Article Library
Blog Home All Blogs
Search all posts for:   

 

View all (522) posts »
 

Illinois: Kane County’s Requirements about Recovery of Pre-Judgment Fees, Costs, Advances, and Disbursements

Posted By USFN, Tuesday, September 01, 2015
Updated: Saturday, September 26, 2015

September 1, 2015

 

by Lee Perres, Jill Rein, and Kimberly Stapleton
Pierce & Associates, P.C. (USFN Member – Illinois)

Editor’s Note: Supplemental information has been provided since this article was published on September 8, 2015 in the USFN e-Update (Sept. 2015 Ed.) That information, received on September 23, 2015, has been added in a separate section at the conclusion of the original article. Scroll down to view it.

In January 2015, Judge Downs replaced Judge Wojtecki as the sitting judge who hears mortgage foreclosure cases in Kane County, Illinois. Shortly thereafter, Judge Downs clarified her interpretation of the Illinois Mortgage Foreclosure Law as it relates to a plaintiff’s recovery of fees, costs, advances, and disbursements that are expended subsequent to the execution of the affidavit of indebtedness supporting the judgment of foreclosure and the entry of the judgment of foreclosure itself.

The court’s ruling: Absent a subsequent amendment to the judgment of foreclosure order, the fees, costs, advances, and disbursements expended by the plaintiff between the date of execution of the affidavit of indebtedness and the entry of the judgment of foreclosure cannot be recouped at confirmation of sale, This ruling is based on a strict reading of 735 ILCS 5/15-1508(b)(1), allowing for the collection of fees and costs arising between the entry of judgment of foreclosure and the confirmation hearing, in conjunction with 735 ILCS 5/15-1506(a)(2), which states that the affidavit of indebtedness contemplates the amount due to the mortgagee at judgment.

Inevitably there exists a gap in time — sometimes significant in scope — between the execution of the affidavit of indebtedness and the entry of judgment. During this time substantial fees, costs, advances, and disbursements may be expended for, among other things, tax payments, property preservation, hazard insurance, etc. Thus, to be able to include in a sales bid and subsequently collect these expenditures at confirmation of sale, a supplemental affidavit of indebtedness is now required to be submitted to the court. Alternatively, these expenditures (if insignificant in sum) can be excluded from the sales bid and the plaintiff can forgo amending its judgment.

Regardless of whether an amendment to judgment is sought, the court’s examination of the dates when expenditures were made requires that satisfactory detail be provided in the calculation of sales bids.

UPDATE — Subsequent Amendment to Judgment Expanded to Second District in Illinois
(information received September 23, 2015)


Recently this author’s firm advised that the judge hearing mortgage foreclosure cases in Kane County, Illinois (Judge Downs) clarified her interpretation of the Illinois Mortgage Foreclosure Law (IMFL) as it relates to the plaintiff’s recoverability of fees, costs, advances, and disbursements that are expended subsequent to the execution of the affidavit of indebtedness that supports the judgment of foreclosure and the entry of the judgment of foreclosure itself. In January 2015 Judge Downs ruled, absent a subsequent amendment to the judgment of foreclosure order, fees, costs, advances, and disbursements (expended by the plaintiff between the date of execution of the affidavit of indebtedness and the entry of the judgment of foreclosure) cannot be recouped at confirmation of sale.

The court based its ruling on a strict reading of 735 ILCS 5/15-1508(b)(1), which allows for the collection of fees and costs arising between the entry of judgment of foreclosure and the confirmation hearing, in conjunction with 735 ILCS 5/15-1506(a)(2), which states that the affidavit of indebtedness contemplates the amount due to the mortgagee at judgment.

On August 20, 2015 the Second District Appellate Court for Illinois found that the bank was not entitled to recover a $470,340 real estate tax payment where the bank could have, but did not, amend the judgment of foreclosure prior to the sale to include the prejudgment tax payment that the bank made about one month prior to the hearing on the bank’s motion for summary judgment. See BMO Harris Bank, N.A. v. Wolverine Properties, LLC, 2015 Ill. App. (2d) 140921 (Aug. 20, 2015). The general rule in Illinois is that but for conflict among districts, a decision is not confined to any particular district unless another district appellate court finds differently.

During the time between execution of the affidavit of indebtedness and the entry of judgment, substantial fees, costs, advances, and disbursements may be expended (i.e., tax payments, property preservation, hazard insurance, etc.). In order to include these expenditures in a sales bid and to subsequently collect these expenditures at confirmation of sale, a supplemental affidavit of indebtedness is now required to be submitted to the court with a motion to amend the judgment. The court must amend the judgment to include any additional pre-judgment expenditures prior to the date of sale. If amendment does not occur prior to the sale, the plaintiff will need to set aside the sale, amend the judgment, and conduct a new sale. Id. at ¶23. Alternatively, if it is not cost-effective to seek recovery of these expenditures, they can be excluded from the sales bid and the plaintiff can forgo amending its judgment.

©Copyright 2015 USFN and Pierce & Associates, P.C. All rights reserved.
September e-Update

This post has not been tagged.

Share |
Permalink | Comments (0)
 
Membership Software Powered by YourMembership.com®  ::  Legal