JUDGMENT FOR BANK EXPUNGING ERRONEOUS – KEY POINTS

1. Illinois’ First District Appellate Court affirmed a summary judgment of foreclosure in favor of Wilmington Savings Bank (“Wilmington”) despite a previously recorded release of Herzog’s $1.5 million mortgage which the Court found to have been invalid for want of consideration and created by Wilmington’s predecessor in error. Wilmington Savings Fund Society, FSB, etc. v. Herzog, 2023 IL App (1st) 221467-U.

2. The lower court granted summary judgment and entered a judgment of foreclosure and the property was sold for a million dollars leaving a deficiency in excess of $1.5 million (due to a modification of the original mortgage amount) for which the court entered a deficiency judgment. Herzog appealed both the foreclosure judgment and the deficiency judgment claiming the foreclosure was barred because of a release the bank recorded (erroneously) and the sale was invalid based on the insufficiency of the winning bid. The appellate court disagreed on both points.

3. The Court rejected Herzog’s argument that the $1,088,000 sale price was “unconscionably low” concluding that Herzog failed to present any credible evidence of the fair market value of the property and failed to demonstrate the sale process was flawed in any way. The Court also explained that the bank presented clear evidence that the $1.5 million release was erroneously executed, and that Herzog never paid any consideration in exchange for the release of his mortgage. The Court affirmed both judgments and remanded the matter with directions to the lower court to enter a declaratory judgment to expunge the release from the official record.

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