Page 13 - John Hundley 2008

Sharp Thinking

No. 9 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. June 2008

Success at Foreclosure Sale Creates

No Rights in Successful Bidder

By John Hundley, Jhundley@lotsharp.com, 618-242-0246

Being the successful bidder at a mortgage foreclosure sale creates no
right to have that sale confirmed, even if no valid objection to confirmation
could be stated, the Illinois Supreme Court has ruled.

In a decision which had been anxiously awaited for what it might say
about whether trial courts can look to non-statutory considerations in deciding whether to confirm
foreclosure sales, the Court said that the plaintiff mortgagee was the master of its action and if it
wanted to withdraw its motion to confirm it could do so. Household Bank, FSB v. Lewis, 2008
WL 2132467, No. 104826 (Ill. S. Ct. slip op. May 22, 2008). Upon the plaintiff’s withdrawal of the
motion to confirm, a statutory prerequisite to confirmation under the Illinois Mortgage Foreclosure Law
(735 ILCS 5/15-1101 et seq.) (“IMFL”) was missing, and confirmation was not proper even if none of
the other statutory bases for objecting to confirmation applied, the Court ruled.

The issue in Lewis arose when the property owner, disappointed with the result of the foreclosure
sale, asked that confirmation be delayed to see if she could sell the property for a better price herself.
The trial court permitted the delay, and the owner obtained a considerably better price in a proposed
private transaction. Because the private sale price would result in the mortgagee receiving most of
what otherwise would have been a deficiency, it agreed to the proposed private sale and withdrew its
motion to confirm the foreclosure sale. The trial court vacated the foreclosure sale and the successful
bidder at that sale appealed.
The Appellate Court for the First District reversed, noting that the property owner’s time for
redemption had expired before she proposed the private sale and that the statute spoke of
confirmation in mandatory terms. It held that the trial court therefore had no discretion to decline to
confirm the sale. 373 Ill.App.3d 420, 869 N.E.2d 351.
That Appellate Court ruling was in open disagreement on the discretion issue with a
decision of another panel of the same court. Mortgage Electronic Reg. Systems, Inc. v. Thomp-
son, 368 Ill.App.3d 1035, 859 N.E.2d 621 (2006). Other recent decisions also had reached divergent
results on the issue, if less openly. Washington Mut. Bank v. Boyd, 369 Ill.App.3d 526, 861 N.E.2d
1041 (2006); Aurora Loan Serv., Inc. v. Craddieth, 442 F.3d 1018 (7th Cir. 2006). When the Court
agreed to accept the appeal in Lewis, it appeared that the dispute over discretion would be decided.

The Supreme Court skirted that issue, however, finding focus thereon “misguided”. This was so,
it said, because in addition to the four factors required to be weighed on confirmation under 735 ILCS

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Sharp Thinking is an occasional newsletter of The Sharp Law Firm, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp
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