A recent opinion by an Illinois Appellate court removes a major defense to a mortgagee or servicer’s attempt to upset a tax sale when they did not receive notice. In Re Application of the County Treasurer, No. 1-10-1966. (Ill. App. Ct. Aug. 25, 2011) largely undermines a tax deed purchaser’s argument that if a mortgagee’s interest is not recorded it is not entitled to notice. The case goes so far to say that if in the course of its due diligence the tax deed petitioner discovers the name of the servicer it must provide notice to it as well. In this case, the tax certificate holder failed to act with diligence to serve the notice of tax sale and the expiration date for redemption on the current holder of the note, which was the assignee of the lender named in recorded mortgage, and on the non-record mortgage servicer. The court found that the mortgage documents identifying the lender stated that MERS, as mortgagee, was acting as nominee not only for the lender but also for lender’s successors and assigns. Despite this the petitioner did not use the telephone number or address listed for MERS to attempt to discover the names of entities holding interests in the real property, including the current holder of the note and the mortgage servicer. The court also found that where the servicer’s identity has been discovered by the tax sale purchaser when making its diligent inquiry to determine the individuals holding an interest in the real property, the servicer will be entitled to the statutory notices, even though its interest is not of record. Although the court agreed with the trial court’s finding that the best way to receive notice is to record the document from which one’s interest was obtained, the petitioner must make a diligent inquiry and effort to also notify parties whose interest may reasonably be inferred from the public record.
Author
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Solomon has nearly two decades of experience representing financial institutions, real estate investors and privately owned business entities. Solomon concentrates his practice in the areas of banking, consumer financial services, real estate, business law and related litigation and appellate practice.
