Key Points | ILLINOIS COURT AFFIRMS ORDER ALLOWING SALE OF REAL PROPERTY FREE OF MORTGAGE LIEN PRIORITIZING PAYMENT OF TAXES & ADMINISTRATOR’S FEES
- Diaz | Anselmo
- Oct 29, 2024
- 2 min read
Updated: Mar 20
An Illinois appellate court affirmed a costly ruling wherein the trial court refused to grant a judgment of foreclosure to mortgagee, Carrington Mortgage Services, LLC, (Carrington), while granting the estate administrator’s request for a private sale of the deceased’s real property free and clear of Carrington’s mortgage lien pursuant to 755 Ill. Comp. Stat. Ann. 5/20-6. Carrington Mortg. Servs., LLC v. Israel, 2024 IL App (2d) 230335-U, ¶¶ 1-2.
In the probate matter, the court considered competing summary judgment motions – the bank sought foreclosure, which the court denied, and the administrator sought approval for a section 20-6(b) sale, which the court granted. Carrington failed to appeal those rulings (contained in the Sale Order). Pursuant to 755 ILCS 5/18-10, the court treated Carrington’s lien as a seventh class claim and entered a distribution order which resulted in Carrington being paid after the administrator, the administrator’s attorney, the real-estate agent, the title company and the United States. Carrington received $27,264.69 out of $465,000 in sale proceeds and the court deemed Carrington’s first-priority lien, which exceeded $500,000, satisfied.
On Carrington’s appeal of the Distribution Order, the Second District affirmed finding that Carrington forfeited the right to challenge how the court distributed the sale proceeds because Carrington failed to appeal the Sale Order. Although a harsh result and costly lesson, it could have been avoided. Considering the Court’s commentary and analysis, it seems likely an appeal of the Sale Order would have been successful. Further, even after the court approved the 20-6(b) sale, our firm has been successful in arguing that proceeds from the sale of the property under section 20-6(b) should first be used to satisfy the bank’s mortgage lien.