Appeal from the Circuit Court of Cook County Honorable Jessie G. Reyes, Judge Presiding. No. 08 CH 3725
The opinion of the court was delivered by: Justice Lampkin
JUSTICE LAMPKIN delivered the opinion of the court: In this mortgage foreclosure action, defendant Jessie Barnes appeals the circuit court's denial of her petition to vacate the foreclosure judgment and sale and to deny the confirmation of the sale. Defendant argues that plaintiff Mortgage Electronic Registration Systems, Inc. (MERS), did not have standing to prosecute this foreclosure action and, thus, the circuit court orders rendered in favor of MERS were void. For the reasons that follow, we affirm the judgment of the circuit court.
In January 2008, plaintiff MERS filed a complaint to foreclose a mortgage against defendant Barnes, pursuant to sections 15-1504(a)(1) through (a)(3) of the Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS 5/15-1504(a)(1) through (a)(3) (West 2008)). MERS alleged, inter alia, that it was the mortgagee, defendant was in default of her residential mortgage loan for $278,113.44 in unpaid principle, and MERS brought the suit as the legal holder of the indebtedness. MERS attached to its complaint a copy of the mortgage and the note. The mortgage defined defendant as the borrower, First NLC Financial Services, L.L.C., as the lender, and MERS as the nominee of the lender and the lender's successors and assigns. The definitions section of the mortgage also stated that "MERS is the mortgagee under this Security Instrument." Further, page three of the mortgage provided, in pertinent part:
"Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell a Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument." (Emphasis added.)
The note secured by the mortgage provided that the lender could transfer the note, and anyone who took the note by transfer and was entitled to receive payments under the note was "called the Note Holder."
MERS's complaint was served on defendant on January 31, 2008, but she did not file an answer, so default orders and a judgment of foreclosure were entered in May 2008. In August 2008, defendant filed an appearance, and the trial court granted her emergency motion to stay the foreclosure sale until September 29, 2008. On September 30, 2008, MERS offered the highest and best bid of $221,000, and the property was sold to MERS.
In May 2009, MERS moved the circuit court for an order approving the report of sale and distribution. Defendant, however, filed a petition to vacate the foreclosure judgment and sale and to deny the confirmation of the sale, pursuant to section 2-1401(f) of the Code of Civil Procedure (Code) (735 ILCS 5/2-1401(f) (West 2008)) and section 15-1508(b)(iv) of the Foreclosure Law (735 ILCS 5/15-1508(b)(iv) (West 2008)). Specifically, defendant argued that the judgment of foreclosure and sale was void because MERS had no interest in the debt secured by the mortgage on the property. According to defendant, MERS was merely a for-profit electronic registration and tracking system that some owners and holders of notes utilized to avoid paper transfers of the ownership of notes and mortgages. Defendant asserted that MERS was not the true owner or holder of the note and mortgage and, instead, just acted "as a library or holder of information regarding the true owners and holders of notes and mortgages." Defendant also argued that MERS failed to attach any document to its complaint to show that the promissory note had been assigned to MERS for value.
In July 2009, the circuit court denied defendant's petition to vacate the foreclosure judgment and to deny confirmation of the sale, noting that it was a final and appealable order. The circuit court also granted MERS's motion for an order approving the sale but stayed execution of the order until August 20, 2009. Thereafter, defendant moved the circuit court to stay enforcement of its July 2009 orders pending disposition of her appeal. The circuit court, however, denied defendant's motion to stay, noting that no notice of appeal had been filed yet.
On September 16, 2009, this court allowed defendant's motion to file a late notice of appeal. This court also granted defendant a stay of enforcement of the July possession order until further order of this court.
Section 15-1508(b) of the Foreclosure Law confers broad discretion on circuit courts in approving or disapproving judicial sales, and that exercise of discretion will not be disturbed absent an abuse of discretion. Household Bank, FSB v. Lewis, 229 Ill. 2d 173, 178 (2008). Defendant, however, argues that her appeal is brought from the circuit court's denial of her petition under section 2-1401 of the Code challenging standing, an issue of law, and therefore the standard of review on appeal is de novo.
Defendant misstates the procedural posture of this case. Section 2-1401 of the Code, which provides relief from final orders and judgments after 30 days from entry thereof, is not applicable here. When defendant filed her May 2009 section 2-1401 petition, the May 2008 foreclosure judgment was not final and appealable yet because the circuit court did not expressly find that there was no just reason for delaying appeal and MERS's motion to confirm the sale was pending before the circuit court. See In re Marriage of Verdung, 126 Ill. 2d 542, 555 (1989) (unless the court includes Supreme Court Rule 304(a) (now see 210 Ill. 2d R. ...