U.S. Bank Trust National Association v. Hernandez
88 N.E.3d 1056
Ill. App. Ct.2017Background
- U.S. Bank Trust (plaintiff) filed to foreclose a HUD-insured mortgage on Jan 2, 2014; complaint attached copies of the mortgage and the promissory note dated June 9, 2008, the note bearing a blank indorsement.
- Defendants Jose and Maria Hernandez pleaded affirmative defenses that plaintiff lacked standing and failed to comply with 24 C.F.R. § 203.604 (HUD requirement to attempt a face-to-face meeting before foreclosure).
- Plaintiff submitted affidavits from a Roundpoint foreclosure supervisor asserting Roundpoint serviced the loan (service rights acquired 9/16/13) and that agents visited the property in April 2012; it produced a FedEx shipping label and an April 2012 letter offering a visit.
- Recorded assignments: Aug 15, 2013 assignment from Bank of America to HUD (referencing the note); Jan 16, 2014 assignment from HUD to plaintiff (did not reference the debt). The Aug 2013 assignment was recorded Jan 23, 2014, after the foreclosure complaint was filed.
- Trial court granted summary judgment and confirmed sale; defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose (ownership of the note) | Possession of the note indorsed in blank creates prima facie proof of ownership and authority to foreclose | The Aug 2013 assignment to HUD (recorded after complaint) raises a factual dispute that HUD, not plaintiff, owned the debt when suit was filed | Plaintiff had standing as a matter of law; defendants failed to rebut the prima facie showing based on the blank indorsement and attached note copy |
| Compliance with 24 C.F.R. § 203.604(d) (attempt-by-letter) | The FedEx label and April 2012 letter show an attempt to arrange a face-to-face meeting (and substantial compliance) | The regulation mandates a certified-mail dispatch via U.S. Postal Service; a FedEx label is not proof of dispatch or certified-mail compliance | Material factual issue exists whether plaintiff dispatched the required letter; summary judgment improper on this issue; remand required |
Key Cases Cited
- Adams v. Northern Illinois Gas Co., 211 Ill. 2d 32 (2004) (summary-judgment standard and construction of pleadings/affidavits)
- Raintree Homes, Inc. v. Village of Long Grove, 209 Ill. 2d 248 (2004) (standing doctrine overview)
- Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d 217 (2010) (lack of standing is an affirmative defense)
- First Federal Savings & Loan Ass'n of Chicago v. Chicago Title & Trust Co., 155 Ill. App. 3d 664 (1987) (copy of note attached to complaint is prima facie evidence of ownership)
- Federal National Mortgage Ass'n v. Kuipers, 314 Ill. App. 3d 631 (2000) (transfer of note as assignment of mortgage)
- Lehman v. Stephens, 148 Ill. App. 3d 538 (1986) (prima facie proof suffices absent contrary evidence)