Tuesday, November 6, 2012

Wells Fargo v. McCluskey - A Big Win for Illinois Homeowners in Foreclosure

Second District Appeals Court Declines to Adopt MERS v. Barnes

In what will surely be a landmark decision in Illinois mortgage foreclosure law, the Appellate Court of Illinois for the Second District recently ruled, in Wells Fargo Bank, N.A. v. McCluskey, 2012 IL App (2d) 110961, that homeowners in foreclosure may file motions to vacate (known as 2-1301 motions in Illinois) even after the foreclosure sale has been conducted. 

This is a HUGE victory for homeowners facing foreclosure in the Second District (Jo Daviess, Stephenson, Winnebago, Boone, McHenry, Lake, Carroll, Ogle, Lee, De Kalb, Kane, Kendall and DuPage counties).  The Second District Court departed from a decision in the First District, See Mortgage Electronic Registration Systems Inc. v. Barnes, 406 Ill.App.3d 1 (2010).  The Second District court found:
"...[W]e disagree with the Barnes court's reasoning that permitting a defendant to file a section 2-1301(e) motion following a judicial sale would threaten to 'evicerate' section 15-1508 of the Foreclosure Law."  McCluskey at 6.
This decision has created a split of authority among the districts in Illinois.  In Cook County (the First District), Barnes tells us that we cannot file 1301 motions after the sale has been conducted.  In the Second District, McCluskey says that Defendants may continue to file these motions under the standards and rules that apply to any 1301 motion (meritorious defense, due diligence, timeliness, discretion of the court etc.)

The lesson for homeowners here remains the same.  If you are facing foreclosure, it is important that you seek the advice of a competent attorney in your area.  Timelines and paperwork are very important in a foreclosure case (and indeed any lawsuit).  You should always make every effort to adhere to the rules set by the court.  For most non-attorneys, this means you should seek to hire an attorney or at least consult with one.

Mark A. Laws is a consumer protection and foreclosure defense attorney based in Chicago Illinois.  He was the lead attorney for the Appellant in Wells Fargo v. McCluskey.

Please email comments to mark@lawsatlaw.com