Articles Posted in Banking

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Defendant Deutsche Bank National Trust Company, as Trustee for Loan Tr. 2004-1, Asset-Backed Certificates, Series 2004-1, purchased a condominium unit at a judicial foreclosure sale in 2010. On March 27, 2012, plaintiff 1010 Lake Shore Association mailed defendant a demand for payment of the unit’s assessments for common expenses. After defendant filed its answer, plaintiff moved for summary judgment arguing there were no questions of material fact on the amount owed or defendant’s failure to pay the assessments. Based on section 9(g)(3) of the Condominium Property Act (Act, 765 ILCS 605/9(g)(3) (West 2008)), plaintiff asserted that the lien against the property for the prior owner’s unpaid assessments had not been extinguished because defendant failed to pay the assessments accruing after it purchased the unit at the judicial foreclosure sale. Defendant responded that it could not be held liable under section 9(g)(3) of the Act for unpaid assessments that accrued before it purchased the unit at the judicial foreclosure sale. Following a hearing, the trial court granted summary judgment for plaintiff, and awarded plaintiff possession of the property. On appeal, defendant contended that the trial court misconstrued section 9(g)(3) of the Act, arguing that a purchaser of a condominium unit at a foreclosure sale is only required to pay the common expenses that accrued following the sale. The appellate court affirmed the trial court, with one justice dissenting. Finding no error in the majority's judgment, the Supreme Court affirmed. View "1010 Lake Shore Ass'n v. Deutsche Bank National Trust Co." on Justia Law

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On October 14, 2010, OneWest Bank sued Standard, as trustee, and unknown trust beneficiaries, to foreclose a “reverse equity” adjustable-rate mortgage on property held by the trust and executed in 2009. Standard filed an answer and counterclaim on July 19, 2011, seeking to rescind the mortgage, alleging violations of the Truth in Lending Act (TILA). 15 U.S.C. 1601. The circuit court dismissed. The appellate court affirmed, reasoning that Standard was not an “obligor” under TILA and was not entitled to rescind the transaction. The Illinois Supreme Court reversed. The trustee has legal and equitable title to the property and is the only party with an ownership interest in the property since the beneficiary’s interest is in the trust itself and is considered personal property. Standard, was entitled to receive TILA disclosures, including notice of the right to rescind after it entered into the consumer credit transaction. Because TILA disclosures were not provided to Standard, the three-day right to rescind period was extended to three years. Standard timely exercised its right to rescind when it gave notice on June 2, 2011. View "Fin. Freedom Acquisition, LLC v. Standard Bank & Trust Co." on Justia Law

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McCluskey executed a promissory note for $330,186, on a Naperville property, with Wells Fargo as the mortgage holder. After service in foreclosure proceedings, McCluskey did not answer or plead. An order of default and judgment of foreclosure entered. After failed negotiations on a loan modification and a rescheduled sale date, Wells Fargo was the successful bidder on the property for a price of $235,985.69. Before Wells Fargo moved to confirm the sale, McCluskey moved to vacate the default judgment and set aside the sale under section 2-1301(e) of the Code of Civil Procedure, rather than the Foreclosure Law (15-1508(b)). The trial court denied her motion and confirmed the sale. The appellate court reversed, holding that the court could exercise discretion under civil procedure law, even after a judicial sale, if the movant could present a compelling excuse for lack of diligence and a meritorious defense. The Illinois Supreme Court reversed. After a motion to confirm a judicial sale, foreclosure law governs and provides standards for exercise of discretion in dealing with a motion to vacate. At that point, it is not sufficient under the foreclosure statute to merely raise a meritorious defense to the complaint. In this case, the motion to vacate preceded the motion to confirm, so the trial court could have considered the motion to vacate under civil procedure law. Under these facts, however, the court did not err in denying the motion, even under that more liberal standard. McCluskey admitted her default, was properly served, and had notice of the default, the judgment of foreclosure, and the sale, then later raised pleading defenses for the first time. View "Wells Fargo Bank, N.A., v. McCluskey" on Justia Law

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Consolidated Grain maintains a grain elevator in La Salle County, sold Rogowski’s crops, and gave him the proceeds by checks paid directly to him. The bank had lent money to Rogowski for which he signed a note and granted the bank a security interest in his crops and any proceeds of their sale. The bank notified Consolidated of its lien by two written notices, one covering crop years 2004 and 2005 and the other covering years 2005 and 2006. The notices listed as covered agricultural commodities “all grain on hand, all growing crops,” without listing their amount or location. The bank obtained a deficiency judgment against Rogowski in 2008, which remains unsatisfied, then sought payment from Consolidated. The trial court ruled in favor of the bank. The appellate court reversed and the supreme court affirmed. The Federal Food Security Act of 1985 provides how notices of security interests are to be worded and provides that there must be a statement of “each county or parish in which the farm products are produced or located,” The court rejected a “substantial compliance” argument and held that the notices were insufficient for failing to strictly comply with the Act. View "State Bank of Cherry v. CGB Enters., Inc." on Justia Law

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In 2005, a mortgage was entered into as to property in Naperville. The loan was eventually sold to EMC, which obtained a judgment of foreclosure in 2009. The debtor’s request to have the 2009 foreclosure judgment vacated was denied, as was her subsequent motion to reconsider that denial. To both of these adverse orders, Supreme Court Rule 304(a) language (that there was no just reason for delaying either enforcement or appeal) was added, and the debtor appealed. The appellate court, however, dismissed for lack of jurisdiction. The Illinois Supreme Court agreed and affirmed. Although a foreclosure judgment is final as to what it adjudicates, it is not appealable until entry of an order approving the sale and directing distribution. The orders to which the circuit court added Rule 304(a) language were not themselves final for purposes of appeal. There is no court rule permitting appeal of the nonfinal orders at issue here, and Rule 304(a) cannot confer appellate jurisdiction where none exists. View "EMC Mortg. Corp. v. Kemp" on Justia Law