UncategorizedClient Success Story: A Foreclosure Dismissed with Prejudice

It is rare for a foreclosure to be dismissed “with prejudice,” meaning that it cannot be refiled by the lender as the case has fully concluded.

The case may be dismissed for different reasons, including a payment arrangement by the homeowner under a loan modification or a reinstatement of the delinquent payments.

Sometimes a case can be dismissed because a condition that was required before the filing of the foreclosure was not met. Whatever the case, working with an experienced real estate lawyer positions you for the best outcome during a foreclosure case.


Minchella & Associates has worked with many homeowners on cases involving threats of foreclosure. One client was facing such an issue.

She was approved for a grant from the Illinois Housing Development Authority to help bring her current.

The lender refused to accept the grant to cover the past-due payments. This left the client at risk of losing her home.

More importantly, the lender was required under the terms of the mortgage to meet with the client to see if there were options that could be used to prevent the foreclosure.


The main challenge of the case arose because the lender filed two foreclosure cases against the homeowner and even after being advised the first time that they had failed to have a meeting with them after the default and before the foreclosure case was filed, they filed the second case anyway.

In Illinois the foreclosure process takes almost a year from the initial default until the lender can get possession of the property. That time frame is extended if the homeowner fights the foreclosure. Lenders will often file a foreclosure even if they are in discussions with a borrower about modifying the loan, allowing a short sale or otherwise resolving the delinquency, because they do not want to further delay the foreclosure process if no solution is realized.

In this case, the loan was guaranteed by the Federal Housing Authority for an FHA loan. Terms of the loan required a face-to-face meeting with the homeowner to prevent foreclosure.

The court agreed that to prevent foreclosure, the terms required adherence to the requirements of the face-to-face meeting. Unfortunately, with the first case the lender was worried about losing the case, dismissed it, and then refiled it, still without the face-to-face meeting.

This was where we stepped in.


The second case went before a judge on our Motion to Dismiss.

Because the lender hadn’t initiated the face-to-face meeting outlined in the FHA loan during the first case and didn’t try to meet the client prior to the second case, we prevailed. The Judge not only dismissed the case but dismissed it without the lender’s right to refile on the basis of this default.


Once the case was dismissed with prejudice, it restricted the lender from refiling a foreclosure for the default upon which they brought both the first and second cases.
They might bring a third case if the homeowner defaults again, but at least in that instance the homeowner should have the right to a face-to-face meeting and should be able to seek solutions other than a foreclosure.

Minchella & Associates help in different ways where foreclosure is concerned. We are always looking for solutions for clients who are in financial distress with their property. We look at having the property sold, a short sale, a modification, or bankruptcy options.
The new uniform FHA mortgage documents do not require a face-to-face in the event of default. If we are helping a client with a newer uniform mortgage form, we need to look at other defenses to their foreclosure.

In this client’s case, the dismissal came because of mistakes made by the lender. Not following up with the face-to-face meeting outlined by the FHA loan gave the homeowner a leg up in the case, allowing for judgment in the homeowner’s favor.

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