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Illinois: Pre-Judgment Post-Affidavit Expenditures are Not Recoverable Absent Subsequent Amendment to Judgment … Expanded to Cook County and Spreading

Posted By USFN, Tuesday, January 5, 2016
Updated: Tuesday, January 19, 2016

January 5, 2016


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

The Second District Court of Appeals for Illinois found that a plaintiff 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 a prejudgment tax payment. About one month prior to the hearing on the bank’s motion for summary judgment, the bank had made the prejudgment tax payment. See BMO Harris Bank, N.A. v. Wolverine Properties, LLC, 2015 Ill. App. (2d) 140921 (Aug. 20, 2015). Until recently, this requirement was limited to the Second District; that is, the counties of Boone, Carroll, DeKalb, DuPage, Jo Daviess, Kane, Kendall, Lake, Lee, McHenry, Ogle, Stephenson, and Winnebago.

Following the Second District Court of Appeals, Judge Brennan in Cook County ruled that 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), allowing 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 the mortgagee at judgment.

The general rule in Illinois is that, excluding a conflict among districts, a judicial decision is not confined to any particular district — unless and until another district appellate court finds differently. The ruling in Wolverine appears to be spreading across the state as defense counsel becomes aware of its effect. To stay ahead of the trend, servicers and lenders should apply the Wolverine principle statewide.

To reiterate — 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., taxes, property preservation, hazard insurance, etc.). In order to include these expenditures in a sales bid and to subsequently collect them 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. Alternatively, if it is not cost-effective to seek recovery of these expenditures, the expenditures can be excluded from the sales bid and the plaintiff may forgo amending its judgment.

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