DS News

74 As mortgage foreclosures in Illinois trend toward being increasingly litigated, demand letters have become a battleground issue in mortgage foreclosure litigation, with recent case law illustrating both the need for notices tailored to the specific verbiage of mortgages, as well as the impact of a defendant's answer on their ability to raise a notice issue. A recent Illinois appellate case illustrated the peril in failing to adhere to the specific mailing requirements for demand letters. In Deutsche Bank Nat'l Trust Co. v. Roongseang, 2019 IL App (1st) 180948, the demand letter at issue had been sent by certified mail, and the defendant homeowners argued that "certified mail is sufficiently different from first class mail to require proof of actual delivery." Id. at ¶25. e mortgage was a Fannie Mae/Freddie Mac Uniform Instrument, a common mortgage form, and the court's analysis turned on paragraph 15 of the mortgage, which provides that "[a]ny notice sent to the borrower will be deemed given 'when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means.'" Id. at ¶25. e court ultimately found that, rather than an "extra service" of first-class mail, certified mail fell into the category of "other means" because "the different delivery services associated with them affect the receipt of notice." Id. at ¶34. For this reason, the court found that, for a Fannie Mae/Freddie Mac Uniform Instrument "... where plaintiff chose to send the acceleration notice via certified mail, it was sent by 'other means' and proof of actual delivery of the notice is required to establish compliance with the notice provisions of the mortgage." Id. at ¶35. Under this new ruling, servicers should avoid sending notices via certified mail only if first class is all that is required. However, the Roongseang decision pertained to the Fannie Mae/Freddie Mac Uniform Instrument; there are myriad mortgage forms that are in use and have been used in the past that are still in effect, all of which can have different notice requirements. For instance, some mortgages require that notices be sent by certified mailing. Servicers must carefully review their mortgage documents and plan accordingly to document receipt by borrowers. e issue of whether a borrower can raise a challenge to the sufficiency of a demand letter has been examined in two recent Illinois cases, with both cases resulting in favorable results for lenders and turning on how a foreclosure defendant answered the complaint. In Bank of N.Y. Mellon v. Wojcik, 2019 IL App (1st) 180845, the First Appellate District considered the issue of whether a borrower had waived the issue of whether a notice of default complied with the mortgage at issue. Id. at ¶¶8-9. In Wojcik, the borrowers responded to the deemed allegation found at 735 ILCS 5/15-1504(c)(9), "that any and all notices of default or election to declare the indebtedness due and payable or other notices required to be given have been duly and properly given," with a simple statement that "Defendants deny the above allegation." Id. at ¶7. e borrowers then filed a cross-motion for summary judgment challenging the sufficiency of the notice of acceleration. Id. at ¶8. e court stated that Rule 133(c) applied, as the parties agreed that "sending a proper 'notice of acceleration' was a condition precedent to Bank of New York's ability to file the instant foreclosure action." Id. at ¶20. e deemed DEALING WITH DEMAND LETTERS IN THE PRAIRIE STATE As mortgage foreclosures in Illinois trend toward being increasingly litigated, demand letters have become a battleground issue in mortgage foreclosure litigation. Quick Take By: Julie Dejong

• Cover