Wells Fargo Bank, N.A. v. Maka
72 N.E.3d 765
Ill. App. Ct.2017Background
- Jan Maka borrowed $274,000 in 2002; mortgage was originally with Alliance Mortgage Co. (nominee MERS) and later negotiated to Wells Fargo.
- Wells Fargo sued to foreclose in May 2013; summary judgment and judgment of foreclosure entered Feb 18, 2015.
- Maka moved under 735 ILCS 5/2-1301(e) to vacate the foreclosure, arguing the mortgage was void because Alliance lacked a Residential Mortgage License when the loan originated, relying on Dina (2d Dist.).
- The trial court treated the filing as a motion to reconsider and denied relief (June and Sept. 2015); property sold and sale confirmed.
- While this case was pending, the General Assembly amended section 1-3(e) of the License Act by Public Act 99-113 (effective July 23, 2015) clarifying that violation of the License Act does not by itself invalidate a mortgage and stating the amendment is declarative of existing law.
- Maka also argued the amendment could not be applied retroactively because of due process/vested rights, but he did not raise that constitutional challenge below and thus forfeited it on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a mortgage is void if the originating lender was not licensed under the Residential Mortgage License Act | The License Act does not render mortgages void for licensing violations; remedies lie with the Department and statute (as amended) clarifies this | Mortgage should be void under Dina because unlicensed originator violates the License Act and such contracts are unenforceable | The court held the License Act does not invalidate mortgages for licensing violations; Dina is not controlling and Public Act 99-113 clarified that mortgages remain enforceable |
| Whether the 2015 amendment to section 1-3(e) applies to cases pending when it took effect | The amendment is a declarative clarification of existing law and applies to pending matters to resolve ambiguity | The amendment cannot be applied retroactively to divest vested property rights (due process) | The court applied the amendment as clarification of existing law and rejected the retroactivity argument as forfeited because it was not raised below |
| Whether Dina controls outcome in this case | Plaintiff: Dina misread License Act and is not binding here | Defendant: Dina requires that unlicensed-lender mortgages be voided | The court found Dina unpersuasive and concluded the Act, read as a whole and as clarified by the legislature, does not make mortgages void |
| Whether appellate court should consider defendant’s constitutional due-process claim | Plaintiff: Claim forfeited because not raised below | Defendant: (raised on appeal) amendment deprives property without due process | The court refused to reach the constitutional claim due to forfeiture on the record |
Key Cases Cited
- Chatham Foot Specialists, P.C. v. Health Care Serv. Corp., 216 Ill. 2d 366 (2005) (licenses and enforceability of contracts; legislative purpose matters in determining whether a licensing statute voids contracts)
- K. Miller Constr. Co. v. McGinnis, 238 Ill. 2d 284 (2010) (use of subsequent statutory amendment to discern legislative intent; factors indicating clarification vs. change)
- 1010 Lake Shore Ass’n v. Deutsche Bank Nat’l Trust Co., 2015 IL 118372 (2015) (issues not raised in trial court are forfeited on appeal)
- People v. White, 2011 IL 109689 (2011) (appellate restraint; do not consider constitutional issues first raised on appeal)