The Appellate Court of Illinois, First District, recently affirmed a trial court order confirming the sale of a foreclosed property, holding that that a public notice of sale stating that the property contained a "single family residence" complied with the Illinois Foreclosure Law's requirement to sufficiently describe "improvements on the real estate."
A copy of the opinion is available at: Link to Opinion
After a default, a mortgagee filed suit to foreclose a mortgage loan against a borrower. The trial court entered a judgment of foreclosure and sale in favor of the mortgagee. Thereafter, a buyer purchased the property at a judicial sale for $90,000.
The borrower opposed confirming the sale by arguing that the notice of sale which described the improvements upon the land as a "single family residence" failed to adequately describe the improvements on the real estate as required by section 15-1507(c)(1)(D) of the Illinois Foreclosure Law. The trial court found that the mortgagee had properly given all required notices, confirmed the sale, and entered a $250,619.23 in rem deficiency on the property.
The borrower timely appealed the order confirming the sale.
The Appellate Court initially recognized that borrower appealed under section 15-1508(b) of the Foreclosure Law which provides that the trial court "shall" confirm a judicial sale of property absent the court finding that one of the following four grounds exist to set aside the sale: "(i) a notice required in accordance with subsection (c) of Section 15-1507 was not given, (ii) the terms of sale were unconscionable, (iii) the sale was conducted fraudulently, or (iv) justice was otherwise not done." Further, under section 15-1508(d), no sale under 15-1508(b) shall be "set aside because of any defect in notice" unless there is a showing of "good cause."
Under section 15-1508(b)(i), notice must be provided in accordance with section 15-1507(c), which requires "public notice of the sale." Section 15-1507(c)(1) provides that "[t]he notice of sale shall include at least the following information, but an immaterial error in the information shall not invalidate the legal effect of the notice." This section outlines what to include in the notice of sale including the following: "(B) the common address and other common description (other than legal description), if any, of the real estate; (C) a legal description of the real estate sufficient to identify it with reasonable certainty; (D) a description of the improvements on the real estate."
At issue here is whether the notice adequately provided a "a description of the improvements on the real estate" under section 15-1507(c)(1)(D). The Appellate Court noted that the purpose of this information is to inform prospective buyers about the property.
The Appellate Court rejected the borrower's argument that merely stating that a "single family residence" improves the real estate on the notice does not comply with section 15-1507(c)(1)(D) because it does not sufficiently give prospective buyers notice of the improvements on the property.
The Appellate Court observed that this section requires the sale notice to include a "litany of information about the property in the notice of sale, such as the case name and number, common address, legal description, and improvements on the real estate." This information allows a prospective buyer to "(1) request to review the mortgage foreclosure case file at the clerk's office, (2) visit the property for sale, (3) obtain information from the Cook County Assessor pertaining to the property, and (4) obtain information from the Cook County Recorder of Deeds."
The Appellate Court found that if prospective buyers required any additional information regarding the property, then they could so do so by contacting the seller because section 15-1507(c)(1) also requires the notice of sale to include "the name, address and telephone number of the person to contact for information regarding the real estate." The plain language of this section demonstrates the legislatures intent to give prospective buyer's sufficient information to perform their due diligence before they bid on the property.
Thus, the Appellate Court held that the mortgagee's description of the real estate improvements on the property as a "single family residence" together with the other information contained in the notice sufficiently provided "the prospective buyer with enough information so as to allow them to perform their due diligence and thus satisfied section 15-1507(c)(1)(D)."
In the Appellate Court's view, the Cook County Assessor's website also supported its conclusion that the notice here was sufficient. The Assessor's webpage for this property provided prospective buyers with the following information on the property: "(1) a photograph picturing the front of the residence, (2) the square footage of land (3750), (3) the square footage of the building (1108), (4) the age of the residence (63), (5) number of bathrooms (1), and (6) exterior construction (masonry)." The Assessor's webpage also notified prospective buyers that the property had "a two-car detached garage and a full but unfinished basement." In addition, the Assessor's webpage informed prospective buyers that the property did not have "central air conditioning, fireplaces, or an attic."
The Appellate Court concluded that where this "level of detail is readily available and easily searchable" the notice of sale stating that the property contained a "single family residence" sufficiently described the improvements to the real estate to allow prospective buyers to do their due diligence before bidding at the sale.
Thus, the borrower failed to show the necessary "good cause" required under section 15-1508(d) to invalidate the sale.
The Court found that the section 15-1507(c)(1)(D)'s language that "an immaterial error in the information shall not invalidate the legal effect of the notice" further supports this conclusion. Even if there was any error, it was not material because the information provided in the notice was sufficient for prospective buyers "to perform their due diligence in researching the property prior to bidding at a judicial sale."
Also, the borrower failed to come forward with any admissible evidence showing that the sale price was inadequate and mere speculation is not sufficient to meet the borrower's burden to prove that the property sold for substantially less than its actual value as a result of the mortgagee's failure to give adequate notice.
Finally, the deficiency judgment entered was only in rem against the property, not against the borrower individually.
Therefore, the Appellate Court affirmed the trial court's judgment.
Ralph T. Wutscher
Maurice Wutscher LLP
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