Can I Stop The Confirmation Of My Homes Sale

Can I Stop the Confirmation of My Home's Sale? 735 ILCS 5/15-1508 Explained

An Illinois foreclosure lawsuit does not end with a sheriff's sale of the home. Although a judgment of foreclosure and sale is a judgment, it is not a final judgment. Before a foreclosure case is finalized, the sheriff's sale must be judicially confirmed.[1] Sheriff's sales are almost always confirmed. However, there are several reasons why a sale may not be confirmed.[2] Most of the objections to confirmation involve the nature of the sale.[3] A recent addition to the Illinois Mortgage Foreclosure Law (IMFL) creates an objection that is unrelated to the sale itself. These objections are powerful because they represent one of the last opportunities a home owner has to defend his home from foreclosure.

Denying confirmation of sale can be powerful because it can improve a home owner's bargaining position in settlement negotiations. It may not seem like it, but attempting a loan modification is essentially a settlement negotiation. The extra time gained can be crucial. Preventing the confirmation of a sale does not vacate the judgment of foreclosure, but it does prevent the lender from enforcing that judgment. Recent changes to the IMFL have added extra protection for home owners seeking a loan modification under the Making Home Affordable (MHA) program established by the Obama administration.

Pursuant to §15-1508(d-5), if a home owner has applied for assistance under the MHA program, and the property was sold in violation of the program's guidelines, then the sale will not be confirmed.[4] For example, a loan servicer is not allowed to file a foreclosure action until it has evaluated a home owner's Home Affordable Mortgage Program ("HAMP") eligibility.[5] If the home owner is eligible, then the servicer must offer a trial modification before proceeding to sale.[6] It is worth noting that while HAMP is the most visible MHA program, it is not the only one that triggers §15-1508(d-5). The Home Affordable Foreclosure Alternatives program ("HAFA") also limits when a servicer may proceed to foreclosure.[7] In order to be protected by MHA programs, the home owner must apply for them. Complacency does not trigger the protections of §15-1508(d-5). Although HAMP's overall success has been underwhelming, it certainly cannot hurt to apply. Being denied a HAMP modification also triggers HAFA, which requires that servicers evaluate several options before proceeding to foreclosure. Even though an order denying the confirmation of sale won't re-open the main case, a denied sale still buys valuable time.

Using §15-1508(d-5) as a basis for denying the confirmation of sale will not necessarily provide a basis for vacating the judgment of foreclosure. As an end-of-case strategy, delaying the confirmation of sale is a last-chance measure. It is very difficult to present a credible motion to vacate a judgment if it has been more than thirty days from the entry of that judgment. If the home owner has largely ignored the case up to this point, only a few fact patterns will justify the attempt. In those situations where it is possible to vacate the judgment, facts will generally exist that establish significant problems with the lender's case.

When significant problems exist with the lender's case, §15-1508(b) becomes the more important section. The "if justice was not done" provision of §15-1508(b) is a catch-all that includes many defenses and fairness-based arguments. Even if a party makes its first appearance at the confirmation of sale hearing, it may challenge the sale's confirmation.[8] Although much of the case law on this subject relates to the sale price of the property, other arguments may be made to defeat the confirmation of sale.[9] Courts are to view the terms of the sale in their entirety when determining whether a sale should be confirmed.[10] Illinois courts have indicated that sales price is one part of the overall terms of the sale.[11] Therefore, the identity of the seller would also be part of the terms of the sale. This means that a home owner can assert the plaintiff-lender's lack of standing to sue at the time of the confirmation of sale.

If a lender cannot demonstrate that it owns the loan associated with the property, it cannot prove that it has standing to sue. If the lender lacks standing to sue, the lender also lacks the ability to sell the house. This is because the lender must have owned the loan, and have been able to demonstrate ownership, at the time it filed the lawsuit. If a lender cannot demonstrate ownership at the time of filing, the case must be dismissed and re-filed as a new case. If a home owner can successfully challenge the lender's standing at the confirmation of sale hearing, then the case against him must be dismissed. Since the judgment of foreclosure has already been entered at this stage in litigation, a motion challenging the confirmation of sale on these grounds should also be accompanied by a motion to vacate the judgment of foreclosure. If the lender lacked standing at the time of the sale, the lender also lacked standing at the time the case was filed.

In general, a motion to deny confirmation of sale is useful for giving the home owner more time to work out a loan modification or find a new place to live. Using §15-1508(d-5) to deny confirmation also forces lenders to complete their obligations pursuant to MHA's guidelines. Similarly, barring a serious issue with the lender's case, or some underhanded dealing on its part, using §15-1508(b) will only buy time. In some specific instances, it may represent a final chance to put facts in front of the judge that merit vacating the judgment of foreclosure and sale. In those instances it can be a powerful tool.

[1] 735 ICLS 5/15-1508.

[2] 735 ILCS 5/15-1508(b).

[3] A sale will not be confirmed if it was not properly noticed, if the terms of the sale were unconscionable, if the sale was conducted fraudulently, or if justice was not done. 735 ILCS 5/15-1508(b)((i)-(iv).

[4] 735 ILCS 5/15-1508(d-5).

[5] See Homeowner Frequently Asked Questions, Home Affordable Modification Program (HAMP), "What if I am facing foreclosure?," available at (last visited February 20, 2011).

[6] Id.

[7] See Homeowner Frequently Asked Questions, Home Affordable Foreclosure Alternatives (HAFA), "How can I be considered for HAFA?," available at (last visited February 20, 2011).

[8] See JP Morgan Chase Bank v. Fankhauser, 383 Ill. App. 3d 254, 265-66 (2nd Dist. 2008)(holding that an interested party's failure to defend a case did not preclude it from challenging confirmation of sale).

[9] See generally Commercial Credit Loans, Inc. v. Espinoza, 293 Ill. App. 3d 915, 927-30 (1st Dist. 1997).

[10] Id.

[11] Id.