Court Opinion

ID: 9382000
Source: CourtListenerOpinion
Date Created: 2023-03-24 15:03:59.212701+00
Date Added: 2024-06-11T17:17:36.383513
License: Public Domain

2023 IL App (1st) 220413

                                                                                     SIXTH DIVISION
                                                                             Filing Date March 24, 2023

                                                  No. 1-22-0413
     ______________________________________________________________________________
                                         IN THE
                             APPELLATE COURT OF ILLINOIS
                                FIRST JUDICIAL DISTRICT
     ______________________________________________________________________________

     EASTERN SAVINGS BANK, FSB,                                     )
                                                                    )      Appeal from the
                            Plaintiff-Appellee,                     )      Circuit Court of
                                                                    )      Cook County.
        v.                                                          )
                                                                    )      No. 17 CH 03732
     VALERIE ANDREWS-LEWIS,                                         )
                                                                    )      The Honorable
                            Defendant-Appellant.                    )      Marian E. Perkins,
                                                                    )      Judge, Presiding.

                 JUSTICE ODEN JOHNSON delivered the judgment of the court, with opinion.
                 Justices C. A. Walker and Tailor concurred in the judgment and opinion.

                                                  OPINION

¶1           Defendant Valerie Andrews-Lewis appeals pro se from the order of the circuit court of

       Cook County confirming the sale of her residence at 2104 East 73rd Street (the property) in

       Chicago in favor of Eastern Savings Bank (Eastern Savings). On appeal, defendant argues that:

       (1) the circuit court erred in confirming the sale of the property despite learning that defendant

       never received a loss mitigation denial letter on her loan modification application as required

       by section 1024.41 of the Real Estate Settlement Procedures Act (RESPA) (Regulation X) (12
     No. 1-22-0413

        C.F.R. § 1024.41) for plaintiff to proceed with a foreclosure complaint; (2) the circuit court

        erred by confirming the sale of the property despite learning that defendant submitted a loan

        modification application under the Home Affordable Modification Program (HAMP) which

        was not appropriately processed in accordance with RESPA Regulation X by plaintiff, causing

        defendant to no longer be eligible for the program; and (3) the circuit court erred by confirming

        the sale of the property by ignoring a preponderance of the evidence that showed that plaintiff

        neglected defendant’s numerous attempts to modify her loan and end her delinquency across

        the life of the loan and afterward. For the following reasons, we affirm.

¶2                                           I. BACKGROUND

¶3          The background information comes from the various pleadings filed by the parties in the

        course of litigation related to this case.

¶4          On April 19, 2007, defendant executed a Mortgage and Note for $87,000 for the property.

        The note and mortgage were attached to Eastern Savings’ foreclosure complaint as exhibits,

        and were verified by Paul Buckingham, a senior asset manager of Eastern Savings. According

        to defendant, she struggled to maintain the loan payments from the beginning, and in

        November 2016, hired the Law Office of Matthew Wildermuth to assist her in securing a

        HAMP loan modification before the deadline of December 31, 2016. She indicated that her

        loan application was successfully submitted to Eastern Savings on December 20, 2016, but she

        never knew that her loan modification was denied until January 25, 2017.

¶5          Eastern Savings filed its verified mortgage foreclosure complaint on March 15, 2017, and

        defendant was personally served with the summons and complaint on June 6, 2017. Eastern

        Savings subsequently filed a motion for default scheduled for hearing on September 13, 2017.

        At the hearing, counsel appeared on defendant’s behalf and was granted 28 days to respond.

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        Defendant’s counsel filed an answer on October 11, 2017. Eastern Savings subsequently filed

        its combined motion for default and summary judgment of foreclosure and sale on November

        20, 2017, which was scheduled for hearing on December 11, 2017. A briefing schedule was

        entered with a new hearing date of February 14, 2018, but defendant never filed a response.

        On February 14, 2018, the circuit court entered an order of summary judgment and judgment

        of foreclosure and sale. The initial sale date was May 15, 2018.

¶6         On May 2, 2018, defendant filed for Chapter 13 bankruptcy protection, and an automatic

        stay of the sale was entered. The bankruptcy was later converted to a Chapter 7 bankruptcy on

        July 19, 2019. On June 5, 2019, defendant filed an adversary action against Eastern Savings

        through different counsel, alleging violations of the Illinois Consumer Fraud and Deceptive

        Business Practices Act (Consumer Fraud Act), seeking declaratory relief to declare the

        mortgage void, and alleging violations of the Federal Fair Housing Act (FHA). On September

        18, 2019, the Bankruptcy Court granted Eastern Savings’ motion to modify the stay and

        proceed with foreclosure. Additionally, on October 24, 2019, the Bankruptcy Court granted

        Eastern Savings’ motion to dismiss the adversary complaint with prejudice.

¶7         Back in the circuit court, the judicial sale was then set for December 5, 2019, but defendant

        filed an emergency motion to stay the sale, which was granted. Subsequently, the judicial sale

        was held on January 21, 2020, with Eastern Savings as the successful bidder. Eastern Savings’

        motion to confirm the sale was initially set for hearing on February 25, 2020, but was continued

        until March 3, 2020. On March 3, 2020, defendant appeared pro se and made arguments that

        were unrelated to the sale of the property. The circuit court granted her leave to file a response

        to the motion for an order approving the sale by March 31, 2020, and the hearing was continued

        to May 5, 2020. However, defendant did not file a response by the due date. Additionally, the

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        hearing was continued due to the Covid-19 shutdown and the moratorium on the confirmation

        of judicial sales.

¶8          On January 22, 2021, defendant filed a pro se answer, affirmative defenses and

        counterclaim without leave of court, which was stricken with prejudice on March 18, 2021.

        Defendant later filed her response to the motion for order approving sale on May 17, 2021,

        arguing that the sale of the property would be unconscionable due to a breach of contract

        concerning her escrow account; the mortgage, security instrument and note were

        unconscionable; and Eastern Savings prevented defendant from raising those defenses at an

        earlier time. Eastern Savings filed a response, and a hearing was scheduled for June 7, 2021.

        However, the moratorium on approving judicial sales was still in effect, so the motion was

        continued several times until December 6, 2021. On that date, the circuit court inquired about

        the status of the law license of one of defendant's prior legal counsel, Matthew Wildermuth,

        and the matter was continued for further research into that issue. The circuit court informed

        defendant that one of her attorneys, Attorney Wildermuth, had been suspended during the time

        that the firm represented defendant in the foreclosure proceedings. The hearing on the motion

        to approve the sale was continued until January 10, 2022.

¶9          On January 10, 2022, Eastern Savings presented a history of defendant’s representation by

        Attorney Wildermuth during the case, and it was revealed that he never made a filing on

        defendant’s behalf. During Attorney Wildermuth’s first suspension, an attorney in good

        standing from the Wildermuth firm filed an appearance on defendant’s behalf, and after the

        first suspension ended, another attorney in good standing from the Wildermuth firm filed an

        answer on defendant’s behalf. The law firm was not representing defendant when Attorney

        Wildermuth was suspended a second time. The circuit court then asked Eastern Savings to

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          provide documentation       regarding    defendant’s    loan   modification    during   Attorney

          Wildermuth’s representation, and the hearing was continued to February 22, 2022. Both sides

          were also granted leave to file additional pleadings.

¶ 10         Eastern Savings presented evidence to the circuit court that a loan modification application

          was submitted by defendant’s prior counsel as well as a copy of the loan mitigation denial

          letter dated January 31, 2017. In defendant’s sur-response pleading, she argued that her

          previous counsel improperly represented her and she was denied the ability to bring matters to

          the court before the sale of her home and that she did not receive a formal loss mitigation denial

          letter. The circuit court entered the order confirming the judicial sale on February 22, 2022,

          after a hearing. No report of proceedings or bystander’s report from the hearing (or any of the

          hearings before the circuit court) is included in the record. Defendant filed her timely pro se

          notice of appeal on March 24, 2022.

¶ 11                                            II. ANALYSIS

¶ 12         On appeal, defendant contends that: (1) the circuit court erred in confirming the sale of the

          property despite learning that defendant never received a loss mitigation denial letter on her

          loan modification application as required by section 1024.41 of the Real Estate Settlement

          Procedures Act (RESPA) (Regulation X) (12 C.F.R. § 1024.41) for plaintiff to proceed with a

          foreclosure complaint; (2) the circuit court erred by confirming the sale of the property despite

          learning that defendant submitted a HAMP loan modification application which was not

          appropriately processed in accordance with RESPA Regulation X by plaintiff, causing

          defendant to no longer be eligible for the program; and (3) the circuit court erred by confirming

          the sale of the property by ignoring a preponderance of the evidence that showed that plaintiff

          neglected defendant’s numerous attempts to modify her loan and end her delinquency across

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          the life of the loan and afterward. Though framed differently, defendant’s issues all challenge

          the entry of the order confirming the judicial sale of the property and will be considered as a

          single issue. We begin our discussion with the appropriate standard of review.

¶ 13         Defendant contends that the standard of review should be de novo because the circuit court

          made a mistake in applying the law. Eastern Savings, on the other hand, contends that the

          appropriate standard of review is abuse of discretion.

¶ 14         At issue on appeal is whether the circuit court properly confirmed the judicial sale of the

          property. It is well settled that a motion to vacate the sale pursuant to section 15-1508(b) of the

          Foreclosure Law (735 ILCS 5/15-1508(b) (West 2020)) is within the circuit court’s discretion

          to either grant or deny, and will not be disturbed absent an abuse of that discretion.

          CitiMortgage v. Lewis, 2014 IL App (1st) 131272, ¶ 31. Similarly, the standard of review for

          a motion to confirm the sale is also an abuse of discretion. Id. Accordingly, where, as here, the

          plaintiff has filed a motion to confirm sale and the defendant then files a motion to set aside

          the sale, the standard of review for both motions is an abuse of discretion. Id. Thus, contrary

          to defendant’s assertion, the standard of review to be applied is abuse of discretion.

          CitiMortgage, Inc. v. Bermudez, 2014 IL App (1st) 122824, ¶ 57. A circuit court abuses its

          discretion when its ruling rests on an error of law or where no reasonable person would take

          the view adopted by the circuit court. Id. The party opposing the foreclosure sale bears the

          burden of proving that sufficient grounds exist to disapprove the sale. Lewis, 2014 IL App (1st)

          131272, ¶ 31.

¶ 15         We now address defendant’s various contentions that the circuit court erred in confirming

          the judicial sale of the property. To restate her arguments, defendant contends that the sale

          should not have been confirmed because: (1) she did not receive a formal loan modification

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          denial as required under RESPA, and (2) Eastern Savings failed to process her loan

          modification application in an appropriate manner which caused her to be ineligible for a

          HAMP modification, because the application deadline was December 31, 2016. She further

          contends that the foreclosure was invalid because the lender neglected her attempts at

          modification over the life of the loan.

¶ 16         A judicial foreclosure sale is not complete until it has been approved by the circuit court.

          Bermudez, 2014 IL App (1st) 122824, ¶ 59. The highest bid received at a judicial sale is merely

          an irrevocable offer to purchase the subject property, the acceptance of which occurs when the

          court confirms the sale. Citicorp Savings v. First Chicago Trust Co., 269 Ill. App. 3d 293, 300

          (1995). Typically, section 15-1508(b) governs the circuit court’s analysis in approving or

          disapproving a sale and is the only means by which a defendant can set aside a sale. Bermudez,

          2014 IL App (1st) 122824, ¶ 59. Under that section, the circuit court shall confirm the sale

          unless it finds that: (i) a notice required in accordance with subsection (c) of Section 15-1507

          was not given, (ii) the terms of the sale were unconscionable, (iii) the sale was conducted

          fraudulently, or (iv) justice was otherwise not done. 735 ILCS 5/15-1508(b) (West 2020). As

          noted by our supreme court, section 15-1508(b) imposes a mandatory obligation on a court to

          conduct a hearing on confirmation of a judicial sale where a motion to confirm has been filed

          and notice given, and following the hearing, to confirm the sale unless it finds that any of the

          four specified exceptions are present. Household Bank, FSB v. Lewis, 229 Ill. 2d 173, 178

          (2003). The burden is on the party opposing confirmation to prove that sufficient grounds exist

          to disapprove the sale. TCF National Bank v. Richards, 2016 IL App (1st) 152083, ¶ 48.

¶ 17         However, under the version of section 15-1508(d-5) in effect when the foreclosure action

          was filed against defendant, the circuit court could set aside a judicial sale upon motion of the

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          mortgagor at any time prior to the confirmation of the sale, if the mortgagor proved by a

          preponderance of the evidence that the mortgagor applied for assistance under HAMP and the

          mortgaged real estate was sold in material violation of the program’s requirements for

          proceeding to a judicial sale. 735 ILCS 5/15-1508(d-5) (West 2020). The provisions of that

          section became inoperable on January 1, 2018, for all actions filed under it after December 31,

          2017, where the mortgagor did not apply for assistance under HAMP on or before December

          31, 2016. Id.

¶ 18         In comparing the arguments defendant raises on appeal with those she raised in the circuit

          court in her response to the motion for order approving sale on May 17, 2021, we find that

          defendant has raised these arguments for the first time on appeal and they were not considered

          by the circuit court in ruling on the motion to confirm the judicial sale. In the circuit court,

          defendant argued only that the sale of the property would be unconscionable due to a breach

          of contract concerning her escrow account; the mortgage, security instrument and note were

          unconscionable; and Eastern Savings prevented defendant from raising those defenses at an

          earlier time. Defendant did not raise any issue concerning the lack of the loan modification

          denial letter or an inappropriately processed HAMP application in the circuit court, and she

          has apparently abandoned those arguments on appeal that were raised in the circuit court.

          Issues not raised in the circuit court generally are forfeited and may not be raised for the first

          time on appeal. Deutsche Bank National Trust Company as Trustee for Morgan Stanley ABS

          Capital I Inc. Trust 2004-WMC2 v. Cortez, 2020 IL App (1st) 192234, ¶ 32. As such,

          defendant’s issues regarding the confirmation of the judicial sale are forfeited.

¶ 19         However, the forfeiture rule is an admonition to the parties and not a limitation on the

          jurisdiction of this court. Id. This court may overlook forfeiture where necessary to obtain a

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          just result or maintain a sound body of precedent. Id. That said, we will overlook defendant’s

          forfeiture and review her claims of error on the merits.

¶ 20          Defendant’s claims of error appear to fall under the “justice was not otherwise done”

          exception under section 15-1508(b)(iv) of the Foreclosure Law. A court is justified in refusing

          to confirm a judicial sale if unfairness is shown which is prejudicial to an interested party. 735

          ILCS 5/15-1508(b) (West 2020). Section 15-1508(b)(iv) does not specify the circumstances

          that constitute an injustice, but our supreme court has stated that this section “appears to merely

          codify the long-standing discretion of the courts of equity to refuse to confirm a judicial sale.”

          Wells Fargo Bank, N.A. v. McCluskey, 2013 IL 115469, ¶ 19. To vacate a sale based on

          injustice, the defendant must demonstrate “that justice was not otherwise done because either

          the lender, through fraud or misrepresentation, prevented the borrower from raising [her]

          meritorious defense to the complaint at an earlier time in the proceedings, or the borrower has

          equitable defenses that reveal she was otherwise prevented from protecting her property

          interests. Id. ¶ 26.

¶ 21          Here, defendant specifically argues that the circuit court erred in confirming the judicial

          sale of the property because she never received a loan modification denial letter as required by

          RESPA, that Eastern Savings inappropriately handled her modification application and that

          Eastern Savings neglected her many attempts at modification over the life of the loan. She

          further contends that Eastern Savings, by way of fraud and misrepresentation, prevented her

          from raising her meritorious defenses to the complaint which prevented her from protecting

          her property interests. She contends that, under RESPA §1024.41 (12 C.F.R. §1024.41) in

          effect at the time her loan modification application was submitted, Eastern Savings Bank was

          required to notify the borrower within five days of receipt of the application whether the

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           application was complete or incomplete. Further, complete loss mitigation applications

           received more than 90 days before a foreclosure sale will receive a response within 30 days

           outlining any available loss mitigation options and subsequent appeals process. Defendant

           contends that because her application for loan modification was submitted more than 90 days

           prior to the sale of the property, she was entitled to a written notice of application status and

           the corresponding requirements. She further contends that this court has previously found that

           lack of proof that a mandatory notice was delivered constitutes a question of fact whether a

           condition precedent was satisfied for the foreclosure action, citing Deutsche Bank National

           Trust Co. as Trustee for the First Franklin Mortgage Loan Trust 2005-FF8, Mortgage Pass-

           Through Certificates, Series 2006-FF8 v. Roongseang, 2019 IL App (1st) 180948, ¶ 38. 1

           However, that case is distinguishable as it was an appeal from the entry of summary judgment

           of the foreclosure itself as well as the order confirming the judicial sale, and this court found

           that an issue of fact existed to defeat the summary judgment motion. That is not the situation

           presented here where defendant failed to contest the summary judgment for foreclosure within

           30 days of its entry on February 14, 2017, and is instead contesting the confirmation of judicial

           sale.

¶ 22           Moreover, we note that Eastern Savings responds that it did provide a notice of loan

           mitigation denial to defendant. The record reveals that a loan mitigation denial letter dated

           January 31, 2017, was presented to the circuit court prior to the hearing on February 22, 2022.

           Defendant argues on appeal, however, that she did not receive the letter. Defendant provides

           no explanation for why she did not raise this issue sooner or why she failed to contest the

               1
                  We note that defendant failed to cite to the complete case name or pinpoint citation paragraph in
       her brief in violation of Rule 341(h)(7) (eff. Oct. 1, 2020).

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          summary judgment of foreclosure either before its entry or within 30 days of its entry. While

          defendant may have made such arguments before the circuit court, the record does not contain

          a report of proceedings or bystander’s report of the hearing, thus we are unable to consider any

          arguments she may have made at that time. An appellant bears the burden of presenting a

          sufficiently complete record of the proceedings in the circuit court to support a claim of error.

          Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984). In the absence of such record on appeal, it

          will be presumed that the order entered by the circuit court was in conformity with law and

          was supported by an adequate factual basis. Id. at 392. Any doubts arising from the

          incompleteness of the record will be resolved against the appellant. Id. Thus, we have to

          presume that the circuit court considered all arguments raised at the hearing and apparently

          resolved the issue regarding the denial letter against defendant.

¶ 23         Additionally, although defendant argues that she did not receive the letter, she does not

          dispute that she learned that her loan modification was denied on January 25, 2017, which was

          approximately six weeks before the foreclosure action was filed, and certainly well before the

          judgment of foreclosure was entered. She does not point to any specific actions by Eastern

          Savings that fraudulently or otherwise prevented her from making her meritorious defenses to

          the foreclosure action.

¶ 24         Eastern Savings further contends that, as a small services lender, it was not subject to the

          requirements of RESPA’s loss mitigation rule. Under section 1026.41(e)(4) (12 C.F.R.

          1026.41(e)(4)) of RESPA, a small servicer is defined as a servicer that services 5000 or fewer

          mortgage loans, for all of which the servicer is the creditor or assignee. Additionally, section

          1024.30(b) exempts small servicers from the requirements of section 1024.41, except section

          1024.41(j), which specifically applies to foreclosure prohibition when a borrower is

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          performing pursuant to the terms of an agreement on a loss mitigation option. 12 C.F.R.

          §1024.41(j). Moreover, Eastern Savings maintains conversely that defendant’s claims of pre-

          foreclosure violations of RESPA are not properly raised at the sale confirmation stage.

¶ 25         Defendant’s only response to this is that Eastern Savings’ action of ignoring her loan

          modification request and giving her limited time to pull resources for the offer made were in

          bad faith. We find this insufficient to rebut the fact that per RESPA, Eastern Savings was

          exempt from certain requirements under section 1024.41.

¶ 26         Defendant’s next contention, that Eastern Savings failed to properly process her loan

          modification application in accordance with RESPA suffers the same fate, as Eastern Savings

          was not subject to the RESPA provisions that defendant claims it was.

¶ 27         Defendant’s final argument is that the circuit court ignored “a preponderance of the

          evidence that showed Plaintiff neglected Defendant’s numerous attempts to modify her loan

          and end her delinquency across the life of the loan and afterward.” She claims that this satisfies

          the “justice has not been done” exception of section 15-1508(b)(iv). We disagree.

¶ 28         As noted above, to vacate a sale based on injustice, the defendant must demonstrate “that

          justice was not otherwise done because either the lender, through fraud or misrepresentation,

          prevented the borrower from raising [her] meritorious defense to the complaint at an earlier

          time in the proceedings, or the borrower has equitable defenses that reveal she was otherwise

          prevented from protecting her property interests.” McCluskey, 2013 IL 115469, ¶ 26. Here, the

          record does not support defendant’s assertion that she was somehow precluded by Eastern

          Savings from raising any meritorious defenses, nor does she state what those equitable

          defenses are. As noted above, defendant offers no explanation for why she failed to respond to

          the summary judgment motion for foreclosure in 2018. Further, by her own admissions in her

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          brief, defendant stated that she struggled to make the mortgage payments since the beginning

          of the loan and that she had applied for, and defaulted on, several forbearance options offered

          by the lender. The record even indicates that defendant was unable to make the payments under

          her Chapter 13 bankruptcy. Defendant also admits in her brief that she had actual knowledge

          that her loan modification was denied in January 2017, prior to the filing of the foreclosure

          action. Defendant appears to contend that because her attempts at loan modification were

          rejected by Eastern Savings, those rejections amount to fraud that prevented her from

          protecting her property.

¶ 29         As sympathetic as we are with any family losing their home to foreclosure, the fact remains

          that defendant has not identified any meritorious defense she was prevented from making nor

          has she shown how she could have otherwise taken any action to stop the judicial sale.

          Defendant’s claims on appeal fail to show how the February 2022 order confirming the January

          2020 judicial sale showed that justice was not done. Again, defendant has not provided this

          court with a report of proceedings or bystander’s report, therefore we must presume that the

          circuit court’s order was entered in conformity with the law and had a sufficient factual basis.

          Foutch, 99 Ill. 2d at 392. We therefore conclude that the circuit court did not abuse its

          discretion in confirming the judicial sale.

¶ 30                                         III. CONCLUSION

¶ 31         Accordingly, the judgment of the circuit court of Cook County is affirmed.

¶ 32         Affirmed.

¶ 33

¶ 34

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