vacate the judicial sale and,

in rare cases, the underlying judgment, based on traditional

equitable principles.” Id. at 329 (emphasis added).

In recognizing this “rare” possibility, the Illinois court

made clear that the justice provision in 15‐1508(b)(iv) impos‐

es a much more restrictive standard than the general stand‐

ard for vacating default judgments under 735 ILCS 5/2‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
42 No. 13‐1017

1301(e). To vacate the underlying judgment of foreclosure, it

is not enough under 15‐1508(b)(iv) for the defendant to

“have a meritorious defense to the underlying judgment.”

McCluskey, 999 N.E.2d at 329. The defendant‐borrower must

establish that “justice was not otherwise done because either

the lender, through fraud or misrepresentation, prevented the

borrower from raising his meritorious defenses to the com‐

plaint at an earlier time in the proceedings, or the borrower

has equitable defenses that reveal he was otherwise prevented

from protecting his property interests.” Id. (emphases add‐

ed).

The state court’s authoritative interpretation of the statute

shows that an objection to confirmation of a sale because

“justice was otherwise not done” on the merits of the suit is

analogous to a motion by a losing defendant under Federal

Rule of Civil Procedure 60(b). Like the justice clause in 15‐

1508(b)(iv), Rule 60(b)(3) permits a party facing an already

final adverse judgment to ask a court to vacate that judg‐

ment for reasons of “fraud ..., misrepresentation, or miscon‐

duct by an opposing party.”

The possibility that a defendant might seek to vacate a

judgment under Rule 60(b) does not affect the finality of the

judgment, of course. See Fed. R. App. P. 4(a)(4)(A)(vi), (B)(i);

Fed. R. Civ. P. 60(c)(2); Stone v. INS, 514 U.S. 386, 401–03

(1995) (“motions that do not toll the time for taking an ap‐

peal give rise to two separate appellate proceedings that can

be consolidated”). In Illinois foreclosure cases, the “justice”

clause as interpreted by the Illinois Supreme Court allows

essentially the same sort of relief from a final judgment. This

method goes by a different name, but the superficial differ‐

ences should not distract us from the lack of an effect on fi‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 43

nality. For purposes of finality under 28 U.S.C. § 1291, an Il‐

linois confirmation of sale proceeding does not affect the fi‐

nality of the underlying judgment on the merits.  

D. Deficiency Judgments and Pre‐Judgment Interest

The majority’s final concern is that the amount of a defi‐

ciency judgment and the amount of interest due under the

judgment have not yet been ascertained. This reasoning

again confuses the underlying judgment on the merits with

the details of executing that judgment.  

1. Deficiency Judgments

By establishing the amounts owed and the priorities of

lienholders, the judgment of foreclosure makes clear how the

proceeds of sale will be divided among those with interests

in the property. The judgment of foreclosure tells the mort‐

gagor‐defendant exactly how much money he must pay the

mortgagee‐plaintiff to resolve the lawsuit. Townsend is on

the hook for $143,569.65, plus post‐judgment interest. He

owes that amount whether all the money comes from the

proceeds of the sale or some also comes from payments to‐

ward a deficiency judgment. If the sale proceeds come up

short of the amount owed, the judgment requires entry of a

deficiency judgment against Townsend: “If the proceeds of

the sale are not sufficient to satisfy those sums due the Plain‐

tiff, the court shall enter a Personal Deficiency Judgment pur‐

suant to 735 ILCS 5/15‐1508(e).”

The majority contends that the extent of damages owed

by Townsend remains unquantified because the district

court has the power to reduce the deficiency judgment

Townsend owes following sale if the sale was unfair and the

auction produced too low a sales price. Ante at 7–9. With re‐

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
44 No. 13‐1017

spect, that argument misreads Illinois law. Some states allow

such reductions, but not Illinois. See Illini Federal Savings &

Loan Ass’n v. Doering, 516 N.E.2d 609, 612 (Ill. App. 1987).

Under Illinois law, the deficiency judgment must be “in an

amount equal to the difference between the sale price and

the debt sued upon.” Id. at 611. The Illini Federal court held

that there was no “statutory authority for setting a deficien‐

cy judgment independent of the sale price of the property.”

Id. Nor was there any “provision in Illinois case law for the

court, under its equity powers, to set a deficiency judgment

based on a judicial determination of value rather than the

sale price of the property.” Id. at 612.

An Illinois court reviewing a sale therefore lacks discre‐

tion to deny or alter the amount of the deficiency judgment

if it thinks the sales price was too low. See id. (“The proce‐

dure followed by the trial court in setting aside the deficien‐

cy judgment to conduct a hearing to determine the proper‐

ty’s value for purposes of setting a new deficiency amount

was outside the court’s authority in supervising judicial

sales.”); Bank of Benton v. Cogdill, 454 N.E.2d 1120, 1126 (Ill.

App. 1983) (“[T]he entry of such a [deficiency judgment] was

mandatory ... and the court lacked discretion to deny the

plaintiff relief on equitable grounds.”). Illinois law simply

does not give trial courts the power the majority believes

they have to exercise discretion on the amount of a deficiency

judgment.  

That does not mean a court is powerless if it thinks a sale

was unfair. Although “mere inadequacy of price alone is not

sufficient cause for setting aside a judicial sale,” a court can

set aside the sale based on “mistake, fraud, or violation of

duty by the officer conducting the sale.” See Illini Federal, 516

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 45

N.E.2d at 611; see also Resolution Trust Corp v. Holtzman, 618

N.E.2d 418, 425 (Ill. App. 1993) (Illinois legislature “did not

intend to impose upon the court the kind of inquiry provid‐

ed in the Uniform Commercial Code that all sales ‘must be

commercially reasonable’”). But the remedy is only to order

a new sale, not to deny or reduce a deficiency judgment.

“[T]here is a significant difference between the court setting

aside a sale to order a new sale at a minimum price and the

court setting aside a deficiency judgment to establish a new

deficiency amount based on the court’s determination of

value in the absence of a sale.” Illini Federal, 516 N.E.2d at

612.  

The majority resists Illini Federal’s prohibition on courts

exercising discretion over deficiency judgments on two

grounds. First, the majority argues that Illini Federal itself

recognized an ability to alter deficiency judgments in the

presence of “fraud or irregularity in the foreclosure proceed‐

ing.” Ante at 9, quoting Illini Federal, 516 N.E.2d at 611. But

this is not so. The court in Illini Federal did not contradict it‐

self, as the majority seems to think. Instead, as noted above,

“fraud or irregularity” permit the court to consider prices

other than the price at which the property was sold but only

to determine whether to deny confirmation of the sale and

order a new sale, not to deny or reduce a deficiency judg‐

ment. Illini Federal itself rejected just such an attempt to

stretch a court’s recognized power to refuse confirmation in‐

to a new power to deny or reduce a deficiency judgment. Id.;

accord, Nationwide Advantage Mortgage Co v. Ortiz, 975

N.E.2d 178, 186–87 (Ill. App. 2012); NAB Bank v. LaSalle Bank,

N.A., 984 N.E.2d 154, 161–62 (Ill. App. 2013).

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
46 No. 13‐1017

Second, the majority suggests that even though Illini Fed‐

eral held that courts lack discretion to reduce or deny defi‐

ciency judgments, later statutory changes have undermined

that holding. Closer examination shows this is not correct.

Illinois recodified its mortgage law in 1987 to “integrate into

one statute as much of the law of mortgage foreclosure as

possible.” Steven C. Linberg & Wayne F. Bender, The Illinois

Mortgage Foreclosure Law, Ill. B.J., Oct. 1987, at 800, 800.

Whether a deficiency judgment is mandatory or discretion‐

ary is a rather important feature of mortgage law. None of

the statutory language or case law cited by the majority sug‐

gests that Illinois has made what would be a striking change

in the law.  

The current statute on deficiency judgments begins with

the phrase “the court shall enter a personal judgment for de‐

ficiency.” 735 ILCS 5/15‐1508(e) (emphasis added). The ma‐

jority nevertheless justifies its interpretation by pointing to

the use of some discretionary language, like the word “may,”

in the statute. This use of the word “may” is neither new nor

a harbinger of the new discretionary relief the majority has

found. Prior versions of the statute, including that applied in

Illini Federal, also said that a plaintiff “may” obtain a defi‐

ciency judgment. See, e.g., Ill. Ann. Stat. ch. 110 ¶ 15‐112

(1985) (“[I]f the sale of the mortgaged premises fails to pro‐

duce a sufficient amount to pay the amount found due in the

judgment ... the plaintiff may have a personal deficiency

judgment... .”) (emphasis added); Ill. Ann. Stat. ch. 95, § 17

(1950) (“[A] decree may be rendered for any balance of mon‐

ey that may be found due to the complainant over and above

the proceeds of the sale or sales ... .”) (emphasis added).

These uses of “may” make perfect sense even without a

grant of discretion to deny or reduce a deficiency judgment.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 47

Not every foreclosure plaintiff will seek a deficiency judg‐

ment, nor will it always be necessary to enter one—after all,

the property could be sold for more than the amount owed.  

Even more to the point, no one else has noticed the new

and dramatic change found by the majority. Following the

enactment of the new statute, Illinois courts continue to cite

the principles of Illini Federal favorably. See Resolution Trust,

618 N.E.2d at 424–25 (“Even after the 1987 amendment,

courts have cited Illini Federal with approval.”). Commenta‐

tors—both at the time the statute was first passed and now—

have made clear that neither statute nor case law has granted

courts discretion over deficiency judgments. See Eric T.

Freyfogle, The New Judicial Roles in Illinois Mortgage Foreclo‐

sures, 19 Loy. U. Chi. L.J. 933, 933, 937 (1987) (“Illinois re‐

tained the requirement of judicial foreclosure sale and re‐

fused to impose any limits on post‐sale deficiency judg‐

ments.”); 2 Michael T. Madison et al., The Law of Real Estate

Financing § 22:4 (“Illinois does not restrict the recovery of a

deficiency judgment by statute apart from restricting a defi‐

ciency following a consensual foreclosure decree.”);

id. § 12:73.

It is no surprise, then, that the majority has not found a

single case where an Illinois court has recognized such dis‐

cretion over a deficiency judgment. In view of today’s deci‐

sion, though, we should expect some borrowers to seek such

discretionary relief, albeit without any substantive guidance

from our court on how trial courts should exercise this new‐

found discretion.  

Since Illinois law actually denies trial courts discretion

over deficiency judgments, all parties can expect that any

deficiency judgment—whether ordered following the first

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
48 No. 13‐1017

attempted sale or a later sale—will equal the amount due

under the judgment less the net proceeds received from the

sale. We cannot know now the precise amount of any defi‐

ciency judgment, but that detail of execution does not affect

finality if the amount can be mechanically calculated. A need

to do arithmetic does not defeat finality. See Parks, 753 F.2d

at 1401–02 (finding “ministerial”—meaning “mechanical and

uncontroversial”—the need to calculate the specific amount

owed to each plaintiff even when the plaintiffs later had to

prove with receipts how much was owed); accord, e.g., Her‐

zog Contracting Corp. v. McGowen Corp., 976 F.2d 1062, 1064

(7th Cir. 1992) (“We think the original judgment was final,

because the process of reducing it to a sum certain was in‐

deed mechanical.”); Citicorp Real Estate, Inc. v. Smith, 155 F.3d

1097, 1101 (9th Cir. 1998) (holding foreclosure judgment was

final even though it left “the actual amount of the deficiency

judgment to be determined at a fair value hearing following

the judicial foreclosure sales”).  

2. Interest Calculations

The majority’s suggestion that “pre‐judgment” interest is

not yet determined is similarly flawed and just misreads the

district court’s judgment. Even calling this interest “pre‐

judgment” begs the question by assuming that the calcula‐

tion of post‐judgment interest begins with the sale rather

than the judgment on the merits. But the face of the judg‐

ment here makes clear that the pre‐judgment amount of ac‐

crued interest has already been calculated and awarded at

the contract rate in the note. The judgment then provides for

post‐judgment interest: HSBC is entitled to the “Total Judg‐

ment Amount as found above, together with interest at the

statutory judgment rate after entry of this judgment.” ¶ 16.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 49

The calculation of post‐judgment interest is simpler and

certainly does not affect finality. See Pace Communications,

Inc. v. Moonlight Design, Inc., 31 F.3d 587, 591 (7th Cir. 1994);

cf. Student Loan Marketing Ass’n v. Lipman, 45 F.3d 173, 175–

77 (7th Cir. 1995) (failure to calculate pre‐judgment interest

defeats finality). Post‐judgment interest accrues at the statu‐

tory rate under 28 U.S.C. § 1961, and its calculation is a mat‐

ter of arithmetic. The need to calculate both the amount of

any deficiency judgment and post‐judgment interest thus

should not prevent the district court’s judgment of foreclo‐

sure from being a final judgment.3

More generally, on this issue of appellate jurisdiction,

where predictability and clarity are especially prized, we

should stick with the long‐settled difference between a

judgment on the merits and the execution of that judgment.

We should exercise our jurisdiction and decide the merits.

III. Summary Judgment for HSBC

Because I believe we have jurisdiction, I turn briefly to

the merits of the appeal. Townsend argues that HSBC was

not entitled to summary judgment because it failed to estab‐

lish that the Illinois mortgage foreclosure statute authorized

it to bring the foreclosure action. To the extent the argument

is framed in terms of prudential or statutory standing, the

Supreme Court clarified in Lexmark Int’l, Inc. v. Static Control

                                                  3 The majority’s approach to interest also creates a new uncertainty

with significant economic consequences given today’s interest rates.

When does the interest calculation shift from the higher, pre‐judgment

contract rate to the lower, post‐judgment statutory rate: with the judg‐

ment of foreclosure or the confirmation of sale? Which is the “entry of

the judgment” under 28 U.S.C. § 1961? See generally Kaiser Aluminum &

Chem. Corp. v. Bonjorno, 494 U.S. 827 (1990).

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
50 No. 13‐1017

Components, Inc., that whether a particular plaintiff has a

cause of action under a statute no longer falls under the ru‐

bric of standing. See 572 U.S. —, 134 S. Ct. 1377, 1386–88 &

n.4 (2014) (finding it misleading when courts label the ques‐

tion whether a given plaintiff has a cause of action under a

statute as being one of prudential or statutory standing); see

also Empress Casino Joliet Corp. v. Johnston, 763 F.3d 723, 733–

34 (7th Cir. 2014) (following Lexmark).

It is clear from the record that HSBC has constitutional

standing, an issue that could not be waived. Townsend’s

other argument—that HSBC failed to establish that the Illi‐

nois statute permits a party in its position to seek judicial re‐

lief—was waived. Townsend made no attempt during the

summary judgment proceedings to show that HSBC was the

wrong party to bring suit.

Even when a plaintiff’s motion for summary judgment

goes unopposed, a plaintiff is not entitled to summary

judgment unless it establishes that there is no issue of mate‐

rial fact with respect to the elements it must prove and that it

is therefore entitled to judgment as a matter of law. See, e.g.,

Hotel 71 Mezz Lender LLC v. Nat’l Retirement Fund, 778 F.3d

593, 601–02 (7th Cir. 2015); Johnson v. Gudmundsson, 35 F.3d

1104, 1112 (7th Cir. 1994). Under Illinois law, though, the de‐

fendant bears the burden of proving that the statute does not

permit the plaintiff to foreclose on the mortgage. A defend‐

ant waives the argument if it is not made prior to entry of

the judgment of foreclosure. See U.S. Bank, N.A. v. Avdic, 10

N.E.3d 339, 352 (Ill. App. 2014) (plaintiff need not allege facts

establishing that it is a party that can sue under the statute in

order to win a judgment of foreclosure); Mortgage Electronic

Registration Systems, Inc. v. Barnes, 940 N.E.2d 118, 123 (Ill.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51
No. 13‐1017 51

App. 2010). Townsend’s failure to raise this non‐

jurisdictional issue in the district court means that he waived

it. See Resolution Trust Corp. v. Juergens, 965 F.2d 149, 153 (7th

Cir. 1992); see also C & N Corp. v. Gregory Kane & Ill. River

Winery, Inc., 756 F.3d 1024, 1026 (7th Cir. 2014) (holding that

defendant can waive arguments even if they might have un‐

dermined plaintiff’s prima facie case).

Accordingly, I would affirm the judgment of the district

court. I respectfully dissent from dismissal of the appeal for

lack of appellate jurisdiction.

Case: 13-1017 Document: 66 Filed: 07/16/2015 Pages: 51