KEY POINTS | ILLINOIS APPELLATE COURT FINDS BANK HAD STANDING AS NOTE HOLDER & AFFIRMS FORECLOSURE JUDGMENT

1. Earlier this month the First District Appellate Court of Illinois affirmed Fifth Third Bank’s foreclosure judgment rejecting the borrowers’ (the Rumbolts) argument that Freddie Mac was the owner of their loan so Fifth Third lacked standing to foreclose. Fifth Third Bank v. Rumbolt, 2024 IL App (1st) 231083-U, ¶ 1. The Rumbolts defaulted on the modified loan in 2014 so Fifth Third initiated foreclosure proceedings. Fifth Third asserted both holder status and the fact it was the mortgagee as the basis for its standing to foreclose.

2. The Rumbolts challenged Fifth Third’s standing on the basis the modified loan documents identified Freddie Mac as the owner of the loan. The trial court rejected the Rumbolts’ argument finding ownership irrelevant to the issue of standing since Fifth Third was the holder. The lower court granted Fifth Third’s summary judgment and the Rumbolts appealed. The First District affirmed the foreclosure judgment explaining that “Illinois does not require that a foreclosure action be filed by the owner of the note and mortgage” and clarifying that “the legal holder of the indebtedness, a pledgee, an agent, or a trustee” all have the authority to bring a foreclosure suit.

3. Since the First District issued an order rather than a written opinion it lacks precedential impact under Illinois Supreme Court Rule 23(e)(1); however, the decision clarifies and limits the evidentiary proof required to establish standing so it can still be used to persuade and educate lower courts on the issue of standing.

Click here to read the full article