Nationwide Advantage Mortg. Co. v Ortiz (IL)

Summary:  When a defendant fails to argue lack of standing before a foreclosure judgment is entered, that argument is forfeited and the defendant is barred from litigating the issue later.

Nationwide Advantage Mortg. Co. v Ortiz, 2012 IL App (1st) 112755 (1st Dist. 2012).

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Nationwide Advantage Mortgage Company (“Nationwide”) brought a foreclosure action on October 14, 2009, against the mortgagor, Miguel Ortiz. In March 2009, the court granted Nationwide a judgment for foreclosure and sale. The note secured by the mortgage provided that the lender could transfer the note, and transferee, Nationwide, was entitled to receive payments. Nationwide motioned for summary judgment and judgment of foreclosure and sale. The court gave the defendant a deadline to respond, which the defendant failed to meet and the court granted the summary judgment. A judicial sale was scheduled for May 12, 2010; the defendant thereafter obtained counsel and on June 6, 2010, filed an appearance and motion to stay the sale until July 12, 2010. On July 12, the plaintiff purchased the property at the judicial sale, and moved to confirm the sale on August 17, 2010.

The defendant, Ortiz, obtained new counsel and subsequently filed motions to withdraw his answer and to dismiss the complaint, arguing that Nationwide lacked standing because the mortgage note was assigned to Nationwide after it brought the foreclosure action. The foreclosure action was commenced on October 14, 2009, but the assignment was not executed until November 4, 2009. The trial court found the assignment to violate the rule that “any and all assignments or other documents demonstrating the movant’s standing to foreclose” must be submitted to the court prior to the consideration of entry of an order for judgment, therefore dismissing the complaint, requiring Nationwide to refile the complaint.

During the thirty days between the dismissal and the deadline for the plaintiff’s refiling, the appellate court decided Mortgage Electronic Registration Systems, Inc. v Barnes, 406 Ill App 3d 1 (2010), which held that a defendant mortgagor could not raise standing as an affirmative defense after the entry of a foreclosure order. Citing Barnes, Nationwide motioned to reconsider leading the trial court to reverse its decisions and vacate the dismissal. After denying Ortiz’s motion to reconsider, the court confirmed the sale of the property to Nationwide on August 17, 2011. Ortiz filed a timely appeal arguing the following issues: (1) the court order confirming the sale; and, (2) the trial court’s order denying defendant’s motion to reconsider.


Affirmed. The appellate court found for Nationwide on both issues appealed after a de novo review. A de novo review, is proper both for a dismissal and a when a motion to reconsider raises a question whether the trial court erred in its prior application of existing law. For the first issue, the appellate court, citing Barnes, held that when a defendant fails to argue lack of standing before a foreclosure judgment, that argument is forfeited and the defendant is barred from litigating the issue later. Similar to Barnes which is now the controlling case, Ortiz did not raise the standing issue until after the foreclosure judgment, therefore he forfeited that defense.

Second, the defendant argued that the confirmation of the sale was improper because the full debt bid offered by the plaintiff was unconscionable. The appellate court affirmed the trial court’s denial of Ortiz’s motion to reconsider stating the firmly established rule that unless there is evidence of mistake, fraud, or violation of duty by the officer conducting the sale, mere inadequacy of price alone is not sufficient cause for setting aside a judicial sale. Where there is no fraud or irregularity in the foreclosure proceeding, as was the case here, the price at which the property is sold is the conclusive measure of its value.

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By: ATG Underwriting Department | Posted on: Thu, 12/06/2012 - 10:57am