Page 7 - John Hundley 2017

Mortgage Law Roundup

Sharp Thinking

No. 143 Perspectives on Developments in the Law from Sharp-Hundley, P.C. March 2017

Dina Overturned On Mortgagee Registration Issue

First Mortgage Co. v. Dina, 2014 IL App (2d) 130567, holding that the issuance of a home
mortgage by an entity that is not registered under the Residential Mortgage License Act (205 ILCS
635) voids the mortgage (see generally Sharp Thinking No. 116 (June 2014)), has been overturned.
So hold two cases from the Appellate Court last month: Wells Fargo Bank, N.A. v. Maka, 2017 IL
App (1st) 153010; and Nationstar Mortgage LLC v. Missirlian, 2017 IL App (1st) 152730. Moreover,
according to Maka, Dina was never correctly decided.
Both courts relied upon a legislative amendment, Pub. Act 99-113, which (a) amended the
licensing act to provide that a loan brokered, funded, originated, serviced or purchased by an
unlicensed party “shall not be held to be invalid solely on the basis of a violation” of the act, and (b)
declared that amendment “declarative of existing law.” Lower courts reaching similar results have
included McNeal v. J.P. Morgan Chase Bank, N.A., 2016 WL 6804585 (N.D. Ill. 2016), and In re
Jordan, 543 B.R. 878 (Bankr. C.D. Ill. 2016).
In addition, Maka studied the Supreme Court case upon which Dina principally relied, and found
that Dina had incorrectly applied that precedent to the act. Accordingly, in Maka’s view, Dina was
never correctly decided.
MERS Doesn’t Violate Licensing Act

Mortgage Electronic Registration Systems, Inc. (MERS) does not violate the Residential
Mortgage License Act (205 ILCS 635) merely by being named as mortgagee and lender’s nominee in
a mortgage when the actual lender is registered under that act, a panel of the Appellate Court in
Chicago has held.
Reviewing the statutory language defining conduct which is prohibited by that act without
registration thereunder, the court said MERS did not commit that conduct and the registered lender
did. U.S. Bank N.A. v. Hartman, 2016 IL App (1st) 151556.

The court thus avoided deciding whether Pub. Act 99-113 was applicable to the case. As
discussed above, that act declares as “existing law” language which overrules First Mortgage Co. v.
Dina, 2014 IL App (2d) 130567, which held mortgages issued by unlicensed mortgagees void as
against public policy.

Reinstatement of LLC Status Doesn’t Cure Mortgage Default

Where a foreclosure has been filed because the debtor limited liability company (LLC) has
allowed its continued existence to lapse, the LLC cannot thereafter defeat summary judgment by
simply having its existence reinstated, a panel in the Appellate Court’s Fourth District has ruled.

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Sharp Thinking is an occasional newsletter of Sharp-Hundley, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp Thinking
shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein constitute
educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal advice on
your particular situation, contact a Sharp-Hundley lawyer at 618-242-0200 or one of the addresses provided on page 2 of this newsletter.