U.S. Bank Trust National Association v. Hernandez
2017 IL App (2d) 160850
| Ill. App. Ct. | 2017Background
- U.S. Bank Trust filed a mortgage foreclosure complaint Jan 2, 2014, attaching a copy of the June 9, 2008 note, which bore a blank indorsement by Countrywide (undated).
- Defendants raised affirmative defenses: lack of standing (challenging chain/ownership) and failure to comply with HUD regulation 24 C.F.R. § 203.604 (face-to-face meeting attempt) before foreclosure.
- Plaintiff submitted affidavits from a servicer supervisor (Roundpoint) stating Roundpoint was servicing the loan (acquired servicing rights 9/16/13) and that agents visited the property in April 2012; plaintiff produced a FedEx-generated shipping label for an April 2012 letter offering a meeting.
- Documentary record also included an Aug 15, 2013 assignment from Bank of America to HUD (recorded Jan 23, 2014) and a Jan 16, 2014 assignment from HUD to plaintiff; defendants argued the Aug 2013 assignment raised a standing question for Jan 2, 2014.
- Trial court granted summary judgment and confirmed sale; appellate court considered (1) whether plaintiff had standing to foreclose and (2) whether plaintiff complied with 24 C.F.R. § 203.604(d) (letter + property visit requirement).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose (ownership of note/mortgage on filing date) | Possession of the note indorsed in blank is prima facie proof of ownership and authority to foreclose. | Aug 15, 2013 assignment to HUD (recorded Jan 23, 2014) suggests HUD owned the mortgage when suit was filed; Jan 16, 2014 assignment to plaintiff is too late or inconsequential. | Plaintiff had standing as a matter of law; blank indorsement and attached copy of the note created a prima facie case and defendants failed to rebut it. |
| Compliance with 24 C.F.R. § 203.604(d) — letter requirement | The FedEx label and tracking number prove the letter offering a face-to-face meeting was dispatched; Rourk suggests private carrier may substantially comply. | Section 203.604(d) requires a certified USPS letter; FedEx label is not conclusive dispatch proof and no proof of delivery was produced. | Material fact remains whether the letter was dispatched; summary judgment improper on this issue and remand required. |
| Compliance with 24 C.F.R. § 203.604(d) — property visit requirement | Servicer affidavit states agents visited the property in April 2012. | Defendants contend no visit occurred. | Defendants forfeited this contention for lack of record citation; court accepted servicer affidavit on summary-judgment record. |
| Prejudice / futility excuse for noncompliance | Even if letter not sent, defendants’ long delinquency would make face-to-face meeting futile; no prejudice shown. | Failure to comply is a defense; prejudice/futility not established. | Court declined to apply a no-prejudice/futility rule to excuse § 203.604 noncompliance absent clearer federal guidance; refused to excuse noncompliance. |
Key Cases Cited
- Adams v. Northern Illinois Gas Co., 211 Ill.2d 32 (Ill. 2004) (summary judgment standard; construing evidence against movant)
- Raintree Homes, Inc. v. Village of Long Grove, 209 Ill.2d 248 (Ill. 2004) (standing doctrine overview)
- Lebron v. Gottlieb Memorial Hospital, 237 Ill.2d 217 (Ill. 2010) (affirmative defense burden)
- First Federal Savings & Loan Ass’n of Chicago v. Chicago Title & Trust Co., 155 Ill. App.3d 664 (Ill. App. 1987) (copy of note attached to complaint is prima facie evidence of ownership)
- Lipscomb v. Sisters of St. Francis Health Services, Inc., 343 Ill. App.3d 1036 (Ill. App. 2003) (prima facie proof suffices absent contrary evidence)
- Federal National Mortgage Ass’n v. Kuipers, 314 Ill. App.3d 631 (Ill. App. 2000) (transfer of note effects assignment of mortgage)