I recently ran across a new Cook County case and, while the case is interesting, I hesitate to even bring it up because everyone will think that it’s open season now for deficiency judgments in Illinois.
Trust me, it’s not. Deficiency judgments are still nonexistent to rare in Illinois.
The case is Metrobank v. Cannatello, 2012 Ill App 1st 110529. Here’s what happened: Cannatello borrowed almost $200k for a multi-family property in the south side of Chicago from Chicago Community Bank (Metrobank took over Chicago Community Bank along the way). A foreclosure was filed against him and the lender asked for a deficiency judgment of about $50k after the sheriff’s sale.
When the foreclosure started, a member of Mr. Cannatello’s family was served with the summons at his house. He lived elsewhere, not in the property being foreclosed. This is called “abobe” or “substitute” service. Any person over age 13 who answers the door at the defendant’s house can be served on the theory that the person receving the summons will tell the defendant (and hopefully will not just throw it in the garbage). This applies to all civil cases, not just foreclosures.
To make a long story short, the court said that it was allowable to enter a deficiency judgment after abode service and that personal service on the defendant was not necessary. This is not really a surprising result.
What does this case mean? The case just makes it clear that a deficiency judgment can be entered if a member of your family accepts the summons.
Are lenders starting to get deficiency judgments? No. They are still very rare. This was a loan on a multi-family investment property from a small bank. I have said before that mortgages given by small, local lenders hold a much higher rise of deficiency judgments than your garden variety single-family home mortgage from Wells Fargo or Chase.
Should I answer the door if I am being served with a summons in a foreclosure? That is up to you. The lender cannot get a deficiency judgment unless there is personal service (the summons is handed to you) or substitute service (summons is give to someone over age 13 at your house). Deficiency judgments are still extremely rare, so if you are served with the summons it’s not the end of the world because it’s unlikely that a deficiency will ever be entered. But people are touchy about this and, to be honest, it seems like most of them do dodge service. I have talked to people during the period when the process server is trying to serve them and they are, shall be say, a tad jumpy about it, because it’s an unfamiliar situation, and they feel like quasi-criminals because someone is pursuing them. Some accept the summons because they literally can’t take the pressure for the two weeks that the process server attempts service.