Page 14 - John Hundley 2008

5/15-1508(b), there is the requirement that confirmation occur “[u]pon motion and notice in
accordance with court rules”. The withdrawal of the motion to confirm prevented triggering of the four
statutory factors, which the Court at times appeared to recognize were mandatory when confirmation
was properly sought.
Several observations may be made in the wake of this important decision.

First, little in the opinion can be read to create any rights in the owner-mortgagor. The
Court did not recognize any right to extension of the statutory redemption period, nor any right to
equitable redemption, nor any right to prevail if confirmation is sought by the mortgagee over the
mortgagor’s objection. It repeatedly characterized the owner-mortgagor’s ability to satisfy the
mortgage through the private sale as one of “grace” extended by the mortgagee.

Second, the argument over the trial court’s discretion on confirmation is likely to continue.
While the Court at times termed the § 15-1508(b) factors “mandatory,” it also suggested those factors
“confer[] on circuit courts broad discretion in approving or disapproving judicial sales”. Lewis thus
seems to put off to another day what judicial action may constitute an abuse of discretion in light of
the “justice was not otherwise done” factor in § 15-1508(b).

Third, Lewis will contribute to the tendency for foreclosure sales to be largely mortgagee-
only occurrences. Under Lewis, a successful mortgagee bidder has control over whether
confirmation of his bid will be sought, while an outsider has no say on that point if his bid is accepted.
Also, the mortgagee, as the judgment creditor, usually is able to bid all or a portion of the judgment,
while the outsider typically must tie up cash money – without, apparently, the right to compensation
for being deprived of the use of that money if the plaintiff then declines to seek confirmation. Finally,
outsiders’ ability to arrange financing for such bids certainly will be hindered by the Court’s
characterization of successful bidders’ rights as simply “speculative.”

Fourth, Lewis does not address a party’s ability to attack a sale by attacking some other
aspect of the foreclosure proceeding. A foreclosure sale being based on the foreclosure judg-
ment, if that judgment was void, e.g., for lack of proper service on a necessary party, the sale will fall
with the vacating of the judgment. See Mortgage Elec. Systems v. Gipson, 379 Ill. App. 3d 622, 884
N.E.2d 796 (2008); Bank of N.Y. v. Unknown Heirs, 369 Ill. App. 3d 472, 860 N.E.2d 1113 (2006).
Moreover, JP Morgan Chase Bank v. Fankhauser, 2008 WL 2313319, No. 2-07-0140 (Ill. App. 2d
Dist. slip op. June 4, 2008), holds that the judgment of foreclosure is not a final judgment – even if the
Court says there is no just reason to delay enforcement or appeal – until the sale is confirmed.
Hence, under Fankhauser, a party can seek reconsideration of the foreclosure judgment under the
relatively liberal standards of 735 ILCS 5/2-1301(e) up until 30 days after the sale is confirmed.

Fifth, in light of those factors, look for calls for the statute to be amended. IMFL was adopted
some 20 years ago with promises that it would make mortgage foreclosure sales more commercially
reasonable and productive. Its success in meeting those goals has been modest, and likely will be
diminished even further in light of the recent rulings.

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