Fifth Third Mortg. Co. v. McCord
| Decision Date | 29 October 2021 |
| Docket Number | 1-20-0512 |
| Citation | 2021 IL App (1st) 200512,195 N.E.3d 335,457 Ill.Dec. 421 |
| Parties | FIFTH THIRD MORTGAGE COMPANY, Plaintiff-Appellee, v. Angela MCCORD; Carl McCord, a/k/a Carl N. McCord; The United States of America Secretary of Housing and Urban Development ; the State of Illinois ; Capital One Bank (USA), N.A. f/k/a Capital One Bank; Unknown Owners; and Nonrecord Claimants, Defendants (Angela McCord, Defendant-Appellant). |
| Court | United States Appellate Court of Illinois |
Carla Sherieves, of CMS Law, LLC, of Chicago, for appellant.
Nicole H. Daniel and Alexander N. Wright, of Dinsmore & Shohl LLP, of Chicago, for appellee.
¶ 1 The plaintiff-appellee, Fifth Third Mortgage Company (Fifth Third), filed a foreclosure complaint in the circuit court of Cook County against the defendants, Angela McCord and Carl McCord. However, the matter subsequently proceeded on appeal only as to Ms. McCord. Thus, although Mr. McCord's name appears in the caption, he is not a party to this appeal. In the proceedings in the trial court, Ms. McCord argued that Fifth Third could not move forward with foreclosure proceedings because it had failed to conduct a face-to-face meeting with her prior to initiating the foreclosure as required by federal regulations. The circuit court rejected Ms. McCord's arguments and granted summary judgment in favor of Fifth Third. The circuit court also entered an order confirming the sale of the property. Ms.
McCord now appeals. For the following reasons, we vacate the judgment of the circuit court of Cook County and remand the case for further proceedings.
¶ 3 On September 24, 2009, Ms. McCord executed a promissory note in the amount of $231,418, secured by a mortgage on a property located at 3901 St. Charles Place, Bellwood, Illinois (the property). Ms. McCord's husband, Carl McCord, signed the mortgage agreement along with Ms. McCord, but only Ms. McCord signed the promissory note. Fifth Third was the mortgagee.
¶ 4 In 2012, Mr. and Ms. McCord entered into a loan modification agreement with Fifth Third after they defaulted on their mortgage payments. And in October 2014, Ms. McCord individually entered into a second loan modification agreement with Fifth Third.
¶ 5 On July 28, 2016, Fifth Third filed a foreclosure complaint against Mr. and Ms. McCord.1 It is from that complaint that the subsequent proceedings and this appeal arise. On December 21, 2016, Mr. and Ms. McCord moved to dismiss the foreclosure complaint on the basis that Fifth Third failed to conduct a face-to-face meeting with them prior to filing the foreclosure complaint, as required for mortgages insured by the Department of Housing and Urban Development (HUD). In response, Fifth Third argued that it was exempt from conducting a face-to-face meeting with Ms. McCord because, in February 2014, Fifth Third received a cease-and-desist letter from Ms. McCord's former attorney. Fifth Third claimed that the letter requested that Fifth Third cease and desist any further communication with Ms. McCord regarding the collection of the debt pursuant to the Fair Debt Collection Practices Act ( 15 U.S.C. § 1692 et seq. (2012) ).
¶ 6 Fifth Third attached, to its response, the letter from Ms. McCord's former counsel, which was titled, "Limited Power of Attorney" and was dated February 1, 2014. The February 1, 2014, letter stated that Ms. McCord appointed her former counsel to act as her "attorney-in-fact to contact and negotiate with my mortgage lender(s) to resolve their mortgage problems including but not limited to, a loan restructure, forbearance agreement, postponement of sale, delay of foreclosure proceedings, or negotiation of short sale payoff on [the property]." The February 1, 2014, letter further stated:
¶ 7 Fifth Third also attached, to its response, a copy of a letter addressed from Fifth Third to Ms. McCord and dated March 10, 2014. The March 10, 2014, letter stated:
There is no indication in the record that Ms. McCord or her attorney acknowledged or responded to Fifth Third's March 10, 2014, letter. The March 10, 2014, letter was not signed by anyone, nor did it provide the name of any Fifth Third representatives whom Ms. McCord should contact. It also did not contain the form referenced in the letter. Ms. McCord later denied ever having received the March 10, 2014, letter.
¶ 8 On July 17, 2017, the trial court struck Mr. and Ms. McCord's motion to dismiss the foreclosure proceedings and granted them leave to file an answer to Fifth Third's complaint. Mr. and Ms. McCord subsequently filed an amended answer, in which they raised an affirmative defense that Fifth Third failed to conduct a face-to-face meeting with them prior to initiating the foreclosure.
¶ 9 On December 4, 2017, Mr. and Ms. McCord issued written discovery to Fifth Third in the form of interrogatories and document production requests. On January 16, 2018, Fifth Third submitted its responses to the interrogatories and requests for production of documents. Kathy Bohman, an assistant vice president at Fifth Third, was the person who responded to the discovery requests on behalf of Fifth Third. Ms. Bohman attested that Fifth Third acted in accordance with Ms. McCord's instructions in the February 1, 2014, letter in not conducting a face-to-face meeting as required by HUD regulations.
¶ 10 On April 23, 2018, Fifth Third filed a motion for summary judgment and judgment of foreclosure, which is the subject of this appeal. The motion for summary judgment argued that Fifth Third had established a prima facie case for foreclosure because there was no genuine issue of material fact that Mr. and Ms. McCord had defaulted on their mortgage payments. Fifth Third again argued that it was not required to conduct a face-to-face meeting with Mr. and Ms. McCord. Citing 24 C.F.R. § 203.604(c)(3) (2018), Fifth Third averred that "[a] face-to-face meeting is not required if the mortgagor has clearly indicated that he will not cooperate in an interview." Fifth Third claimed that, because it had received a letter that it considered a cease-and-desist letter from Ms. McCord's then counsel (referring to the February 1, 2014, letter), Ms. McCord had requested that Fifth Third stop communicating with her, thereby making it "not even possible" to arrange a face-to-face meeting.
¶ 11 On June 15, 2018, Mr. and Ms. McCord filed a motion for leave to depose Ms. Bohman. The trial court granted the motion, and on October 23, 2018, counsel for the McCords deposed Ms. Bohman. During the deposition, Ms. Bohman responded to questions from the McCords’ attorney regarding the March 10, 2014, letter, which Fifth Third claimed it sent to Ms. McCord and in which it acknowledged receipt of her cease-and-desist letter. Ms. Bohman disavowed knowledge of the March 10, 2014, letter. She agreed that the letter was not signed by anyone on behalf of Fifth Third and further testified that she did not know who drafted and sent the March 10, 2014, letter; in other words, she knew nothing about the March 10, 2014, letter.
¶ 12 On January 11, 2019, Mr. and Ms. McCord filed a motion for leave to file a combined response to Fifth Third's motion for summary judgment and cross-motion for summary judgment. The basis for the combined motion was that Fifth Third failed to comply with federal regulations for the HUD-insured mortgage; specifically, that it failed to make a reasonable effort to arrange a face-to-face meeting with the McCords prior to initiating foreclosure proceedings. Mr. and Ms. McCord averred that the February 1, 2014, letter that Ms. McCord's former counsel sent to Fifth Third was not a cease-and-desist letter but rather a limited power of attorney letter and third-party authorization, which requested Fifth Third to communicate directly with their counsel. Mr. and Ms. McCord pointed out that Fifth Third executed a loan modification agreement with...
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