Burr Ridge, Illinois-based, Codilis & Associates provides clients with legal services spanning various aspects of real estate, including foreclosure. The Codilis and Associates team follows developments in the state foreclosure law arena. One noteworthy case heard in the 4th District Appellate Court of Illinois in 2022 was Estate of Topal.
This case brought to the forefront issues encountered when navigating state foreclosure law and probate law. A probate rule, requiring the filing of all claims within two years of the death of a decedent, impacted the validity of a mortgage lien. Because the probate claim wasn’t filed in time (the lender was unaware of the decedent’s death), the lender’s right to claim against the mortgage was nullified and it did not have the right to foreclose.
Interestingly, this issue was addressed in 1886 by the Illinois Supreme Court in Waughop v. Bartlett. Here, the foreclosure actions were classified in such a way that claims arising in probate would not be applied to “all possible claims.” This decision was rejected in a subsequent Illinois Supreme Court decision, but was revisited by the appellate court in Estate of Topal. The court affirmed that failure by the lender to file a timely claim prevented it from accessing estate assets and recovering its debt in probate. However, this does not mean that the lender could not “proceed with a future foreclosure action against the property covered by the mortgage.” This preserves the potential of the lender to recover on debt through foreclosure, while stipulating that the lender cannot seek funds beyond what the foreclosure brings through an avenue such as probate.
