Sunday, March 10, 2019

Recent Court Case Addresses Role of Third-Party Buyers in Foreclosure Sales

If an Oak Park resident’s home goes into foreclosure, there are a number of steps that exist before the property goes through the process for a judicial foreclosure and the home is sold. Since Illinois is a judicial foreclosure state, all foreclosures go through the court system. However, in some cases, the homeowner is continuously taking action to attempt to retain possession of the home and to stop the foreclosure. What happens when a judgment of foreclosure is entered and the house is sold to a third party, but the homeowner appeals the judgment in an attempt to keep the property?

That is the basis for a recent case that went before the First Appellate District of Illinois, Deutsche Bank National Trust Co. v. Roman (2019). According to a recent article in about the case, the court had to determine whether a third-party buyer is a party to the foreclosure case, and whether an appeal can reverse a foreclosure judgment and sale. The court ruling could have implications for other foreclosure judgments and sales in the Oak Park area.

Getting the Facts About the Case

As the court explained in the background of the case, the matter had “a long litigation history.” We want to provide some basic facts about the background to make clear how the court reached its conclusion. In short, the defendants, Cesar and Irene Romans, owned a residential property in Chicago that went into foreclosure. The bank initiated the foreclosure process, and after approximately a year and a half, the court entered a judgment of foreclosure and sale.

The Romans appealed, and the case went through a lengthy litigation process. More than four years after the court entered the judgment of foreclosure and sale, a judicial sale of the property was scheduled. The Romans attempted to stop the judicial sale, arguing that they never received a grace period notice and that they never received a proper notice of default. The lower court agreed to an emergency motion to stay the sale of the property, but the court ultimately found against the Romans and permitted the sale to move forward a couple of months later. The buyer of the property was a third-party buyer unconnected to the foreclosure case. The Romans continued to appeal the judicial sale.

The plaintiff argues that the Romans’ appeal is moot because the property already had been conveyed to a third party under Illinois Supreme Court Rule 305(k).

Does a Third Party’s Acquisition of Property Render an Appeal Moot?

In the present case, the court had to determine whether a third party’s acquisition of the property in question rendered the appeal moot under Rule 305(k), and thus whether the third party was a “party to the foreclosure proceedings,” according to the article.

The court ultimately concluded that a third party buyer in a judicial foreclosure sale is not a party to the lawsuit, and that public policy behind Rule 305(k) is to prevent a third party from “losing [a] property due to facts unknown to him at the time of the sale.” Accordingly, the court clarified that, in a foreclosure case where the third party buyer has no other stake in the foreclosure proceedings than as a purchaser, an appeal from the former homeowners who went through the foreclosure process is moot under Rule 305(k).

Contact an Oak Park Foreclosure Defense Lawyer

An Oak Park foreclosure defense lawyer may be able to help you to stop a foreclosure at various points in the process. Contact the Emerson Law Firm today to learn more about your options.

See Related Blog Posts:

How the Government Shutdown has Affected Foreclosures
Reading the FDCPA: Are Foreclosure Actors Debt Collectors Under the Law?

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