Appeal from the Circuit Court of Du Page County. No. 92--L--1769 Honorable Paul Noland, Judge, Presiding.
The opinion of the court was delivered by: Justice Inglis
IN THE COURT OF APPEALS OF THE STATE OF ILLINOIS
Following a bench trial in which plaintiff, Graceia M. Voyles, was awarded damages totaling $10,000, plaintiff appeals the judgment of the circuit court of Du Page County. Defendant, Fleet Mortgage Corporation, cross-appeals.
The following information was adduced at trial. In 1976, plaintiff purchased a single-family residence in Springfield, Illinois, and financed the purchase with a mortgage from Citizen's Savings & Loan. In 1979, plaintiff moved to the Chicago area and found employment. Plaintiff still owned the Springfield home and rented it to a tenant. In 1981, plaintiff purchased a home in Northbrook, Illinois, financed with a mortgage from Citibank FSB (Citibank).
In 1987, plaintiff sold her Northbrook home and purchased a home in Naperville, again financed with a Citibank mortgage. Plaintiff's mother became seriously ill in 1987 and moved in with plaintiff in her Naperville home. Plaintiff's mother died later that year. Plaintiff's son also died in September 1987, and plaintiff initiated guardianship proceedings to obtain custody of her granddaughter. In 1989, plaintiff was granted permanent guardianship over her granddaughter and brought her to live with plaintiff in her Naperville home.
As a result of plaintiff's personal problems from 1987 to 1989, she made arrangements with her Springfield tenant (her attorney at trial and on appeal) to assume the responsibility of making all payments related to the Springfield property. Thus, the tenant made the monthly mortgage payments to Citizen's Savings & Loan. Citizen's Savings & Loan questioned plaintiff as to why the mortgage and insurance payments for the Springfield property were not made in her name. Following plaintiff's explanation, Citizen's Savings & Loan issued a passbook to the tenant, who used it to make all payments to Citizen's Savings & Loan during the next five years.
In 1991, Citizen's Savings & Loan was taken over by the Resolution Trust Corporation, which assigned plaintiff's loan to defendant. Plaintiff's Springfield tenant then sent the mortgage payments directly to defendant.
In September 1991, defendant began rejecting the mortgage payments. Defendant apparently believed that the tenant had obtained ownership of the Springfield property in violation of the mortgage. Plaintiff's tenant continued to tender the mortgage payments to defendant, and defendant continued to refuse to accept them. According to defendant, it had reviewed the escrow account and found that the monthly escrow payments were insufficient to cover the annual property tax. According to defendant, therefore, it increased the monthly mortgage payment to reflect the increase in the amount of the monthly escrow payment. The trial court found, however, that defendant never actually notified plaintiff that it was increasing the monthly mortgage payments. According to defendant, as a result of the shortfall in plaintiff's tenders, defendant rejected the payments. In October 1991, defendant reported to the credit reporting agencies of TransUnion and TRW that plaintiff was delinquent in her mortgage payments.
Plaintiff's tenant continued to tender mortgage payments to defendant, all of which defendant rejected. In January 1992, plaintiff agreed that defendant was correct in demanding a higher amount and attempted to pay off the mortgage arrears by tendering the full amount due and owing. Defendant rejected this tender because one of the checks comprising the tender was drawn on the Springfield tenant's personal account, and the other check, an insurance payment for repairs on the Springfield property, was made out to both the tenant and Citizen's Savings & Loan. Plaintiff again attempted to pay the arrearage but mistakenly omitted the amount of the Springfield tenant's personal check. In addition, another month's rent was due, so defendant again rejected plaintiff's attempt to cure her delinquency.
In February 1992, defendant initiated foreclosure proceedings and reported this to TransUnion and TRW. In March 1992, plaintiff attempted to refinance her mortgage with Citibank to take advantage of lower interest rates. Plaintiff wished to add her car payments to her mortgage and thus improve her cash flow and receive tax benefits.
After receiving her refinancing application, Citibank performed a credit check, which revealed plaintiff's delinquency in making her mortgage payments and the pending foreclosure action reported by defendant. Citibank notified plaintiff about her credit situation and informed her that the foreclosure would prevent her from getting the loan. Citibank also apparently determined that plaintiff's application was incomplete and informed plaintiff by letter dated April 2, 1992.
On April 9, 1992, defendant advised plaintiff for the first time about its concern that the due-on-sale clause of the mortgage on the Springfield property was violated. Plaintiff then advised defendant that the foreclosure proceeding was preventing plaintiff from obtaining the loan from Citibank. On June 10, 1992, defendant informed Citibank that it should disregard the foreclosure and delinquencies it had reported. James Duran, defendant's vice-president, wrote to Deborah Mabeley, who was processing plaintiff's loan application for Citibank, that defendant had a dispute with plaintiff's lawyer, Wayne Golomb. Duran wrote that defendant was challenging the lawyer's power of attorney over the Springfield mortgage, had accelerated the debt, and was returning payments tendered by Golomb on plaintiff's behalf. Duran conceded that plaintiff's credit history should not have been harmed by defendant's dispute with Golomb and that it was issuing corrections for any reported delinquencies. Citibank received defendant's letter on June 16, 1992. Plaintiff, however, was unexpectedly terminated from her job on June 12, 1992.
After receiving defendant's June 10 letter, Citibank completed processing plaintiff's loan application. Citibank refused to refinance plaintiff's loan on July 13, 1992, as a result of plaintiff's unemployment, ...