Court Opinion

ID: 9496582
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:30:12.671252+00
Date Added: 2024-06-11T17:57:40.070058
License: Public Domain

WILLIAMS, Circuit Judge,
concurring.
The Rizzos missed monthly payments and failed to pay late fees associated with those missed payments, which prompted Fairbanks Capital to accelerate their mortgage and hire Pierce & Associates to institute a foreclosure action. Had the Rizzos sought to reinstate their mortgage within 90 days as Illinois law provides, see 735 ILL. COMP. STAT. 5/15-1602; Colon v. Option One Mortgage Corp., 319 F.3d 912, 919 (7th Cir.2003), reinstatement could have been “effected by curing all defaults then existing” at the time of reinstatement. 735 III. Comp. Stat. 5/15-1602 (emphasis added). Because the Rizzos did not elect to reinstate within the statutorily prescribed period, their efforts to do so were governed by the terms of their agreement with Fairbanks Capital rather than Illinois mortgage law.
*795Had the Rizzos attempted to reinstate during the statutory period, they would have been required to pay only the monthly payments and late fees that they had failed to pay in the months prior to acceleration, and to bring their loan current by paying Fairbanks for the monthly payments that would have come due between acceleration and reinstatement had acceleration never occurred. See Restatement (THIRD) Of PROPERTY (MORTGAGES) § 8.1 cmt. e (1997). The majority’s opinion should not be read to hold borrowers liable for late fees on the monthly payments that would have come due in the intervening months had acceleration never occurred, if they sought to reinstate their mortgage during the statutorily prescribed period. Such borrowers would not be in default on any of these “missed” monthly payments because they would never have been obligated to make those payments during the post-acceleration pre-reinstatement period (ie., acceleration stops the payments from actually coming due). It would follow then that they could never have “failed” to make those payments.1 See, e.g., Sec. Mut. Life Ins. Co. of N.Y. v. Contemporary Real Estate Assocs., 979 F.2d 329, 331 (3d Cir.1992); see also cases in majority opinion at note l.2
The Rizzos’ situation is governed by the terms of their mortgage rather than Illinois mortgage law. The majority’s opinion should not be read to allow debt collectors to collect unauthorized fees from borrowers who properly 'exercise their statutory right to reinstate their mortgage, which would violate the FDCPA, see 15 U.S.C. § 1692f(l). For the foregoing reasons, I respectfully concur in the judgment of the court.

. To hold otherwise would effectively reinstate those "missed” monthly payments retroactively to the date they would have been due (but for acceleration) and then to declare the borrowers in default on those payments for failing to make them on those dates in the past. This would contravene the express statutory language and would not be supported by any existing law. It would also be presuming that those reinstating borrowers would have failed to timely make those "missed” payments had acceleration not occurred, yet reinstatement wipes clean the borrowers’ slate with respect to all of the missed payments which prompted acceleration in the first place. 735 Ill. Comp. Stat. 5/15-1602; Colon, 319 F.3d at 919 ("Reinstatement leaves the mortgage documents in place as if no default or acceleration had occurred.”).

. If borrowers attempt to cure their defaults post-acceleration by paying the missed monthly payments and the late fees that were due at the time of acceleration, and any post-acceleration monthly payments necessary to make their loan current, lenders are likely obligated in equity to accept the payments and reinstate the mortgage. See Fed. Nat. Mortgage Ass'n v. Bryant, 62 Ill.App.3d 25, 18 Ill.Dec. 869, 378 N.E.2d 333, 336 (1978).