Illinois App. Court Rejects Challenge To Foreclosure Affidavit Based On Reliance On Prior Servicer’s Records

The Appellate Court of Illinois, First District, recently upheld a trial court’s order granting a mortgagee’s motion for summary judgment, judgment of foreclosure, sale, and order confirming the foreclosure sale.

In so ruling, the Appellate Court held that: (1) The current mortgagee’s reliance on the business records of prior mortgage servicers in its summary judgment and foreclosure affidavit did not affect the propriety of the affidavit; and (2) The borrower’s affidavit asserting performance under a supposed Home Affordable Modification Program agreement were unsubstantiated, conclusory and merely self-serving, and the trial court did not err in disregarding and rejecting the borrower’s affidavit.

A copy of the opinion in U.S. Bank National Ass’n v. Kasimir is available at:  Link to Opinion.

A borrower obtained a loan secured by a mortgage in 2007. The mortgage loan was subsequently sold and assigned to a different company (“first assignee”). In 2011, the first assignee filed a foreclosure action against the borrower.

The borrower defended the foreclosure action and argued that he entered into the loan with the originating lender, and that the first assignee did not have standing to bring the foreclosure action. After a prolonged period of litigation, the mortgage loan was sold and assigned again, a different company (“second assignee”) was substituted in as the plaintiff of the foreclosure action.

In 2017, the second assignee filed a motion for judgment of foreclosure and sale of the property and a motion for summary judgment against the borrower. The borrower responded to the motion for summary judgment by submitting an affidavit that included allegations that he entered into a trial loan modification program plan with the first assignee.

The borrower swore in his affidavit that the first assignee promised to allow him to receive a permanent loan modification under the Home Affordable Modification Program, that he made three trial loan payments, and that the first assignee verbally informed him that “because of a system backlog, the loan documents would be delayed and he would need to continue making loan payments in the meantime.”  Under these circumstances, the borrower argued, the foreclosure should never have been filed, and the second assignee “was legally bound to give a permanent HAMP loan modification to him.”  The borrower filed his own motion for summary judgment against the mortgagee based on the same affidavit.

The second assignee argued that the borrower raised these allegations for the first time at the motion for summary judgment and therefore should be deemed waived and not considered. Moreover, the second assignee argued, the borrower’s only evidence supporting borrower’s claim was his self-serving and unsupported affidavit. In 2017, the trial court denied both parties’ motions for summary judgment but ruled the second assignee did have standing to pursue the foreclosure.

In 2019, the mortgage loan was sold and assigned again and another entity (“third assignee”) was substituted in as the foreclosure plaintiff. The third assignee filed a new motion for summary judgment and argued that it established a prima facie case for foreclosure, that the borrower had waived any HAMP-related defense, and that the HAMP program was terminated such that the borrower had no available remedy. The third assignee also argued that the borrower’s only evidence supporting the borrower’s claim was his self-serving and unsupported affidavit.

In 2019, the mortgage loan was sold and assigned again and another entity (“fourth assignee”) substituted in as the foreclosure plaintiff in the case prior to the adjudication of the motion for summary judgment. The borrower also cross-filed a motion for summary judgment raising substantially similar claims and defenses that he raised in the previous motion for summary judgment hearing.

This time, the trial court granted the mortgagee’s summary judgment motion and denied the borrower’s summary judgment motion. In its ruling, the trial court found that the mortgagee’s business records affidavit complied with Illinois Supreme Court rules and were admissible while the borrower’s affidavit was conclusory and referred to unsubstantiated promises and allegations that were not supported with other evidence. As a result, the trial court held the borrower did not raise any genuine issues of material fact to overcome the mortgagee’s motion for summary judgment.

In June of 2021, the trial court entered a judgment of foreclosure and sale of the property and entered an order approving the sale. This appeal followed.

On appeal, the borrower argued that the statements in his affidavit regarding his alleged approval for a HAMP loan modification and performance under its terms created a genuine issue of a material fact; his affidavit was not merely conclusory, and that the trial court improperly considered the mortgagee’s affidavit instead of declaring it inadmissible hearsay due to the fact that it relied on records of other companies.

In addressing the borrower’s arguments, the Appellate Court found that the borrower was properly informed that his loan modification application was denied. Furthermore, the Appellate Court held that the business records affidavit submitted by the plaintiff was admissible because the business records affidavit was made in the regular course of business and at or near the time of event or occurrence. US Bank, National Ass’n v. Avdic, 2014 IL App (1st) 132430, ¶ 40).

The Appellate Court further acknowledged that banks freely buy, sell, and transfer mortgage loans and it was not relevant that some business records were created by another company.

Lastly, the Appellate Court concurred with the trial court that the borrower’s affidavit was self-serving and conclusory and did not create any genuine issue of material fact sufficient to deny the mortgagee’s motion for summary judgment.

Accordingly, the Appellate Court held that the trial court properly granted the mortgagee’s motion for summary judgment and denied the borrower’s cross-motion for summary judgment, and therefore affirmed the trial court’s judgment.