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Underwriters' Bulletin

Procedural Updates

Underwriting Guidelines: Personal Representatives for Deceased Mortgagors in Foreclosure Actions

The Illinois Supreme Court recently held that a mortgagee must name a personal representative for a deceased mortgagor for a trial court to obtain subject matter jurisdiction and enter a valid judgment in a foreclosure action. ABN AMRO Mortgage Group v McGahan, 237 Ill 2d 526, 931 NE2d 1190 (Ill, 2010). The court ruled that a mortgage foreclosure is a quasi in rem action and the trial court must obtain jurisdiction over the mortgagor as a necessary party under the Illinois Mortgage Foreclosure Law. 735 ILCS 5/15-1501(a)(1). Without obtaining jurisdiction over a representative of the decedent, the court lacks subject matter jurisdiction and any foreclosure action against the decedent may be declared void.

ATG has provided agents with initial guidance regarding compliance with McGahan, seeMortgage Foreclosures and Deceased Mortgagors. Lender counsel have asked us what procedure we specifically recommend to obtain a personal representative for a deceased mortgagor where there is no open probate case. In our companion piece,Personal Representatives for Deceased Mortgagors in Foreclosure Actions, we discuss procedural options. To summarize, they are as follows:

1. The lender may proceed under 735 ILCS 5/13-209(b)(2) to name a special representative for the deceased mortgagor; or,

 

2. The lender may proceed under 755 ILCS 5/9-4, to open a probate estate and name a personal representative. If the lender chooses this option, then ATG requires the lender to also file a claim in the estate, to ensure the validity of its mortgage foreclosure proceeding.

If you have further questions or concerns about specific transactions, please contact the Underwriting Department,legal@atgf.com, 217.403.0020, or 312.752.1990.

© ATG|Casenotes/Bulletin 1104_v4n3

[Last update: 4-22-11]