Title: Madigan v. Wildermuth
Citation: 2017 IL 120763
Docket Number: 120763
State: Illinois
Issuer: Illinois Supreme Court
Date: September 21, 2017

Illinois Official Reports 
 
Supreme Court 
 
 
People ex rel. Madigan v. Wildermuth, 2017 IL 120763 
 
 
 
Caption in Supreme 
Court: 
 
THE PEOPLE ex rel. LISA MADIGAN, Attorney General of Illinois, 
Appellee, v. MATTHEW WILDERMUTH et al., Appellants. 
 
 
 
Docket No. 
 
120763 
 
 
 
Filed 
 
 
September 21, 2017 
 
 
 
Decision Under  
Review 
 
Appeal from the Appellate Court for the First District; heard in that 
court on appeal from the Circuit Court of Cook County, the Hon. 
Diane L. Larsen, Judge, presiding. 
 
 
Judgment 
Appellate court judgment affirmed in part and vacated in part; cause 
remanded. 
Counsel on 
Appeal 
Robert E. Browne, Jr., and William P. Pipal, of Troutman Sanders 
LLP, of Chicago, and Michael T. Reagan, of Ottawa, for appellants. 
 
Lisa Madigan Attorney General, of Springfield (David L. Franklin, 
Solicitor General, and John Schmidt, Assistant Attorney General, of 
Chicago, of counsel), for the People. 
 
Elizabeth Shuman-Moore and Ryan Z. Cortazar, of Chicago Lawyers’ 
Committee for Civil Rights, and William J. McKenna, Jr., and Peter J. 
O’Meara, of Foley & Lardner LLP, both of Chicago, for amici curiae 
Chicago Lawyers’ Committee for Civil Rights Under Law, Inc., et al. 
Digitally signed by 
Reporter of Decisions 
Reason: I attest to the 
accuracy and 
integrity of this 
document 
Date: 2018.03.02 
15:11:03 -06'00'
 
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Justices 
JUSTICE THOMAS delivered the judgment of the court, with 
opinion. 
Chief Justice Karmeier and Justices Freeman, Kilbride, Garman, 
Burke, and Theis concurred in the judgment and opinion. 
 
 
 
OPINION 
 
¶ 1 
 
This appeal presents a certified question involving the requirements necessary to maintain 
a civil rights claim for unlawful discrimination in connection with a “real estate transaction” 
under section 3-102 of the Illinois Human Rights Act (the Act) (775 ILCS 5/3-102 (West 
2010)). Specifically, the Attorney General filed a complaint alleging, inter alia, that 
defendants Matthew Wildermuth, George Kleanthis, and Legal Modification Network (LMN) 
unlawfully discriminated on the basis of race and national origin in the furnishing of services in 
connection with real estate transactions. The circuit court of Cook County denied defendants’ 
motion to dismiss brought under section 2-615 of the Code of Civil Procedure (735 ILCS 
5/2-615 (West 2010)), but it ultimately certified the following question for interlocutory appeal 
to the appellate court: 
“Whether the State may claim a violation under the Illinois Human Rights Act pursuant 
to a reverse redlining theory where it did not allege that the defendant acted as a 
mortgage lender.” 
The appellate court answered the certified question in the affirmative. 2016 IL App (1st) 
143592, ¶ 38. Defendants petitioned for leave to appeal to this court, which we allowed. 
 
¶ 2 
 
 
 
 
BACKGROUND 
¶ 3 
 
The Attorney General filed a multicount, fourth amended complaint against defendants, 
alleging a course of conduct that violated several statutory and regulatory provisions. Count IV 
is the only count relevant to this appeal1 and alleges as follows. Defendants Wildermuth, an 
attorney, and Kleanthis, a veteran of the real estate business and the sole managing member of 
LMN, engaged in acts and practices that violated section 3-102 of the Act. Defendants’ actions 
constituted a pattern and practice of discrimination in the offering of loan modification 
services to Illinois consumers. Eventually, LMN ceased functioning, and Wildermuth and 
Kleanthis provided loan modification services through Wildermuth’s law offices. According 
to the complaint, defendants engaged in “real estate transactions” as defined by section 
3-101(B) of the Act (775 ILCS 5/3-101(B) (West 2010)) by claiming to negotiate loan 
modifications and short sales on behalf of their clients. 
¶ 4 
 
The Attorney General further alleged that defendants advertised on radio that they would 
succeed where other loan modification providers had failed, help consumers save their homes 
                                                 
 
1Count I alleges violations of various provisions of the Mortgage Rescue Fraud Act (765 ILCS 
940/1 et seq. (West 2010)), count II alleges violations of the Consumer Fraud and Deceptive Business 
Practices Act (815 ILCS 505/1 et seq. (West 2010)), and count III alleges violations of federal 
regulations governing mortgage assistance relief services (see 12 C.F.R. § 1015 et seq. (2012)). These 
counts are currently pending before the circuit court. 
 
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and obtain significant reductions on their monthly mortgage payments, and obtain 
modifications for consumers within a short time frame. Defendants charged consumers 
nonrefundable fees that ranged from $3000 to $5000, which consisted of a base charge for 
preparing and submitting a loan modification application for a first lien residential mortgage, 
and additional fees for second liens and court appearances by Wildermuth. The total fee 
charged often exceeded the consumer’s monthly mortgage payment. The consumers paid the 
fees in advance of receiving services and were led to believe that a portion of their payments 
would be refunded if defendants failed to obtain a loan modification. Defendants routinely 
required and accepted advance payments from consumers defendants knew were not eligible 
for loan modifications. In most cases, the consumers would not interact with Wildermuth or 
any other licensed attorney, and when consumers contacted LMN for an update on the status of 
their modification, they were either ignored or falsely told that the modification had been 
processed. In most cases, when a consumer requested a refund, LMN refused to tender one. 
¶ 5 
 
The complaint further alleged that despite the broad assurances given by defendants, their 
services consisted primarily of filling out and submitting the paperwork to apply for a 
traditional home loan modification program. The modifications obtained were often either 
inconsistent with the promised terms or not obtained within the promised time frame. When 
defendants were not able to obtain a loan modification, they would suggest listing the 
consumer’s property as a short sale. The Attorney General also alleged that defendants 
intentionally discriminated in the furnishing of facilities or services in connection with real 
estate transactions on the basis of race and national origin by targeting the African-American 
and Latino communities by advertising their services through radio stations known to have a 
predominantly Latino and African-American audience. 
¶ 6 
 
Defendants filed a section 2-615 motion to dismiss count IV, asserting that the complaint 
failed to state a violation of section 3-102(B) of the Act because Wildermuth rendered legal 
services and was not engaging in “real estate transactions” as defined by the Act. In response, 
the Attorney General argued that defendants engaged in “real estate transactions” within the 
meaning of the Act when they negotiated loan modifications and short sales on behalf of 
consumers. The Attorney General relied on a “reverse redlining” theory to argue that 
defendants engaged in discrimination.2 
¶ 7 
 
The circuit court denied defendants’ motion to dismiss, concluding that defendants’ 
conduct was covered by the Act because they acted as “mortgage brokers” in their activities. 
The circuit court subsequently denied defendants’ motion to reconsider, but it noted that “it 
would be expeditious to have the appellate court determine in the first instance—can you even 
state a claim.” The circuit court therefore certified for review the following question: 
                                                 
 
2“Redlining” refers to the lending practice of denying credit outright to applicants in a specific 
geographic area due to the income, race, or ethnicity of its residents. See Honorable v. Easy Life Real 
Estate System, 100 F. Supp. 2d 885, 892 (N.D. Ill. 2000); United Companies Lending Corp. v. 
Sargeant, 20 F. Supp. 2d 192, 203 n.5 (D. Mass. 1998) (the term was derived from the actual practice of 
drawing a red line on a map around certain areas in which credit would be denied). “Reverse redlining,” 
on the other hand, involves the extension of credit to consumers but on terms that are materially less 
favorable than to similarly situated consumers outside the “red line.” Federal courts have recognized 
that reverse redlining violates civil rights laws, including the federal Fair Housing Act (FHA) (42 
U.S.C. § 3601 et seq. (2006)). See Honorable, 100 F. Supp. 2d at 892. 
 
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“Whether the State may claim a violation of the [Act] pursuant to a reverse redlining 
theory where it did not allege that the defendant acted as a mortgage lender.” 
¶ 8 
 
The appellate court answered the question in the affirmative, holding that “the concept of 
reverse redlining is not strictly limited to situations involving mortgage lending and section 
3-102(B) of the Act broadly encompasses conduct other than mortgage lending, including the 
loan modification services that defendant offered.” 2016 IL App (1st) 143592, ¶ 38. The 
appellate court did not directly address the circuit court’s ruling that defendants’ alleged 
activities suggested they were mortgage brokers.3 In reaching its holding, the appellate court 
made three findings relative to the parties’ arguments on the certified question. First, the 
appellate court found that the plain language of section 3-102 does not require a defendant 
alleged to have violated the statute to be a mortgage lender. To the contrary, the plain language 
merely requires that the entity engage in a “real estate transaction,” which is defined in 
pertinent part to include “ ‘providing other financial assistance *** for maintaining a 
dwelling.’ ” Id. ¶ 25 (quoting 775 ILCS 5/3-101(B)(1) (West 2010)). Second, the appellate 
court turned to the question of whether defendants provided other financial assistance for 
maintaining a dwelling so as to bring their conduct within the definition of “real estate 
transaction” under the statute. The appellate court concluded that defendants’ loan 
modification services are sufficiently connected to the financing of residential real estate so 
that they can be considered other financial assistance. Id. ¶ 28. For this conclusion, the 
appellate court looked to federal case law construing language in the federal Fair Housing Act 
(FHA) (42 U.S.C. § 3601 et seq. (2006)) that is substantially similar to the pertinent provisions 
of the Illinois Act. 2016 IL App (1st) 143592, ¶ 28. Specifically, the appellate court discussed 
National Ass’n for the Advancement of Colored People v. American Family Mutual Insurance 
Co., 978 F.2d 287, 297 (7th Cir. 1992) (American Family Mutual) (property insurance does not 
constitute “financial assistance” within the meaning of section 3605 of the FHA (42 U.S.C. 
§ 3605 (1988))), United States v. Massachusetts Industrial Finance Agency, 910 F. Supp. 21, 
28-29 (D. Mass. 1996) (a quasi-public agency’s channeling of proceeds from tax-exempt 
bonds to qualifying applicants was considered “financial assistance”), and Eva v. Midwest 
National Mortgage Banc, Inc., 143 F. Supp. 2d 862 (N.D. Ohio 2001) (the “financial 
assistance” language of section 3605 of the FHA applied to an entity that marketed and 
managed a mortgage refinancing scheme used by other defendants to defraud the plaintiffs). 
Third, the appellate court rejected defendants’ assertion that the reverse redlining theory for 
proving discrimination applies only to instances involving the extension of credit. 2016 IL App 
(1st) 143592, ¶ 34. 
¶ 9 
 
Defendants filed a petition for leave to appeal, which this court allowed. 
 
¶ 10 
 
 
 
 
ANALYSIS 
¶ 11 
 
Before this court, defendants argue that the lower courts misinterpreted the applicable 
statutory language to determine that defendants either engaged in “real estate transactions” or 
were acting as “mortgage brokers.” We note that the full scope of the issues presented in this 
                                                 
 
3The Attorney General’s office in its brief before this court likewise does not defend or even 
address the circuit court’s conclusion that defendant’s alleged activities amounted to mortgage 
brokering. The Attorney General’s complaint also does not allege that defendants were mortgage 
brokers. Nor does it allege that they were mortgage lenders. 
 
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case goes beyond the narrow question certified by the circuit court, and in such cases, this 
court’s review is not limited solely to consideration of the certified question (Townsend v. 
Sears, Roebuck & Co., 227 Ill. 2d 147, 153 (2007)). In the interests of judicial economy and the 
need to reach an equitable result, we may delve further to resolve the related issues of law that 
ultimately control the propriety of the order that gave rise to the appeal. See Johnston v. Weil, 
241 Ill. 2d 169, 175 (2011); De Bouse v. Bayer AG, 235 Ill. 2d 544, 550 (2009). The parties’ 
arguments involve the construction of a statute, which is a question of law that we review 
de novo. In re Andrew B., 237 Ill. 2d 340, 348 (2010). 
¶ 12 
 
Section 3-102 of the Act is titled “Civil Rights Violations; Real Estate Transactions” and 
provides in relevant part as follows: 
“It is a civil rights violation for an owner or any other person engaging in a real estate 
transaction, or for a real estate broker or salesman, because of unlawful discrimination 
or familial status, to  
 
(A) Transaction. Refuse to engage in a real estate transaction with a person or to 
discriminate in making available such a transaction; 
 
(B) Terms. Alter the terms, conditions or privileges of a real estate transaction 
or in the furnishing of facilities or services in connection therewith[.]” 775 ILCS 
5/3-102 (West 2010). 
¶ 13 
 
Section 3-101 of the Act provides the following definitions for the terms “real estate 
transaction” and “real estate broker or salesman”: 
 
“(B) *** ‘Real estate transaction’ includes the sale, exchange, rental or lease of real 
property. ‘Real estate transaction’ also includes the brokering or appraising of 
residential real property and the making or purchasing of loans or providing other 
financial assistance:  
 
(1) for purchasing, constructing, improving, repairing or maintaining a 
dwelling; or  
 
(2) secured by residential real estate. 
 
*** 
 
(D) *** ‘Real estate broker or salesman’ means a person, whether licensed or not, 
who, for or with the expectation of receiving a consideration, lists, sells, purchases, 
exchanges, rents, or leases real property, or who negotiates or attempts to negotiate any 
of these activities, or who holds himself or herself out as engaged in these.” (Emphases 
added.) 775 ILCS 5/3-101(B), (D) (West 2010). 
 
¶ 14 
 
 
 
 
I. Financial Assistance 
¶ 15 
 
The Attorney General first argues that defendants were engaged in real estate transactions 
because they provided “other financial assistance” to distressed homeowners for purposes of 
“maintaining a dwelling” as set forth in section 3-101(B) of the Act. The Attorney General 
contends that the phrase “other financial assistance” in that section should be construed 
liberally to include defendants’ business model of assisting consumers with applying for loan 
modifications. 
¶ 16 
 
In response, defendants argue that they did not provide any “financial assistance” that 
could be considered to fall within the plain meaning of the Act. They point out that section 
 
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3-101(B) of the Illinois Act is modeled after section 3605(b)(1) of the federal FHA (42 U.S.C. 
§ 3605(b)(1) (2006)), there is little or no Illinois precedent interpreting Illinois’s Act, and in 
such cases, a court construing Illinois’s Act should look to federal decisions interpreting 
similar language in the FHA (see, e.g., Szkoda v. Illinois Human Rights Comm’n, 302 Ill. App. 
3d 532, 539-40 (1998)). Defendants note that nearly every federal court that has construed the 
counterpart phrase “loans or providing other financial assistance” found in section 3605(b)(1) 
of the federal statute has concluded that its application is limited to circumstances where the 
defendants were lenders or appraisers of mortgage loans or affiliates of the lender collecting 
the loan payments and, thus, had the ability to affect the terms on which credit is extended to 
the borrower. See, e.g., American Family Mutual, 978 F.2d at 297; Davis v. Fenton, 26 F. 
Supp. 3d 727, 741 (N.D. Ill. 2014); Davis v. Wells Fargo Bank, 685 F. Supp. 2d 838, 844 (N.D. 
Ill. 2010); Walton v. Diamond, No. 12-cv-4493, 2013 WL 1337334 (N.D. Ill. Mar. 29, 2013); 
Jones v. Countrywide Home Loans, Inc., No. 09 C 4313, 2010 WL 551418, at *7 (N.D. Ill. Feb. 
11, 2010). 
¶ 17 
 
When construing a statute, this court’s fundamental objective is to ascertain and give effect 
to the intent of the legislature. Beggs v. Board of Education of Murphysboro Community Unit 
School District No. 186, 2016 IL 120236, ¶ 52. The most reliable indicator of legislative intent 
is the statutory language itself, giving it its plain and ordinary meaning. People v. Perry, 224 
Ill. 2d 312, 323 (2007). In determining the plain meaning of statutory terms, we consider the 
statute in its entirety, keeping in mind the subject it addresses and the apparent intent of the 
legislature in enacting it. Id. Words and phrases should not be construed in isolation but must 
be interpreted in light of other relevant provisions of the statute. Michigan Avenue National 
Bank v. County of Cook, 191 Ill. 2d 493, 504 (2000). Similarly, the meaning of questionable 
words or phrases in a statute should be ascertained by reference to the meaning of the 
surrounding words and phrases. Hayes v. Mercy Hospital & Medical Center, 136 Ill. 2d 450, 
477 (1990) (Calvo, J., dissenting, joined by Ward and Clark, JJ.). When addressing the 
meaning of an undefined statutory term, it is the responsibility of the court to choose a 
dictionary definition that most effectively conveys the intent of the legislature. Gaffney v. 
Orland Fire Protection District, 2012 IL 110012, ¶ 95 (Garman, J., concurring in part and 
dissenting in part, joined by Thomas and Karmeier, JJ.). 
¶ 18 
 
We begin our analysis with an examination of the statutory language itself. The Act does 
not define the term “other financial assistance,” and it must be read in context with the 
surrounding statutory language. We note that the term is preceded by the words “the making or 
purchasing of loans” and is succeeded by the phrase “for purchasing, constructing, improving, 
repairing or maintaining a dwelling.” See 775 ILCS 5/3-101(B)(1) (West 2010). Read in 
context then, the “other financial assistance” contemplated by the legislature appears to be the 
providing of funds for making or purchasing a loan for the initial acquisition or construction or 
the subsequent upkeep, repair, or improvement of the property. The statute does not impose 
liability for any form of “assistance” that defendants may have undertaken. Rather, liability 
exists for providing “financial assistance” in a discriminatory manner. Webster’s Third New 
International Dictionary defines “financial” as “relating to finance.” Webster’s Third New 
International Dictionary 851 (1993). “Finance,” under the dictionary definition most relevant 
to the subject and purpose of the statute, means “to provide with necessary funds in order to 
achieve a desired end  <[financed] the government through 
this emergency>.” Id. 
 
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¶ 19 
 
Here, defendants are alleged to have provided assistance with filling out paperwork for 
modifications to already-existing loans. There is no allegation that defendants themselves 
provided any funds to their clients in order to achieve the desired end of obtaining a loan 
modification. In fact, it is indisputable that no new credit is extended when a loan is modified. 
Nor is there any allegation that defendants were affiliated or in the pipeline with any entity that 
provided funds. 
¶ 20 
 
There is also no reason to believe, based on the allegations of the complaint, that the 
purpose of any assistance rendered by defendants was for “maintaining a dwelling,” as is 
required by section 3-101(B)(1). 775 ILCS 5/3-101(B)(1) (West 2010). The statutory language 
must be read in context, and it provides that the financial assistance must be for “purchasing, 
constructing, improving, repairing, or maintaining a dwelling.” Id. Our understanding of the 
word “maintaining” is informed by the verbs preceding it (i.e., constructing, improving, 
repairing). Among the definitions offered by Webster’s Third New International Dictionary for 
“maintenance” is “keeping something (as buildings or equipment) in a state of repair or 
efficiency.” Webster’s Third New International Dictionary 1362 (1993). This, we believe, is 
the definition the legislature intended when we consider the linking of the word “maintaining” 
with the verbs directly preceding it—“improving” and “repairing.” In our view, the most 
plausible definition of “maintaining” conveys the sense of keeping property in a state of repair, 
not simply preventing it from being foreclosed upon, as the Attorney General suggests.4 
Accordingly, we reject the State’s argument that, based on the allegations of the complaint, 
defendants engaged in a “real estate transaction” within the meaning of the statute by 
providing “financial assistance for *** maintaining a dwelling.” 
¶ 21 
 
Our holding is consistent with federal case law interpreting the cognate provisions 
contained in section 3605(b)(1)(A) of the FHA, which defines “real estate-related transaction” 
in part as “[t]he making or purchasing of loans or providing other financial assistance *** for 
*** maintaining a dwelling.” (Emphasis added.) 42 U.S.C. § 3605(b)(1)(A) (2006). Numerous 
cases have held that this language is limited in application to circumstances where the 
defendants had the ability to affect the terms on which credit is extended to the borrower, such 
as where the defendants were lenders, brokers, or appraisers of mortgage loans or affiliates of 
the lender collecting the loan payments. See, e.g., American Family Mutual, 978 F.2d at 297; 
Davis v. Fenton, 26 F. Supp. 3d at 741 (“section 3605 applies only to transactions involving 
defendants that are lenders, brokers, or appraisers of mortgage loans”); Davis v. Wells Fargo 
Bank, 685 F. Supp. 2d at 844 (section 3605 applies only to transactions involving the making 
or purchasing of loans); Walton, 2013 WL 1337334 (held that section 3605 did not apply to 
defendant contractor and its home repair contract because that section only applies to the 
making or purchasing of loans); Jones, 2010 WL 551418, at *7 (held that the defendant closing 
                                                 
 
4Webster’s defines “maintain” as “1. To carry on: continue  2. To 
keep in a desirable condition  3. To provide for *** 4. To defend, as against attack 
or danger. 5. To declare: assert.” Webster’s II New Riverside Dictionary 420 (1984). We believe that 
the second definition is the sense that the legislature had in mind when using it in the statute before us. 
See also Black’s Law Dictionary 1039 (9th ed. 2009) (one of several definitions offered for “maintain” 
is to “care for (property) for purposes of operational productivity or appearance; to engage in general 
repair and upkeep”). 
 
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agent was not liable under section 3605(b)(1) because the defendant was not the lender of the 
mortgage loan and did not “provide any other financial assistance in the transaction”). 
¶ 22 
 
To reach its contrary conclusion that defendant’s conduct—in filling out paperwork for the 
loan modification process and recommending short sales—amounted to “financial assistance” 
for maintaining a dwelling, the appellate court relied upon Eva, 143 F. Supp. 2d 862, American 
Family Mutual, 978 F.2d at 297, and Massachusetts Industrial, 910 F. Supp. at 28-29. We find 
these cases to be easily distinguishable. 
¶ 23 
 
In Eva, defendant U.S. Mortgage Reduction, Inc. (USMR), was an affiliate of the lender. 
USMR managed and advertised a loan acceleration program, under which USMR collected 
one additional payment a year from plaintiffs and USMR profited directly from the loan by 
pocketing the fees charged in connection with the acceleration program. The Eva court found 
the allegation that USMR manages the acceleration program to be sufficient alone to satisfy 
the statutory language of providing financial assistance to maintain a dwelling. The court also 
found it significant that USMR’s acceleration agreement misrepresented the terms of the loan. 
The court concluded that “USMR is not too far removed from transactions in the commercial 
residential market, nor is it lacking in any connection to the financing of residential real estate, 
as to warrant dismissal of [p]laintiffs’ § 3605 claim.” Eva, 143 F. Supp. 2d at 889.  
¶ 24 
 
In contrast to Eva, the Attorney General in the present case did not allege that defendants 
were affiliated with any lender or bank. Nor was it alleged that defendants misrepresented the 
terms of a loan they managed. Instead, defendants were outside the actual pipeline of the loan 
process as far as the decision-making on the terms and conditions of any loan or loan 
modification. In fact, defendants in the present case actually represented their clients against 
the lenders in the process of dealing with their arrears on their mortgages, albeit in such a way 
as to allegedly deceive and defraud their clients. But this does not amount to a violation of 
sections 3-101 and 3-102 of the Act. 
¶ 25 
 
Another federal case relied upon by the appellate court, American Family Mutual, 978 F.2d 
287, also does not help the Attorney General’s position. There, the Court of Appeals, Seventh 
Circuit, held that it would strain the “language [of section 3605] past the breaking point to treat 
[the sale of] property or casualty insurance as ‘financial assistance’—let alone as assistance 
‘for purchasing … a dwelling.’ ” Id. at 297. In reaching this holding, the court reasoned as 
follows: 
“Insurers do not subsidize their customers or act as channels through which public 
agencies extend subsidies. They do not ‘assist’ customers even in the colloquial sense 
that loans are ‘assistance’ (a lender advances cash, with repayment deferred). Payment 
runs from the customer to the insurer. Insurance is no more ‘financial assistance’ than a 
loaf of bread purchased at retail price in a supermarket is ‘food assistance’ or a bottle of 
aspirin brought from a druggist is ‘medical assistance.’ ” (Emphasis added.) Id. 
¶ 26 
 
In the case before us, the appellate court seized upon the language from American Family 
Mutual, which states that “ ‘[i]nsurers do not subsidize their customers or act as channels 
through which public agencies extend subsidies.’ ” 2016 IL App (1st) 143592, ¶ 28 (quoting 
American Family Mutual, 978 F.2d at 297). The appellate court believed that defendants “hold 
themselves out as a channel through which relief flows in the form of residential loan 
modifications via government programs designed to help delinquent *** homeowners avoid 
foreclosures.” Id.  
 
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¶ 27 
 
We disagree, however, that defendants were channels through which funds flow to the 
extent contemplated by American Family Mutual. Defendants were clearly not a necessary and 
direct channel through which funds flow. 
¶ 28 
 
The appellate court also found it significant that defendants’ alleged conduct indicated that 
they “interfered with consumers’ ability to obtain a particular type of financial 
assistance—residential loan modifications.” Id. ¶ 27. But it is hard to fathom how “interfering” 
with someone’s ability to obtain financial assistance is the same thing as “providing” financial 
assistance. Defendants were no more a necessary channel through which funds flow (i.e., 
financial assistance) than a druggist is a channel through which drugs flow (i.e., medical 
assistance), and therefore accepting the appellate court’s interpretation would be, in the words 
of American Family Mutual, to “strain [the] language [of the statute] past the breaking point.” 
American Family Mutual, 978 F.2d at 297. 
¶ 29 
 
The appellate court also relied upon Massachusetts Industrial, 910 F. Supp. 21, to support 
its conclusion. There, the defendant was a quasi-public agency that issued tax-exempt bonds 
for qualifying organizations after application. After the bonds were sold, it issued the proceeds 
to the qualifying organizations. Id. at 29. The defendant was a “necessary conduit” through 
which money to others flowed and was a direct participant in the financial transaction. 
Massachusetts Industrial distinguished American Family Mutual by stating, “[a]n insurer does 
not provide a necessary conduit through which funds flow; the defendant here does.” Id. at 28. 
¶ 30 
 
We have already determined that defendants’ services here cannot be considered 
necessary, and defendants are not “necessary conduits” through which funds flow. Nor are 
they a quasi-public agency. Massachusetts Industrial is thus readily distinguishable from the 
present case. 
¶ 31 
 
Of the cases cited by the parties before this court, the one that comes closest to the facts of 
this case is Davis v. Fenton, 26 F. Supp. 3d 727. There, the defendant provided legal services to 
the plaintiff client who was being foreclosed upon by a mortgage company. The parties’ 
retainer agreement outlined the scope of representation and included such matters as reviewing 
loan documents and negotiating with the mortgagee. Id. at 734. The main issue in the case had 
to do with the enforceability of an arbitration clause in the retainer agreement. In deciding that 
issue, however, the court considered whether defendant’s conduct included “real-estate related 
transactions” within the meaning of section 3605 of the FHA. The court concluded that it did 
not. It found that the “[d]efendants are not lenders, brokers, or appraisers, and so [p]laintiff’s 
attempt to bring a claim against them under section 3605 is misguided.” Id. at 741. In reaching 
its conclusion, the Fenton court quoted the holding of Jones, 2010 WL 551418, at *7, with 
approval as follows: “section 3605 did not apply to defendant because defendant ‘was neither 
the lender, nor the broker, nor the appraiser of [plaintiff’s] mortgage loan, nor did it provide 
any other financial assistance in the transaction.’ ” Davis v. Fenton, 26 F. Supp. 3d at 741. 
¶ 32 
 
We agree with the appellate court that, under the Act, it is not necessary to allege that one is 
a mortgage lender to sustain a claim for a violation of the statute. We find, however, that the 
grounds relied upon here with respect to the “other financial assistance” language were 
lacking. There is also no support for the circuit court’s decision to deny defendants’ motion to 
dismiss on the basis that defendants’ alleged activities indicated that they were in violation of 
the Act because they were “mortgage brokers,” and the Attorney General does not argue 
 
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otherwise in the appeal before us. 
 
¶ 33 
 
 
 
 
II. Real Estate Broker 
¶ 34 
 
As an alternative argument, the Attorney General claims that there is a second way that 
liability may attach under the Act to defendants’ conduct. According to the Attorney General, 
because defendants held themselves out as negotiating short sales, they are considered “real 
estate brokers” under section 3-101(D) of the Act (775 ILCS 5/3-101(D) (West 2010)). 
¶ 35 
 
The problem with the Attorney General’s argument is that even if we accept that 
defendants were “real estate brokers” for purposes of the statute, they would still have to 
engage in a “real estate transaction” as defined by section 3-101(B) for liability to attach. 
Under the plain language of the statute, a person who negotiates the sale of real property or 
who merely holds himself out as negotiating the sale is considered a “real estate broker.” See 
775 ILCS 5/3-101(D) (West 2010). Defendants, therefore, can arguably be considered real 
estate brokers within the meaning of the statute for holding themselves out as willing and able 
to work with banks to negotiate short sales. But it does not necessarily follow that defendants 
have engaged in a “real estate transaction,” and it is only real estate brokers who have engaged 
in a “real estate transaction” who are potentially liable under the statute. In other words, it is 
not enough to invoke liability if a defendant is merely a real estate broker; instead, he must be 
a real estate broker that, because of unlawful discrimination, alters the terms of a real estate 
transaction, which is defined in relevant part as the actual “brokering *** of residential real 
property.” See 775 ILCS 5/3-101(B) (West 2010). 
¶ 36 
 
Here, there is no allegation in the complaint that defendants actually brokered any short 
sales. The complaint merely alleges that defendants “recommended” or “suggested” short sales 
and claimed to be able to negotiate them. Nor is there any allegation in the complaint that 
defendant altered any terms or services in connection with a short sale because of unlawful 
discrimination. Under these circumstances, we reject the Attorney General’s argument that the 
ruling on the motion to dismiss can be sustained on the basis that defendants were “real estate 
brokers.” 
¶ 37 
 
Our resolution of the foregoing issues renders it unnecessary to address the remaining 
arguments of the parties. 
 
¶ 38 
 
 
 
 
CONCLUSION 
¶ 39 
 
For the foregoing reasons, we conclude that the appellate court was correct in answering 
the certified question in the affirmative. We further conclude, however, that the appellate court 
erred in its analysis and that count IV of plaintiff’s complaint should have been dismissed 
without prejudice. Accordingly, we vacate the appellate court’s discussion, which found that 
defendants engaged in a “real estate transaction” by providing “other financial assistance,” and 
we remand the cause to the circuit court for further proceedings consistent with this opinion. 
 
¶ 40 
 
Appellate court judgment affirmed in part and vacated in part; cause remanded.