3. Written by Aurora is heartless, on 08-01-2009 20:52
Need I say more....
AURORA LOAN SERVICES, INC., Plaintiff,
v.
FRANK CRADDIETH and PEGGY CRADDIETH, Defendants-Appellees. APPEAL OF: MIDWEST REAL ESTATE INVESTMENT COMPANY, Intervenor-Appellant.
UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
No. 05-1858
October 24, 2005, Argued—March 31, 2006, Decided
Lead opinion by POSNER
1021 POSNER, Circuit Judge. This appeal by Midwest Real Estate Investment Company arises out of a diversity suit to foreclose a mortgage that Aurora, the plaintiff, owned on the Craddieths' home. The substantive issues are governed by Illinois law.
The suit was filed, and a foreclosure judgment entered, in 1999. But for reasons that are unclear, the foreclosure sale was not conducted until October 2004. Midwest was the high bidder, bidding $ 107,818.44. (The appraised value of the property was $ 170,000.) However, two or three weeks before the sale the Craddieths had obtained alternative financing that would have enabled them to retain their home: They had arranged for a loan in the form of a sale. They would sell their home to a third party pursuant to an installment land contract that provided that the "buyer" would hold the title to the property until the Craddieths had made their final payment of the sale price, that is, had fully repaid the loan, at which point the title would revert the Craddieths.
On the morning of the day of the foreclosure sale, the Craddieths' lawyer notified the court that his clients had made an alternative arrangement for paying back Aurora. But he mistakenly described the alternative as a "real" sale of the home to someone other than Midwest, rather than as a financing arrangement that would allow the Craddieths to keep their home. The judge, thinking that therefore the Craddieths were "going to be out of their house no matter what," refused to stop the foreclosure sale, at which Midwest was the high bidder. Midwest tendered the $ 107,818.44 purchase price to the court official who had conducted the sale, and the official issued Midwest a certificate of sale.
But before Midwest could take title to the property the foreclosure sale had to be confirmed by the district court. On November 16 the district judge convened a hearing on Aurora's motion to confirm the sale to Midwest. At the hearing, at which Midwest was not present, it was revealed that the Craddieths had indeed found a lender who was willing to pay the amount due Aurora on the mortgage. On December 21, the judge formally denied Aurora's motion to confirm the sale.
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