Mortgage Electronic Registration Systems, Inc. v. Barnes
406 Ill. App. 3d 1
| Ill. App. Ct. | 2010Background
- MERS filed a mortgage foreclosure suit against Jessie Barnes in January 2008 under Illinois Mortgage Foreclosure Law, alleging it was the mortgagee and legal holder of the indebtedness.
- The note and mortgage were attached, with MERS described as nominee for the lender and its successors and assigns, and the mortgage stating MERS may foreclose and take actions required of the lender.
- Barnes defaulted; default orders and foreclosure judgment entered May 2008; MERS later purchased the property at foreclosure sale on September 30, 2008.
- Barnes appeared in August 2008 and sought to stay the sale until September 29, 2008; sale occurred with MERS as purchaser.
- In May 2009 Barnes petitioned under 2-1401 and Foreclosure Law 15-1508(b)(iv) to vacate the judgment and deny confirmation, arguing MERS lacked standing and was not the true holder of the note.
- The circuit court denied the petition, approved the sale, and Barnes appealed; this court stayed enforcement pending appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MERS had standing to foreclose | MERS was the mortgagee/holder and nominee authorized to foreclose | MERS lacked ownership/assignment; not the real party in interest | Yes; MERS had standing under 15-1504(a)(3)(N) and the mortgage terms |
| Whether the 2-1401 petition could circumvent 15-1508(b) sale confirmation | 15-1508(b) governs sale confirmation and limits relief | 2-1401 petition can be used to challenge judgments | No; 2-1401/E relief not applicable when 15-1508(b) governs |
| Whether Barnes forfeited the standing issue by default | N/A (MERS had standing) | Default could be used to challenge standing | Barnes forfeited standing by default; record supports MERS standing |
| Whether the judgment was void for lack of subject matter jurisdiction | MERS had valid standing and authority to foreclose | No proper party in interest or improper pleadings | Not void; MERS satisfied mortgagee definition and 15-1208; jurisdiction proper |
| Whether the trial court abused its discretion in confirming the sale | Sale terms and notice complied; court could confirm | Standing issue undermines sale validity | No abuse; sale affirmed under 15-1508(b) |
Key Cases Cited
- Glisson v. City of Marion, 188 Ill.2d 211 (1999) (standing requires injury in fact and party with real interest)
- Greer v. Illinois Housing Development Authority, 122 Ill.2d 462 (1988) (standing defense waiver if not timely raised)
- Lebron v. Gottlieb Memorial Hospital, 237 Ill.2d 217 (2010) (burden to plead/prove lack of standing; forfeiture if not timely raised)
- In re Marriage of Verdung, 126 Ill.2d 542 (1989) (mortgage foreclosure finality and Rule 304(a) sequencing)
- Kazunas v. Wright, 286 Ill.App.4th (1936) (standing where beneficial ownership differs; can sue by holder)
- Stalzer v. Blue, 312 Ill.App. 563 (1942) (foreclosure may be maintained by legal holder regardless of ownership)
- Replogle v. Scott, 299 Ill.App. 270 (1939) (foreclosure by statute-defined holders)
- Bourke v. Hefter, 202 Ill. 321 (1903) (early recognition of holder's rights to foreclose)
- Plaza Bank v. Kappel, 334 Ill.App.3d 847 (2002) (Foreclosure procedure; 15-1504 form sufficiency)