Illinois Appellate Court affirms ruling that loss mitigation affidavit satisfied court rule even though it was executed over a year before the judgment of foreclosure

In Wells Fargo Bank, N.A. v. Smith, No. 1-17-2963 (March 4, 2019) an Illinois Appellate Court affirmed the trial court’s finding that a mortgagee’s loss mitigation affidavit satisfied Illinois Supreme Court Rule 114 even though it was executed more than a year prior to moving for judgment of foreclosure. The court also held that the trial court had discretion to grant the mortgagee’s motion for judgment of foreclosure even if the affidavit failed to satisfy Rule 114.

The mortgagee filed a motion for summary judgment and judgment of foreclosure on September 30, 2015. The mortgagee attached a loss mitigation affidavit sworn to on September 3, 2015, specifying a loss mitigation program applicable to the mortgage, the steps taken to offer the loss mitigation program to the borrower, and the status of those mitigation efforts as required by Illinois Supreme Court Rule 114. The trial court denied summary judgment but over a year later the mortgagee filed a new motion for summary judgment and judgment of foreclosure and attached the same September 3, 2015 loss mitigation affidavit. The trial court granted summary judgment and entered the judgment of foreclosure.

The mortgagor appealed arguing that the mortgagee failed to comply with Rule 114 because the loss mitigation affidavit was sworn to over one year before the motions for summary judgment and judgment of foreclosure and sale were filed. Therefore, the affidavit did not indicate the current status of mitigation efforts of the mortgagee at the time it moved for judgment more than a year later.

Rule 114(a) provides that “[f]or all actions filed under the Illinois Mortgage Foreclosure Law, and where a mortgagor has appeared or filed an answer or other responsive pleading, Plaintiff must, prior to moving for a judgment of foreclosure, comply with the requirements of any loss mitigation program which applies to the subject mortgage loan.” Rule 114(b) provides that, in order to comply with subsection (a), “Plaintiff, prior to or at the time of moving for a judgment of foreclosure, must file an affidavit specifying: (1) [a]ny type of loss mitigation which applies to the subject mortgage; (2) [w]hat steps were taken to offer said type of loss mitigation to the mortgagor(s); and (3) [t]he status of any such loss mitigation efforts.”

Applying the plain language of Rule 114, the court concluded that the mortgagee complied with the requirements of the rule by undertaking loss mitigation program prior to moving for judgment and filing an affidavit to that effect at the time it moved for judgment. The loss mitigation affidavit, it found, complied in both the substance and the form required by Rule 114. There was nothing in the rule that mandated the affidavit had to be current as of a certain date. The rule only required it be filed “prior to or at the time of moving for a judgment”.

The court further noted that Rule 114(d) provides that “[t]he court may, either sua sponte or upon motion of a mortgagor, stay the proceedings or deny entry of a foreclosure judgment if Plaintiff fails to comply with the requirements of this rule.” Because subsection (d) uses the word “may”, rather than “shall,” Rule 114 is not mandatory and leaves “some room for judicial discretion regarding the level of strictness of its enforcement.” Accordingly, even if the mortgagee failed to comply with Rule 114, the trial court had discretion to still grant its motion for judgment of foreclosure.

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