In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 13‐1017
HSBC BANK USA, N.A.,
as Trustee for Nomura Home Equity Loan, Inc.,
Asset‐Backed Certificates, Series 2006‐FM1,
Plaintiff‐Appellee,
v.
KIRKLAND TOWNSEND,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 12 C 3921 — Gary S. Feinerman, Judge.
____________________
ARGUED NOVEMBER 3, 2014 — DECIDED JULY 16, 2015
____________________
Before WOOD, Chief Judge, and EASTERBROOK and
HAMILTON, Circuit Judges.
WOOD, Chief Judge. This is one of the flood of mortgage
foreclosure cases that hit the country after the 2008 economic
downturn. Before we can say anything about its merits,
however, we must decide whether an appealable final judg‐
ment is before us. That question turns out to be more com‐
2 No. 13‐1017
plicated than usual, given the many steps that must take
place before the foreclosure process is complete. Here, the
case has reached the point where the bank seeking to fore‐
close has secured a judgment of foreclosure and an order of
sale pursuant to Illinois law. The district court declared that
its judgment was “final,” but at the same time, it acknowl‐
edged that the public judicial sale could take place only after
certain additional steps were completed, including the expi‐
ration of the statutory reinstatement and redemption periods
to which the mortgagor was entitled under Illinois law. The
court also noted that it would need to hold a hearing to con‐
firm the sale (thereby allowing it to go to closing) upon a
party’s motion, and at such a hearing it could decide not to
confirm the sale if, among other things, “justice was … not
done.”
Kirkland Townsend has brought an appeal from the rul‐
ings we have just described. Concerned about our appellate
jurisdiction, we asked the parties for additional briefing on
that point. Those briefs, plus our independent review of the
case, convince us that the appeal must be dismissed for want
of appellate jurisdiction.
I
In 2005, Townsend signed a promissory note for $136,000
with Fremont Investment & Loan. He needed the money to
purchase a condominium in the South Shore neighborhood
of Chicago. At the same time, Townsend executed a mort‐
gage on the property, naming Mortgage Electronic Registra‐
tion Systems, Inc. (MERS) as the mortgagee. (MERS was
Fremont’s nominee.) After Townsend ceased making pay‐
ments on his mortgage in 2011, MERS assigned the mortgage
to HSBC Bank, USA; MERS remained Fremont’s nominee,
No. 13‐1017 3
however, for a junior mortgage Fremont held in the amount
of $34,000. Shortly thereafter, HSBC filed a complaint against
Townsend in the district court asking for a judgment of fore‐
closure of the mortgage, sale of the condominium, and relat‐
ed relief under Illinois law. The district court’s subject‐matter
jurisdiction was based on diversity. See 28 U.S.C.
§ 1332(a)(1).
Representing himself, Townsend answered the com‐
plaint. HSBC then moved for summary judgment. It sup‐
ported its motion with evidence showing that Townsend
was in default; that he owed $141,425.65 on the note; and
that HSBC owned both the note and the mortgage. Town‐
send failed to respond to HSBC’s motion, and so the district
court granted it in open court on September 6, 2012. Later
that day, it entered a written judgment of foreclosure, an or‐
der finding that Townsend owed the bank $143,569.65 (rep‐
resenting principal, interest, attorney’s fees, and costs), and
an order providing for judicial sale of the property if Town‐
send did not pay before the redemption period expired. The
court wrote that the judgment was “a final and appealable
order” that was “fully dispositive” of all defendants’ inter‐
ests for purposes of Federal Rule of Civil Procedure 54(b).
At the same time, the court retained “jurisdiction over
the parties and subject matter of this cause for the purpose of
enforcing th[e] Judgment or vacating said Judgment if a re‐
instatement is made as set forth in this Judgment.” The court
acknowledged that “[u]pon motion and notice,” it would be
required to hold a hearing to confirm the judicial sale pursu‐
ant to 735 ILCS 5/15‐1508. After such a hearing, it could de‐
cide not to enter a confirmation order, if it found that appro‐
priate parties did not receive proper notice of the sale, if the
4 No. 13‐1017
terms of the sale were unconscionable, if the sale was con‐
ducted fraudulently, “or … justice was otherwise not done.”
Thirty days after the order confirming the sale, the purchaser
obtains the right to possession of the property. 735 ILCS
5/15‐1508(g). (This is a good time to observe that the word
“sale” is used in several senses in the governing Illinois stat‐
utes: (1) as the formal judicially authorized event at which
people bid for the property in foreclosure—we call this the
“judicial sale” in this opinion; (2) as the confirmation of the
judicial sale—the step, resembling closing, at which the pur‐
chaser’s right to a deed is established; and (3) as the final
transfer of possession. We have attempted to be precise
about which meaning is involved at various points in our
discussion.)
Elsewhere in the judgment, the district court said that it
would appoint a special commissioner to conduct the judi‐
cial sale according to instructions in the order. The court
concluded that HSBC’s interest was superior to that of MERS
(which as we have noted was still acting on Fremont’s behalf
as nominee for its junior mortgage). It ordered that ultimate‐
ly the proceeds of the sale would be paid out according to
the terms of the judgment and 735 ILCS 5/15‐1512. The
judgment also provided that if the proceeds of a confirmed
sale came up short, a deficiency judgment would be entered
against Townsend for the difference.
After the parties submitted their briefs on Townsend’s pro
se appeal of the district court’s foreclosure judgment, we or‐
dered supplemental briefing on the question of appellate ju‐
risdiction. We asked the parties to address whether (1) the
district court improperly certified its judgment as final un‐
der Rule 54(b); (2) its judgment qualified as an appealable
No. 13‐1017 5
injunction under 28 U.S.C. § 1292(a); or (3) the doctrine of
Forgay v. Conrad, 47 U.S. (6 How.) 201 (1848), supported ju‐
risdiction. We recruited attorney Kenneth J. Vanko to repre‐
sent Townsend, and we are grateful to him for his able ser‐
vice to his client and the court, and to all counsel for the
helpful supplemental briefs.
II
We consider first whether we may hear Townsend’s ap‐
peal under the final judgment rule expressed in 28 U.S.C.
§ 1291. That provision states that the courts of appeals “shall
have jurisdiction of appeals from all final decisions of the
district courts of the United States.” As the Supreme Court
recently reiterated, “[a] party can typically appeal as of right
only from [a] final decision.” Bullard v. Blue Hills Bank, 135 S.
Ct. 1686, 1691 (2015). The first question before us is whether
the district court’s disposition of Townsend’s case was final
for purposes of section 1291.
Although section 1291 should be given “a practical rather
than a technical construction,” the law’s “core application is
to rulings that terminate an action.” Gelboim v. Bank of Am.
Corp., 135 S. Ct. 897, 902 (2015) (quotations omitted). Such a
decision “ends the litigation on the merits and leaves noth‐
ing for the court to do but execute the judgment.” Catlin v.
United States, 324 U.S. 229, 233 (1945). Several aspects of the
district court’s ruling in this case convince us that it fails to
meet this standard.
When all is said and done, the district court’s judgment of
foreclosure and order to conduct a judicial sale leave too
much up in the air for us to regard the action as terminated,
with nothing left but the mechanical details of collection or
6 No. 13‐1017
other enforcement measures. Illinois law specifies the vari‐
ous steps that must be taken; it is the governing law in this
diversity action, and so we must see how the district court’s
actions fit into the regime Illinois creates for foreclosures.
Like many states, Illinois protects mortgagors in foreclosure
by giving them statutory periods of both redemption and
reinstatement. The reinstatement statute permits the mort‐
gagor to “reinstate the mortgage” by “curing all defaults
then existing.” At that point, “the foreclosure and any other
proceedings for the collection or enforcement of the obliga‐
tion secured by the mortgage shall be dismissed and the
mortgage documents shall remain in full force and effect as
if no acceleration or default had occurred.” 735 ILCS 5/15‐
1602. The redemption statute speaks of the mortgagor’s abil‐
ity to “redeem the real estate from the foreclosure,” 735 ILCS
5/15‐1603(f)(1), and states that upon receiving the amount
owed, the mortgagee “shall promptly furnish the mortgagor
with a release of the mortgage or satisfaction of the judg‐
ment, as appropriate, and the evidence of all indebtedness
secured by the mortgage shall be cancelled.” 735 ILCS 5/15‐
1603(f)(3).
This language indicates that the exercise of the right of ei‐
ther reinstatement or redemption has the potential to undo
the foreclosure, scuttling the need for the process of execut‐
ing the judgment. The district court was well aware of this:
its foreclosure judgment explicitly incorporates these statu‐
tory rights, stating that “[t]he subject real estate shall be sold
pursuant to statute at the expiration of both the reinstate‐
ment period and the redemption period.” This language in‐
dicates that the expiration of both of these periods—an event
that will occur if a mortgagor fails to exercise either right—is
a condition that must be satisfied before the initial judicial
No. 13‐1017 7
sale of the foreclosed property may proceed; closing, con‐
firmation, and transfer cannot take place until the successful
bidder is identified. As the Supreme Court noted years ago,
“[a] question remaining to be decided after an order ending
litigation on the merits does not prevent finality if its resolu‐
tion will not alter the order or moot or revise decisions em‐
bodied in the order.” Budinich v. Becton Dickinson & Co.,
486 U.S. 196, 199 (1988). But if the resolution of the outstand‐
ing question will either alter the order or moot or revise the
resolution of the case, finality is lacking. In every case decid‐
ed under Illinois law, entry of the foreclosure judgment
marks the beginning of a period in which critical matters
remain to be resolved: whether the mortgagor will exercise
her statutory redemption and reinstatement rights, and,
should a judicial sale occur, whether it complies with all
statutory requirements.
Other aspects of Illinois law point in the same direction.
The law expressly provides for a post‐judicial‐sale inquiry
into whether “justice was otherwise not done” by the auc‐
tion. 735 ILCS 5/15‐1508(b)(iv). The same provision directs
the court on motion to determine whether proper notice of
the sale was given and whether the sale was conducted
fraudulently or with unconscionable terms. If the court finds
any of these things to be true, it need not confirm the sale.
Confirmation is therefore a critical step. Not until the court
confirms the sale triggered by the judgment of foreclosure
may it enter a deficiency judgment against the mortgagor.
Damages are part of the judgment and essential to finality;
lack of quantified damages prevents an appeal. See Liberty
Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 744 (1976) (“[W]here as‐
sessment of damages or awarding of other relief remains to
be resolved have never been considered to be ‘final’ within
8 No. 13‐1017
the meaning of 28 U.S.C. § 1291.”).
A number of questions remain about the damages Town‐
send will have to pay. The amount that the judicial sale
yields depends not only on the price obtained at the auction
but also on, for example, whether the auction was conducted
in a commercially reasonable way to maximize the price. If it
was not, the court might confirm the sale but decline to enter
a deficiency judgment. See 735 ILCS 5/15‐1508(b)(2). A mort‐
gagor might protest that an auction delivering far below the
amount specified in the foreclosure judgment was not con‐
ducted in the way most likely to attract a high bid. The dis‐
trict judge must then evaluate that assertion. If the judge de‐
cides that better advertising or other measures would have
produced a bid closer to the full amount owed, he might ei‐
ther cut or deny any deficiency judgment. If there are serious
defects in the auction, then the district court has the authori‐
ty not to confirm the sale at all, and transfer of possession
will never occur. The deficiency judgment amount might al‐
so depend on how much time elapses between the district
court’s sale order (which quantifies the debt at that moment)
and the purchaser’s payment of the price at the auction. The
longer the delay, the more prejudgment interest must be
added under the terms of the note. This process is far from
mechanical. No one can know the amount of this part of the
court’s judgment until the asset has been exchanged for
money. That is fatal to finality.
Our dissenting colleague criticizes our description of Illi‐
nois law; he argues that Illinois courts have no discretion to
reduce deficiency judgments. In taking the position that a
deficiency judgment must, as a matter of law, be the differ‐
ence between the default amount and the foreclosure sale
No. 13‐1017 9
price, however, our colleague principally relies on a case that
cites a repealed section of the Illinois code. See Illini Fed. Sav.
& Loan Ass’n v. Doering, 516 N.E.2d 609 (Ill. App. Ct. 1987)
(quoting Ill. Rev. Stat. 1985, ch. 110, par. 15‐112 (repealed
1987)). Even in Illini, the court acknowledged that the defi‐
ciency judgment should reflect the property’s sale price “ab‐
sent any fraud or irregularity in the foreclosure proceeding.”
516 N.E.2d at 611. The potential for irregularity is exactly
what concerns us here. And in any event, the current version
of the law (which applied at the time of the events here)
gives courts discretion over deficiency judgments. A judge’s
order confirming a foreclosure sale “may also … provide for
a personal judgment against any party for a deficiency.” 735
ILCS 5/15‐1508(b)(2); see also 735 ILCS 5/15‐1508(f) (“If the
order confirming the sale includes a deficiency judgment …
.”) (emphases added in both). The statute uses the same dis‐
cretionary language to discuss the amount of the judgment:
the “judgment may be entered for any balance of money that
may be found due to the plaintiff, over and above the pro‐
ceeds of the sale or sales.” 735 ILCS 5/15‐1508(e) (emphasis
added). At most, some ambiguity may be introduced when
the statute later states that a “court shall also enter” a defi‐
ciency judgment in a confirmation order. Id. Even that com‐
mand is qualified, however, because the amount requested
must be “proven” and the court must be “otherwise author‐
ized” to enter the judgment. Id. The latter two safety valves
logically refer back to the court’s ability to evaluate the fair‐
ness of the foreclosure process.
Nothing in the district court’s foreclosure and judicial‐
sale order in this case gives us reason to think that the re‐
maining steps are so ministerial, inevitable, or unrelated to
the merits of the case that they do not defeat finality. We take
10 No. 13‐1017
as a given that many orders confirming post‐foreclosure ju‐
dicial sales proceed without a hitch (at least from the bank’s
perspective). But that does not mean that the rights of re‐
demption and reinstatement, or the court’s review of the
auction process, are meaningless. The Supreme Court of Illi‐
nois has said that the provision of section 15‐1508(b)(iv) re‐
quiring review to see if “justice was otherwise not done”
“acts as a safety valve to allow the court to vacate the judicial
sale and, in rare cases, the underlying judgment.” Wells Fargo
Bank, N.A. v. McCluskey, 999 N.E.2d 321, 329 (Ill. 2013). Nei‐
ther the percentage of cases in which this is found nor the
narrowness of the legal standard matter: finality does not
depend on the odds. The question is whether the existence of
these rights, which are embedded within Illinois’s foreclo‐
sure scheme, renders a foreclosure and judicial‐sale order
non‐final, when the sale is yet to be conducted and confirma‐
tion has not yet occurred. We believe that it does.
Finally, we note that our understanding of these statutes
matches that of the Illinois courts. The Supreme Court of Il‐
linois has said that it is “well settled” that a foreclosure
judgment is not a final judgment “because it does not dis‐
pose of all issues between the parties and it does not termi‐
nate the litigation.” EMC Mortg. Corp. v. Kemp, 982 N.E.2d
152, 154 (Ill. 2012). The court explained that “although a
judgment of foreclosure is final as to the matters it adjudi‐
cates, a judgment foreclosing a mortgage, or a lien, deter‐
mines fewer than all the rights and liabilities in issue because
the trial court has still to enter a subsequent order approving
the foreclosure sale and directing distribution.” Id. Though
the state’s view of finality for state‐law purposes does not
dictate the result for federal appellate jurisdiction, the Illi‐
nois court’s list of open questions is independently useful.
No. 13‐1017 11
In sum, there are several events in Illinois that can or
must occur between a foreclosure judgment entered pursu‐
ant to Illinois law and an eventual exchange of property for
money and deficiency judgment. An order of foreclosure
and judicial sale by itself, such as the one issued in Town‐
send’s case, is thus not a final judgment under 28 U.S.C.
§ 1291.
III
Although we do not have jurisdiction to hear Townsend’s
appeal under traditional finality doctrine, we still must ask
whether there is some other basis of appellate jurisdiction.
Three theories deserve a look, as our briefing order implied:
first, the possibility that the court’s order was final as a “sep‐
arate claim” under Federal Rule of Civil Procedure 54(b);
second, the possibility that this is in effect an injunction eli‐
gible for interlocutory appeal under 28 U.S.C. § 1292(a)(1);
and third, whether it may be immediately appealable under
the doctrine announced in Forgay v. Conrad, 47 U.S. (6 How.)
201 (1848). We address each of these questions in turn.
A
The district court here certified the judgment of foreclo‐
sure and sale as final and appealable under Federal Rule of
Civil Procedure 54(b). That does not dispose of the question,
however; this court must consider for itself whether the
judgment satisfies the requirements of that rule. Marseilles
Hydro Power, LLC v. Marseilles Land & Water Co., 518 F.3d 459,
464 (7th Cir. 2008); see also Wetzel, 424 U.S. at 740 (rejecting
Rule 54(b) certification). The operative language of Rule
54(b) is as follows: “When an action presents more than one
claim for relief … or when multiple parties are involved, the
12 No. 13‐1017
court may direct entry of a final judgment as to one or more,
but fewer than all, claims or parties only if the court express‐
ly determines that there is no just reason for delay.”
There are two problems with the district court’s Rule
54(b) certification. First, the district court’s judgment left no
claims unaddressed; any issues that may arise after this
judgment form part of the main claim, not an independent
one. By its terms, Rule 54(b) does not apply when there is no
separate claim remaining to be decided. See Wetzel, 424 U.S.
at 742–43. Second, Rule 54(b) requires an express determina‐
tion that there is no just reason for delay, and we find none
on the record. Even if there were multiple claims or multiple
parties, Rule 54(b) is unavailable without that certification.
See Constr. Indus. Ret. Fund of Rockford v. Kasper Trucking, Inc.,
10 F.3d 465, 467–68 (7th Cir. 1993).
B
The next possibility requires us to decide whether the or‐
der directing the judicial sale of the property amounts to an
injunction for purposes of 28 U.S.C. § 1292(a)(1). That statute
authorizes interlocutory appeals from orders “granting, con‐
tinuing, modifying, refusing or dissolving injunctions, or re‐
fusing to dissolve or modify injunctions.” We have taken
care to construe this provision narrowly to avoid opening a
floodgate to piecemeal appeals. Albert v. Trans Union Corp.,
346 F.3d 734, 737 (7th Cir. 2003); see also Tradesman Int’l, Inc.
v. Black, 724 F.3d 1004, 1011 (7th Cir. 2013). With that concern
in mind, we have declined to characterize a decree foreclos‐
ing a mortgage and ordering sale as an injunction within the
meaning of § 1292(a)(1). See United States v. Hansen, 795 F.2d
35, 38–39 (7th Cir. 1986). Though a decree of foreclosure is an
equitable remedy, we have made clear that “[n]ot every equi‐
No. 13‐1017 13
table order is an injunction for purposes of section
1292(a)(1),” and have concluded that foreclosure judgments
fall outside of § 1292(a)(1)’s limits. Id. While it is apparent
that foreclosure on a residence can eventually cause irrepa‐
rable harm, Illinois courts and federal courts both are em‐
powered to use stays pending appeal to manage the risk of
such harm by erroneous decisions. Compare Bullard, 135 S.
Ct. at 1695–96 (acknowledging that some bankruptcy con‐
firmation orders may have “immediate and irreversible ef‐
fects,” but nonetheless holding that an immediate appeal
was unavailable and pointing out that several mechanisms
to address such harm are available). We see no reason to de‐
part from Hansen’s holding and thus decline to exercise ju‐
risdiction to hear Townsend’s appeal under § 1292(a)(1).
C
We turn finally to the finality rule described in Forgay v.
Conrad. That case, whose facts starkly remind the reader that
times have changed, arose from a bankruptcy in Louisiana.
The debtor had deeded away real estate and slaves in New
Orleans, but the trial court had set aside those deeds as
fraudulent transfers. Most importantly for present purposes,
the trial court had then ordered that the real estate and
slaves be delivered immediately to the person we would
now call the trustee in bankruptcy. On appeal, the first issue
was whether the transfer order was appealable. In an opin‐
ion by Chief Justice Taney, the Supreme Court denied a mo‐
tion to dismiss the appeal. The Court held that the order was
appealable because the parties in current possession of the
real estate and slaves faced a threat of irreparable harm if an
immediate appeal were not allowed. Forgay, 47 U.S. (6 How.)
at 202–04.
14 No. 13‐1017
We have interpreted Forgay to allow immediate review of
an order “directing delivery of property where such an order
would subject the losing party to irreparable harm.” United
States v. Davenport, 106 F.3d 1333, 1335 (7th Cir. 1997). The
irreparable harm requirement avoids an unduly broad read‐
ing of Forgay under which “any order requiring immediate
payment also is immediately appealable.” Cleveland Hair
Clinic, Inc. v. Puig, 104 F.3d 123, 126 (7th Cir. 1997).
When it comes to the forced sale of a residence, we can
assume that the potential for irreparable harm is great. See
Davenport, 106 F.3d at 1335. But under the Forgay doctrine,
the issue for us is whether and when Townsend would face an
imminent threat of irreparable harm if the judgment order‐
ing foreclosure and judicial sale were not appealable. That
question calls for a close examination of Illinois law and the
procedures the district court would use to carry out the fore‐
closure and sale. See Aurora Loan Servs., Inc. v. Craddieth,
442 F.3d 1018, 1026 (7th Cir. 2006) (looking to state law set‐
tling title to property to determine when purchaser rights
irreversibly attached); see also FED. R. CIV. P. 69 (borrowing
state procedures to execute federal court judgments).
Under Illinois law, the judgment of foreclosure and judi‐
cial sale posed no imminent threat of irreparable harm to
Townsend. His interests are protected in several ways. First,
a mortgagor may be able to take advantage of the redemp‐
tion and reinstatement period before the judicial sale. See
Kling v. Ghilarducci, 121 N.E.2d 752, 756 (Ill. 1954). As we al‐
ready have discussed, the sale cannot be conducted until this
time has run. See 735 ILCS 5/15‐1507(b).
After the judicial sale, the mortgagor is a big step closer
to loss of his residence, but still not there. The interests in the
No. 13‐1017 15
property of all persons made party to the foreclosure “shall
be terminated by the judicial sale of the real estate, pursuant
to a judgment of foreclosure, provided the sale is con‐
firmed.” 735 ILCS 5/15‐1404; see also McCluskey, 999 N.E.2d
at 330 (noting that it is the confirmation of sale that “divests
the borrower of her property rights”). Immediately after the
judicial sale and payment in full of the amount bid, the pur‐
chaser receives only a “certificate of sale.” See 735 ILCS 5/15‐
1507(f). (In residential foreclosures the defaulting mortgag‐
or‐owner has a special, final thirty‐day period for redemp‐
tion when “the purchaser at the sale was a mortgagee who
was a party to the foreclosure,” i.e., when a lender purchases
the property, typically with a credit bid, for less than the
amount needed to redeem. See 735 ILCS 5/15‐1604(a).)
The transfer of rights memorialized by the certificate of
sale becomes permanent only if the judicial sale is con‐
firmed. Only after confirmation does the purchaser obtain a
deed. 735 ILCS 5/15‐1509(a). The deed passes title to the pur‐
chaser, 735 ILCS 5/15‐1509(b), and serves as “an entire bar of
… all claims of parties to the foreclosure,” 735 ILCS 5/15‐
1509(c). Yet even then a mortgagor can delay the permanent
transfer of title to the purchaser by obtaining a stay pending
appeal of the order confirming sale. See ILL. SUP. CT. R. 305(k)
(under substantive state law, non‐party purchasers gain
property rights that are not impaired by reversal on appeal
unless the sale is stayed); Aurora, 442 F.3d at 1026–27 (apply‐
ing Illinois law and finding that “in the absence of a stay, a
sale of real property to a third party bars an appeal from the
judgment authorizing the sale”); Hansen, 795 F.2d at 39 (sug‐
gesting that defendants could avoid irreparable harm from
sale by seeking a stay of the decree of sale); FDIC v. Meyer,
781 F.2d 1260, 1263 (7th Cir. 1986) (in absence of stay, sale to
16 No. 13‐1017
good faith purchaser moots appeal); Horvath v. Loesch,
410 N.E.2d 154, 158 (Ill. App. Ct. 1980). So long as a stay is in
place, a purchaser at a foreclosure sale is obliged to return
the property if the judgment of foreclosure is reversed on
appeal. See Wash. Mut. Bank, F.A. v. Archer Bank, 895 N.E.2d
677, 680 (Ill. App. Ct. 2008) (permitting review of “all earlier
nonfinal orders that produced the final judgment” embodied
in the orders confirming the sale).
Thus, under Illinois mortgage foreclosure law, a mort‐
gagor‐owner who is residing in the property and taking care
of it should not face the kind of immediate irreparable harm
required by Forgay until there is time to file an appeal and to
seek a stay of the final order confirming the judicial sale.
Such an owner will ordinarily be entitled to retain posses‐
sion of the property until thirty days after confirmation of
the foreclosure sale. 735 ILCS 5/15‐1701(b)(1) & (c). (The
statute also provides for exceptions when needed to protect
the interests of the lender.) Under the Forgay doctrine, the
issue is whether an immediate appeal is needed to prevent
irreparable harm resulting from an immediate transfer of
possession of the property. Illinois law provides a number of
protections against irreparable harm, even though orders of
foreclosure and judicial sale are not immediately appealable
in state practice. Similarly, federal courts at every level have
the authority to stay the effect of a judgment pending ap‐
peal, see FED. R. CIV. P. 62, and so there is no need here to in‐
voke the Forgay doctrine to allow an immediate appeal.
In light of this conclusion, we have no reason to reach the
question whether the Supreme Court’s decision in Mohawk
Industries, Inc. v. Carpenter, 558 U.S. 100 (2009), overruled the
Forgay doctrine. While there is some tension between the
No. 13‐1017 17
Forgay doctrine and Mohawk Industries, see 558 U.S. at 106,
and that tension has been reinforced by Bullard, the Court
has not told us that Forgay has been overruled, and only it
has the prerogative of overruling its own decisions. E.g.,
Nat’l Rifle Ass’n of Am., Inc. v. City of Chicago, 567 F.3d 856,
857–58 (7th Cir. 2009), rev’d sub nom. McDonald v. City of Chi‐
cago, 561 U.S. 742 (2010), quoting Rodriguez de Quijas v. Shear‐
son/Am. Express, Inc., 490 U.S. 477, 484 (1989).
IV
For all these reasons, we conclude that we do not have ju‐
risdiction to hear this appeal, which is therefore DISMISSED.
Because the district court’s entry of the Rule 54(b) judgment
compelled Townsend to appeal when he did, however, we
order that the costs on appeal will be assessed against HSBC.
See FED. R. APP. P. 39(a).
18 No. 13‐1017
HAMILTON, Circuit Judge, dissenting. I view the district
court’s judgment of foreclosure as final under 28 U.S.C.
§ 1291. Rather than dismiss the appeal, I would affirm on the
merits. Under long‐established finality principles, a foreclo‐
sure judgment is final if it (a) settles the merits and the total
amount of the debt, (b) identifies the property to be sold to
satisfy the judgment, and (c) orders the priority of compet‐
ing claims to the sale proceeds. See, e.g., Whiting v. Bank of
the United States, 38 U.S. (13 Pet.) 6, 15 (1839), and cases fol‐
lowing it.
The judgment of foreclosure here does all of those things.
All that remains in this litigation is executing that judgment
by judicial sale of the property securing the debt and dis‐
tributing the sale proceeds. For two centuries American ap‐
pellate practice has distinguished between a judgment on
the merits and later matters of execution, holding that open
issues involving execution do not defeat finality of the un‐
derlying judgment on the merits. That settled approach to
finality works. We should not upset it with the novel ap‐
proach of uncertain scope adopted by the majority.
I agree with my colleagues, though, that Federal Rule of
Civil Procedure 54(b), 28 U.S.C. § 1292, and the doctrine an‐
nounced in Forgay v. Conrad, 47 U.S. (6 How.) 201 (1848), do
not authorize this appeal. Our disagreement is about wheth‐
er the need to execute the judgment of foreclosure by carry‐
ing out the court‐ordered sale prevents an immediate appeal
of the judgment of foreclosure under traditional § 1291 prin‐
ciples.
Part I of this opinion explains the general rule: a judg‐
ment resolving all claims on the merits is final and appeal‐
able even if it remains to be executed with the court’s assis‐
No. 13‐1017 19
tance. That remains true even if a second appeal regarding
the execution is possible. One specialized application of that
general rule is that a judgment of foreclosure that resolves
the amount of the debt and orders sale of the mortgaged
property is a final judgment. The Supreme Court has fol‐
lowed this approach to mortgage foreclosures since the ear‐
liest days of our Republic. Prior decisions of this and other
circuits have long followed this approach.
With fair warning to readers, Part II digs into the weeds
of the execution process under Illinois foreclosure law that
have persuaded my colleagues that this judgment of foreclo‐
sure is not yet final. If we look past the jargon of mortgage
cases, we see that the statutory provisions for redemption
and reinstatement are merely specialized instances of the
right any defendant has to satisfy a judgment voluntarily be‐
fore it is executed. Potential disputes about the fairness of a
judicial sale do not undermine finality here any more than
do analogous disputes in other proceedings to execute
judgments. The routine arithmetic needed to calculate the
amount of a deficiency judgment or post‐judgment interest
also does not undermine finality when those calculations fol‐
low mechanically from a judgment that determines the total
amount owed and the priorities of creditors.
Finally, Part III explains briefly why the district court did
not err by granting summary judgment in favor of HSBC on
the merits of its claim against appellant Townsend, who de‐
faulted on his residential mortgage loan.
Before diving into the details, though, I’ll try to explain
why this issue of appellate jurisdiction is worth an admitted‐
ly lengthy dissent. What difference does it make whether a
20 No. 13‐1017
borrower in Townsend’s position must wait longer to appeal
as long as he is able to appeal in the end?
First, the majority’s novel decision upends about two cen‐
turies of federal precedent and practice on finality for pur‐
poses of appeal. Courts applying § 1291 and its cousins have
recognized the difference between a judgment on the merits
and the decisions needed to execute that judgment. The dis‐
tinction between these phases of the litigation is established
and familiar. It works.
The majority’s decision adopts an uncertain standard that
collapses that distinction, at least for mortgage foreclosures.
In the majority’s view, it is not enough for the merits of a
dispute to be finally resolved. The majority also requires that
all issues relating to execution be resolved in the district
court before the underlying judgment on the merits is ap‐
pealable. This reasoning either (a) commits our circuit to us‐
ing different finality rules when we consider mortgage fore‐
closures, or (b) signals that appeals from other judgments
that have also long been considered final will need a fresh
look.
In either case, the majority’s approach will impose confu‐
sion, uncertainty, and expense where the law is not broken
and needs no fixing. See Republic Natural Gas Co. v. Oklahoma,
334 U.S. 62, 69 (1948) (“The considerations that determine
finality are not abstractions but have reference to very real
interests—not merely those of the immediate parties, but
more particularly, those that pertain to the smooth function‐
ing of our judicial system.”). Even if future cases limit the
majority’s reasoning to mortgage cases, the practical effect
will still be substantial. Federal district courts handle thou‐
sands of mortgage foreclosure cases every year, roughly ten
No. 13‐1017 21
per district judge per year. See Judicial Business of the Unit‐
ed States Courts, Annual Report of the Director tbl. C‐2
(2014).
Adding to the uncertainty, the majority bases its decision
on a novel view of substantive Illinois law. When a valid
foreclosure sale leaves a deficiency in the amount owed on
the judgment, Illinois law entitles the lender to a judgment
against the borrower personally for the deficiency. Yet the
majority finds (ante at 8–9) that Illinois judges have discre‐
tion to decline to award deficiency judgments against bor‐
rowers when a foreclosure sale fails to cover the total
amount of the debt. As explained below in Part II–D, I be‐
lieve that view of Illinois law is mistaken and will come as
quite a surprise to the Illinois bar and bench.
I would be less troubled by the majority’s approach if it
minimized the uncertainty by announcing a bright‐line rule
on the finality of foreclosure judgments. See Budinich v. Bec‐
ton Dickinson & Co., 486 U.S. 196, 202 (1988) (stressing the
importance of adopting “bright‐line” appellate jurisdiction
rules to ensure uniformity and predictability); Kennedy v.
Wright, 851 F.2d 963, 967 (7th Cir. 1988) (citing Budinich and
collecting cases making same point in our circuit); Exchange
Nat’l Bank of Chicago v. Daniels, 763 F.2d 286, 292 (7th Cir.
1985) (“The first characteristic of a good jurisdictional rule is
predictability and uniform application.”). No such clear rule
can be divined from the piecemeal approach adopted here.
The majority opinion does not tell us what to do in a case
presenting only one or two of the three issues it thinks defeat
finality.
Second, the different approaches to appellate jurisdiction
have significant practical and economic consequences for all
22 No. 13‐1017
parties in the foreclosure litigation. Let’s assume that a bor‐
rower has a good defense on the merits but loses in the trial
court. Under the majority’s approach, she cannot obtain ap‐
pellate review of the judgment until after her home has been
sold at auction, after the trial court has confirmed that sale,
and after a buyer has deposited cash and stands ready to
take possession. To preserve her right to appeal, the borrow‐
er with the good defense must ask for and obtain a stay
pending appeal. See Ill. Sup. Ct. R. 305(k) (under substantive
state law, non‐party purchasers gain property rights that are
not impaired by reversal on appeal unless the sale is stayed);
Horvath v. Loesch, 410 N.E.2d 154, 158 (Ill. App. 1980); Aurora
Loan Services, Inc. v. Craddieth, 442 F.3d 1018, 1026–27 (7th Cir.
2006) (under Illinois law, “in the absence of a stay, a sale of
real property to a third party bars an appeal from the judg‐
ment authorizing the sale”). The possibility of such stays is
enough to avoid application of the Forgay doctrine, as the
majority explains, but it remains to be seen whether district
courts and our court will grant such stays routinely. I hope
they will, but it is not a foregone conclusion.
Third, even if we assume that the harshest effects of the
majority’s approach on borrowers will be mitigated by rou‐
tine stays pending appeal, I suspect the economic result will
be negative for both borrowers and lenders. Consider the
bidding behavior of outside buyers at auctions that take
place at two different stages: (a) after the merits of the fore‐
closure have been settled with a final judgment and the con‐
clusion of any appeal; or (b) while the merits of the foreclo‐
sure are still subject to appeal. Basic economic principles
suggest that, all other things being equal, a buyer should be
willing to pay more at stage (a) than at (b). The buyer at
stage (b) may need to keep the bid open for months or even
No. 13‐1017 23
years, sharply limiting other uses of the money in the mean‐
time. The result should be lower bid prices in auctions, to the
detriment of both lenders and borrowers. See United States v.
Buchman, 646 F.3d 409, 410 (7th Cir. 2011) (“If buyers believe
that the parcels they acquire at auction can be snatched back
whenever they have made a good deal, they will pay less at
foreclosure sales—and borrowers such as Buchman will be
worse off as a result.”); Aurora Loan Services, 442 F.3d at 1028,
citing Michael H. Schill, An Economic Analysis of Mortgagor
Protection Laws, 77 Va. L. Rev. 489, 534 (1991). And where a
foreclosure is set aside on the merits after a court‐ordered
sale, the expense and effort of the sale and its confirmation
will all be for naught. I turn now to the details of the legal
analysis.
I. Merits v. Execution: Finality Doctrine Under § 1291
Section 1291 provides that the “courts of appeals … shall
have jurisdiction of appeals from all final decisions of the
district courts of the United States.” The Supreme Court has
defined a final decision in general terms as “one that ends
the litigation on the merits and leaves nothing for the court
to do but execute the judgment.” Ray Haluch Gravel Co. v.
Central Pension Fund of Int’l Union of Operating Engineers and
Participating Employers, 571 U.S. —, 134 S. Ct. 773, 779 (2014),
citing Caitlin v. United States, 324 U.S. 229, 233 (1945). The
judgment of foreclosure here ended this litigation on the
merits and left nothing for the court to do but execute the
judgment.
Finality in a mortgage foreclosure case is best understood
as a specialized application of more general rules of finality
that apply in the simpler case of a suit on an unsecured debt.
See In re Sorenson, 77 F.2d 166, 167 (7th Cir. 1935) (making
24 No. 13‐1017
this comparison and holding that judgment foreclosing
mortgage and ordering sale was “final decree” that barred
bankruptcy injunction).
Pared down to the basics: Suppose P sues D for breach of
a promissory note. P wins a judgment ordering D to pay X
dollars to P. That judgment is final and appealable. It is final
and appealable even though D may choose simply to pay the
judgment, and even though, if D does not pay, P may need
the court’s help to identify D’s property and then to seize
and sell it to satisfy the judgment. The judgment is final even
if we do not yet know exactly how the judgment will be exe‐
cuted. See Fed. R. Civ. P., Forms 70 & 71; JPMorgan Chase
Bank, N.A. v. Asia Pulp & Paper Co., Ltd., 707 F.3d 853, 857,
861–62, 867–68 (7th Cir. 2013) (resolving dispute about mer‐
its of claims on promissory note even though district court in
post‐judgment proceedings had issued later asset discovery
order that was itself not immediately appealable); see gener‐
ally 15B Wright & Miller, Federal Practice and Procedure
§ 3916 (2d ed.) (discussing appellate jurisdiction over post‐
judgment orders).
Now suppose the promissory note is secured by collat‐
eral. The key difference is that the lender has laid the
groundwork for easier, more streamlined execution of any
judgment needed to collect the debt. There is no need to
search out the debtor’s property. By agreement, the property
securing payment has been identified in advance. By the
same agreement, the lender has also been granted a priority
for its claim over those of other creditors who might want to
seize the same property to pay off their loans to the same
borrower.
No. 13‐1017 25
With a secured loan, the fact that the property available
for execution has already been identified does not prevent
the underlying judgment on the merits (“D shall pay P the
sum of X Dollars”) from being final and appealable. Nor
does it matter that the judgment in such cases stays execu‐
tion for a limited time to give the defendant a chance to
avoid the sale by making the plaintiff whole through rein‐
statement, redemption, or a settlement. Cf. Fed. R. Civ. P.
62(a) (staying execution of judgments for 14 days, without
delaying time for appeal); Soo Line R. Co. v. Escanaba & Lake
Superior R. Co., 840 F.2d 546, 550 (7th Cir. 1988) (judgment
awarding a specified amount of money was final even
though plaintiff could not demand immediate payment and
payment was contingent on arbitrator decision).
Over more than two centuries, the Supreme Court has
applied these basic principles to hold judgments foreclosing
mortgages and ordering the sale of the property securing the
loans are final and appealable before a judicial sale and its
confirmation take place. In Whiting v. Bank of United States, 38
U.S. (13 Pet.) 6, 15 (1839), a mortgage had been foreclosed
and the property had been sold. Heirs of the borrower then
sought to set aside both the foreclosure and the sale. Writing
for the Court, Justice Story considered the question of finali‐
ty and said that the issue depended on
whether the decree of foreclosure and sale is to
be considered as the final decree in the sense of
a Court of Equity, and the proceedings on that
decree a mere mode of enforcing the rights of
the creditor, and for the benefit of the debtor;
or whether the decree is to be deemed final on‐
ly after the return and confirmation of the sale
26 No. 13‐1017
by a decretal order of the Court. We are of opin‐
ion that the former is the true view of the matter.
The original decree of foreclosure and sale was final
upon the merits of the controversy.
38 U.S. at 15 (emphasis added).
The Court had applied the same rule long before Whiting,
holding simply that “a decree for a sale under a mortgage, is
such a final decree as may be appealed from.” Ray v. Law, 7
U.S. (3 Cranch) 179, 180 (1805). The Court has repeated the
point many times since. E.g., Grant v. Phoenix Mutual Life Ins.
Co., 106 U.S. 429, 431 (1882) (“[A] decree of sale in a foreclo‐
sure suit, which settles all the rights of the parties and leaves
nothing to be done but to make the sale and pay out the pro‐
ceeds, is a final decree for the purposes of an appeal.”);
McGourkey v. Toledo & Ohio Cent. Ry. Co., 146 U.S. 536, 545
(1892) (“[I]t is clear that a decree is final, though the case be
referred to a master to execute the decree by a sale of proper‐
ty or otherwise, as in the case of the foreclosure of a mort‐
gage.”).
Thus, the general rule in American law has long been
that once a judgment of foreclosure and sale is entered, it is
final because all that remains to be done is executing the
judgment to enforce the rights and obligations that have
been adjudicated.
Now it’s true that some foreclosure orders are not final
and appealable, but that’s because they leave undecided
questions going to the merits of the dispute. In essence,
those judgments are not final because they leave the X in “D
shall pay P the sum of X Dollars” undefined or subject to
change.
No. 13‐1017 27
For example, even if liability is decided, a foreclosure or‐
der is not truly final if it “leaves the amount due upon the
debt to be determined, and the property to be sold ascer‐
tained and defined.” McGourkey, 146 U.S. at 545–46, 550 (or‐
der not final because it directed master to determine rents,
profits, and damages to railroad’s rolling stock, even though
it also ordered turnover of property); see also Grant, 106 U.S.
at 431 (order not final because it referred case to an auditor
to “ascertain the amount due upon the debt, the amount due
certain judgment and lien creditors, the existence and priori‐
ties of liens, and the claims for taxes”); North Carolina R. Co.
v. Swasey, 90 U.S. (23 Wall.) 405, 409–10 (1874) (order not fi‐
nal when the amount of the debt and property to be sold
were not specified). So too when the order “merely deter‐
mines the validity of the mortgage, and, without ordering a
sale, directs the case to stand continued for further decree
upon the coming in of the master’s report.” McGourkey, 146
U.S. at 545; see also Burlington, C.R. & N. Ry. Co. v. Simmons,
123 U.S. 52, 54 (1887) (order not final where validity of lien
on mortgage was established but amounts due to parties had
not been fixed and court expected further action before it
could carry decree into effect).
If the majority’s view in this case were correct, all of these
cited opinions should have been much shorter: the appeals
should have been dismissed simply because the foreclosure
sales had not yet been carried out and confirmed. Instead,
though, the Court focused on the details of the undecided
merits issues. These examples are also consistent with the
more general rule that a judgment is not final where it estab‐
lishes the defendant’s liability but the amount of damages
remains undecided. See, e.g., Liberty Mutual Ins. Co. v. Wetzel,
424 U.S. 737, 742 (1976).
28 No. 13‐1017
These principles are so well established that case law ad‐
dressing the finality problem is relatively scarce, but the
available cases show that these principles have been healthy
until now. We applied them in United States v. Davenport, 106
F.3d 1333 (7th Cir. 1997), where we held that an order of
foreclosure and sale was not immediately appealable under
traditional finality doctrine. The only reason for that conclu‐
sion, though, was that the district court had reserved judg‐
ment on some merits questions: whether tax fraud penalties
were appropriate and whether a co‐defendant would have
any right to the proceeds of the sale. Id. at 1334–35. Under
our reasoning in Davenport, an ordinary order of foreclosure
and sale like the order here would have been final. (In Dav‐
enport, we also found we had jurisdiction under Forgay v.
Conrad, 47 U.S. (6 How.) 201 (1848), for reasons not applica‐
ble here.)
We applied these same principles in In re Sorenson, 77
F.2d 166 (7th Cir. 1935), where a bankruptcy court’s power to
enjoin a foreclosure proceeding depended on whether a de‐
cree of foreclosure ordering a sale was a “final decree.” In
reasoning directly applicable here, we held that the foreclo‐
sure decree was final:
In a foreclosure proceeding a decree which def‐
initely fixes and adjudicates, as between the
parties to the litigation, all issues relating to
their mutual rights and obligations is, to all in‐
tents and purposes, a final decree. The usual
decree of foreclosure does this. Those matters
incident to the execution of the decree—the sale, re‐
port of sale, deficiency decree, redemption, issuance
and recording of deed, and the like—are to the de‐
No. 13‐1017 29
cree of foreclosure what at law the execution, sale,
redemption, and the like are to the final judgment to
which they are incidental. A decree or judgment is
none the less final because of the things thereafter to
be done to give it effect.
77 F.2d at 167 (emphasis added). We followed the same ap‐
proach in Central Trust Co. of New York v. Peoria, Decatur &
Evansville Ry. Co., 118 F. 30 (7th Cir. 1902), where parties ap‐
pealed an order confirming a foreclosure sale. They tried in
part to challenge the merits of the underlying judgment of
foreclosure. We said the merits challenge came too late, treat‐
ing the issue as needing neither citation nor explanation:
“The question cannot be raised on objection to the sale.” Id.
at 32.
We have not been alone in applying the Supreme Court
precedents to find that a foreclosure order is final so long as
it conclusively establishes the extent of the defendant’s liabil‐
ity for the defaulted loan and identifies the property to be
sold. Both the Ninth and Fifth Circuits have read Ray and
Whiting and the cases that followed to establish exactly this
rule. See Citicorp Real Estate, Inc. v. Smith, 155 F.3d 1097, 1101
(9th Cir. 1998) (order meeting these conditions was final
even though the judgment left “the actual amount of the de‐
ficiency judgment to be determined at a fair value hearing
following the judicial foreclosure sale[]”); Citibank, N.A. v.
Data Lease Financial Corp., 645 F.2d 333, 337–38 (5th Cir. 1981)
(order meeting these conditions had been final and therefore
was unreviewable in later appeal of order confirming sale).
Under these principles and precedents, the judgment of
foreclosure here is not incomplete or uncertain in any way
that could defeat finality. It resolves the merits of the foreclo‐
30 No. 13‐1017
sure dispute. It leaves nothing to do but execute the judg‐
ment by carrying out the sale and distributing the proceeds.
The judgment establishes that Townsend is liable to HSBC
for default under the note. It specifies the damages he must
pay as a result of his default—$143,569.65—which includes
the principal balance and specified amounts of accrued pre‐
judgment interest and attorney fees. The judgment also or‐
ders that post‐judgment interest accrues at the statutory rate
until the judgment is satisfied through sale of the property
or through reinstatement or redemption. It also resolves the
rights of all lienholders claiming an interest in the property.
It fixes the priority of interests by specifying that MERS’s
rights under a second mortgage are inferior to HSBC’s, and it
orders that proceeds will be distributed to both HSBC and
MERS in the manner specified by 735 ILCS 5/15‐1512.
The judgment also sets out the ways it can be executed. It
specifies when the reinstatement and redemption periods
run. In the event that Townsend would not pay the amounts
needed to reinstate or redeem (and he did not), it makes
clear that the judgment will be satisfied through sale of
Townsend’s home. The judgment identifies the property to
be sold and explains the procedures by which the sale officer
(appointed by a separate order that same day) must conduct
the sale. The judgment also provides that the court must en‐
ter a deficiency judgment against Townsend if “the proceeds
of the sale are not sufficient to satisfy those sums due the
Plaintiff.”1
1 The judgment also states that the court retains jurisdiction over the
parties and subject matter “for the purpose of enforcing this Judgment or
vacating said Judgment.” That is not the sort of “reservation” of jurisdic‐
tion that defeats finality. A court in a civil case routinely retains jurisdic‐
No. 13‐1017 31
In other words, the judgment resolves the merits of
HSBC’s request for relief and can be executed mechanically
following the sale. That makes it final.
The approach I would follow raises one pragmatic con‐
sideration. Illinois courts now apply the majority’s approach
in foreclosure appeals, see EMC Mortgage Corp. v. Kemp, 982
N.E.2d 152, 154 (Ill. 2012), though that has not always been
true. See In re Sorenson, 77 F.2d at 168, quoting Kirby v.
Runals, 29 N.E. 697, 698 (Ill. 1892) (decree foreclosing mort‐
gage and decreeing sale of mortgage premises is final decree
even though master is ordered to make report of sale); Chi‐
cago & N.W. Ry. Co. v. City of Chi., 35 N.E. 881, 883 (Ill. 1893),
citing Whiting, 38 U.S. (13 Pet.) 6 (1839), and Grant, 106 U.S.
429 (1882).
Under either approach to finality, however, some incon‐
sistency between federal and state courts is unavoidable. The
two other states in our circuit follow the approach I would
continue under the federal precedents. See Anchor Savings &
Loan Ass’n v. Coyle, 435 N.W.2d 727, 729–30 (Wis. 1989)
(judgment of foreclosure and sale was immediately appeal‐
able despite separate need to conduct and confirm sale and
compute deficiency judgment); Bahar v. Tadros, 123 N.E.2d
189, 189–90 (Ind. 1954) (judgment of foreclosure was imme‐
diately appealable). In any event, the question of finality in
federal courts is a question of federal procedural law, Budi‐
nich, 486 U.S. at 198–99, and our job is to follow throughout
the circuit what has been until now a clear rule.
tion to enforce its judgment and can vacate its judgment under Federal
Rule of Civil Procedure 60(b) or state analogs.
32 No. 13‐1017
II. Executing the Judgment—The Open Issues
The majority does not identify any open issue regarding
the merits of the district court’s judgment. The majority fo‐
cuses instead on three open issues regarding execution:
(1) the mortgagor’s ability to redeem or reinstate the mort‐
gage before the judicial sale; (2) the need to confirm any sale
in a separate proceeding; and (3) the inability to determine
the amounts of any deficiency judgment or interest until the
fairness of the sale is evaluated.
None of these matters should prevent us from treating
the judgment as final. They do not threaten the decisions
that Townsend is in default and that HSBC is entitled to a
specified amount of compensation, whether through sale of
the home or other cash payment. No matter how the majori‐
ty’s issues turn out, all that can happen now is that HSBC’s
judgment will be either satisfied or abandoned. I explain
first some general principles regarding execution of a judg‐
ment before addressing the specific issues that trouble the
majority.
A. Executing a Judgment—General Principles
The majority concludes that the merits of a foreclosure
action are not resolved until the trial court finds that the
mortgaged property was properly sold and the amount of a
deficiency judgment is set. The majority focuses on the un‐
certainty as to when and exactly how HSBC will collect its
judgment against Townsend. The forced sale of a home is the
most dramatic part of the typical foreclosure suit, but it’s
important to remember that selling the home is at bottom
just one way to execute a judgment for failure to pay a debt
as promised.
No. 13‐1017 33
There is of course plenty of room for complication and
controversy in executing a judgment. See, e.g., Mortgage Elec‐
tronic Registration Systems, Inc. v. Estrella, 390 F.3d 522, 523
(7th Cir. 2004) (recognizing that district court can invalidate
foreclosure sale when it was not conducted properly). The
execution process here is no exception. The judgment orders
Townsend to pay HSBC $143,569.65, plus post‐judgment in‐
terest. There are at least three ways Townsend could satisfy
that judgment against him and make HSBC whole. First, he
could just pay the money owed in cash by exercising his
statutory redemption right, which amounts to a post‐
judgment settlement that the statute requires the creditor to
accept. Second, he could exercise his statutory right of rein‐
statement, another form of statutory settlement that requires
him to cure his defaults. Third and most likely, if Townsend
cannot come up with the cash for either of the first two op‐
tions, the court will execute the judgment by carrying out
the sale of the mortgaged property and issuing a personal
deficiency judgment for any balance still owing.
Having more than one choice for how to satisfy a judg‐
ment is commonplace. It does not undermine the finality of
that judgment. “A question remaining to be decided after an
order ending litigation on the merits does not prevent finali‐
ty if its resolution will not alter the order or moot or revise
decisions embodied in the order.” See Budinich v. Becton
Dickinson & Co., 486 U.S. 196, 199 (1988); see also Parks v.
Pavkovic, 753 F.2d 1397, 1401 (7th Cir. 1985) (allowing imme‐
diate appeal when “only a ‘ministerial’ task remains for the
district court to perform”).
Deciding any of the questions remaining here, which
deal with exactly how Townsend and/or the court will satis‐
34 No. 13‐1017
fy the judgment of default against him, would not risk affect‐
ing the decision on the merits—that Townsend owes HSBC
$143,569.65 plus interest and HSBC has first dibs on his
home. To be sure, resolving some of these issues could affect
whether Townsend needs to endure a forced sale of his
home. But under the judgment of foreclosure, he can avoid
the sale only if (1) he complies with the judgment by re‐
deeming or reinstating his mortgage, (2) HSBC gives up on
executing the judgment, or (3) the parties reach a private set‐
tlement.
The remaining post‐judgment issues here are typical of a
post‐judgment proceeding that “must be viewed as a sepa‐
rate lawsuit from the action which produced the underlying
judgment” and is “final … if it disposes completely of the
issues raised” in the post‐judgment proceeding. In re Joint
Eastern & Southern Dists. Asbestos Litig., 22 F.3d 755, 760 (7th
Cir. 1994) (order authorizing discovery in aid of execution of
judgment not appealable until end of case); see also Solis v.
Current Development Corp., 557 F.3d 772, 775–76 (7th Cir.
2009) (order in a post‐judgment proceeding is treated like an
order in “a freestanding lawsuit” and is final and appealable
only if it resolves all issues in that proceeding); King v. Ioniza‐
tion Int’l, Inc., 825 F.2d 1180, 1184 (7th Cir. 1987) (post‐
judgment proceeding treated “as a separate lawsuit;” order
in post‐judgment proceeding fixing priorities of competing
liens was final and appealable).
As a general rule, a losing party may appeal from a final
judgment determining the merits and may appeal separately
from a later order that concludes a post‐judgment proceed‐
ing to execute the underlying judgment. See Resolution Trust
Corp. v. Ruggiero, 994 F.2d 1221, 1223–25 (7th Cir. 1993);
No. 13‐1017 35
EEOC v. Gurnee Inns, Inc., 956 F.2d 146, 147–48 (7th Cir.
1992).
In mortgage foreclosure cases, in particular, courts have
allowed separate appeals of the judgment of foreclosure and
the order confirming the sale. See Leadville Coal Co. v. McCre‐
ery, 141 U.S. 475, 478–79 (1891) (“[W]e cannot fail to observe
that the main scope and purpose of this appeal seem to be to
relitigate questions fully determined by the final decree ap‐
pealed from and affirmed.”); Citibank, N.A. v. Data Lease Fi‐
nancial Corp., 645 F.2d 333, 337–38 (5th Cir. 1981) (explaining
that separate appeals may be taken from both the order di‐
recting foreclosure and sale and the order confirming sale).
In such cases, each appeal deals with quite different is‐
sues. An appeal on the merits can challenge the validity of
the debt, the finding of breach, and the amount owed. A later
appeal of an order confirming a sale can challenge whether
the sale was actually proper. There is little threat of overlap.
In fact, the Fifth Circuit requires parties to appeal separately
the judgment of foreclosure and the subsequent order con‐
firming the sale. In the Fifth Circuit, which relied on the Su‐
preme Court cases and one Seventh Circuit decision cited
above, a party who follows the majority’s course, appealing
only after confirmation of a sale, is actually barred from chal‐
lenging the merits of the judgment of foreclosure. See Citi‐
bank, 645 F.2d at 338; see also Central Trust Co. of New York v.
Peoria, Decatur & Evansville, Ry. Co., 118 F. 30, 32 (7th Cir.
1902) (appeal from order confirming sale could not challenge
merits of underlying foreclosure).
This reasoning is consistent with our decision in MERS v.
Estrella, which held that an order denying confirmation to a
judicial sale is not a final decision when the district court or‐
36 No. 13‐1017
ders another sale. 390 F.3d at 523–24; see also Levin v. Baum,
513 F.2d 92, 94 (7th Cir. 1975) (Stevens, J.) (order vacating
prior confirmation of sale and ordering new sale was not
appealable). Such an order does not end the “separate law‐
suit” in the post‐judgment proceeding and thus cannot be
appealed immediately. But that does nothing to undermine
the finality of the earlier judgment.
With these principles in mind, I turn to the specific issues
that have persuaded the majority that we do not yet have a
final judgment here. The specialized vocabulary of mortgage
foreclosure should not distract us from the essential sub‐
stance of the issues. These possible post‐judgment issues
pose no greater threat to finality than others that do not de‐
feat the finality of judgments on the merits.
B. Redemption and Reinstatement Practice
The majority first contends the judgment here is not final
because there is a chance the sale will never take place. Illi‐
nois law and the terms of this judgment allowed Townsend
time to reinstate or redeem his mortgage before a sale could
take place. The statutory options of reinstatement and re‐
demption should not defeat finality. They merely spell out
the terms of a post‐judgment settlement the plaintiff is re‐
quired to accept. By paying the amount of the judgment, the
defendant avoids the sale and satisfies the judgment, just as
any other losing defendant may: by paying the plaintiff the
amount of the judgment.
For reinstatement, the defaulting borrower must cure the
default. That requires paying all amounts due under the
note (such as accrued interest, late fees, attorney fees) except
the remaining principal. 735 ILCS 5/15‐1602. The effect is to
No. 13‐1017 37
cure prior breaches, to make the lender whole, and to rein‐
state the mortgage as if the default had not occurred. Re‐
demption, on the other hand, requires payment of all princi‐
pal and interest due as of the date of the judgment (which
can include the entire principal, accelerated by the default),
as well as the lender’s costs and fees and interest. 5/15‐
1603(d). The effect is to make the lender whole, satisfying the
note and leaving the lender with no further interest in the
property. Illinois law expresses a preference for resolving
mortgage disputes through redemption and reinstatement as
opposed to sale. A foreclosure sale cannot occur until the
time limits for both have expired. 5/15‐1507(b).
These rights are far from new, so it’s hard to see why
their existence should only now be discovered to change our
jurisdictional calculus. We reasoned in In re Sorenson, 77 F.2d
166, 167 (7th Cir. 1935), for example, that redemption was
among the matters incident to the execution. The possibility
of redemption did not defeat finality of a judgment of fore‐
closure.
Given the limited financial resources of most defaulting
borrowers, these statutory rights are not exercised often.
They usually serve only to delay the sale and thus the execu‐
tion of the already‐final judgment. See Michael H. Schill, An
Economic Analysis of Mortgagor Protection Laws, 77 Va. L. Rev.
489, 496–97 (1991); George M. Platt, Deficiency Judgments in
Oregon Loans Secured by Land: Growing Disparity Among Func‐
tional Equivalents, 23 Willamette L. Rev. 37, 49 (1987). As a
matter of law, of course, we must allow for these possibilities
in each case. Nevertheless, as far as I know, the always‐
present possibility that the defendant might moot an appeal
by paying the amount due on the judgment has never before
38 No. 13‐1017
been deemed to destroy the finality of the underlying judg‐
ment.
The majority disagrees, relying on general language in
the Supreme Court’s decision in Budinich. Ante at 7. But Bu‐
dinich did not say that the mere prospect that a party might
moot a case defeats finality of an otherwise final judgment.
The Supreme Court said: “A question remaining to be decid‐
ed after an order ending the litigation on the merits does not
prevent finality if its resolution will not alter the order or
moot or revise decisions embodied in the order.” 486 U.S. at
199. That comment is best understood as applying to a re‐
maining issue to be decided by the district court. The Budinich
language could not extend to the prospect that a party might
choose to take some action that would render moot a pend‐
ing appeal or even the case itself. In virtually any civil case, a
losing defendant may choose to comply with the judgment
against him, or both parties may come to a post‐judgment
settlement. Either way an appeal may become moot. But if
that possibility defeated finality, we would have jurisdiction
over very few civil appeals.
The statutory rights of redemption and reinstatement
merely codify this commonplace option of complying with a
judgment. They do not change the essential finality of the
judgment of foreclosure.2
2 Beyond these doctrinal difficulties, there is also no logical connec‐
tion between the time these rights expire and the time for appeal the ma‐
jority has identified: after the sale is confirmed. If these rights expire be‐
fore the sale—and in this case they have long since expired—why must
the parties wait until the sale is confirmed before they can appeal? Why
wouldn’t the judgment transform into an appealable judgment the mo‐
ment these periods end? Or, given the special right to redeem for certain
No. 13‐1017 39
C. Confirmation of Sale Process
When properly understood, the need to carry out the
court‐ordered sale and to confirm the result under 735 ILCS
5/15‐1508(b) also does not undermine finality. The sale is the
key step in executing the judgment on the merits. The need
for a court order confirming the sale presents an opportunity
to challenge the sale itself but not the underlying foreclosure
judgment. This step in the execution does not undermine the
finality of the judgment of foreclosure.
As noted above, in Whiting v. Bank of United States, 38 U.S.
(13 Pet.) 6, 15 (1839), the Supreme Court expressly rejected
the contention that the decree (judgment) of foreclosure or‐
dering a sale would be “deemed final only after the return
and confirmation of the sale by a decretal order of the
Court.” We said essentially the same thing in Sorenson, con‐
cluding that a “decree or judgment [of foreclosure] is none
the less final because of the things thereafter to be done to
give it effect,” and we treated “the sale, report of sale, defi‐
ciency decree” as “incident to the execution of the decree.”
77 F.2d at 167.
The Ninth and Fifth Circuits agree. See Citicorp Real Es‐
tate v. Smith, 155 F.3d 1097, 1101 (9th Cir. 1998) (holding fore‐
closure judgment was final even though it left “the actual
amount of the deficiency judgment to be determined at a fair
value hearing following the judicial foreclosure sales”); Citi‐
bank, 645 F.2d at 337–38 (holding that issues relating to mer‐
residential foreclosures for 30 days after confirmation of a sale, see 735 ILCS
5/15‐1604(a), when, exactly, does the judgment become final so that the
time to appeal begins to run? The lack of answers to these questions
highlights the uncertainty caused by the majority’s approach to finality.
40 No. 13‐1017
its of foreclosure judgment could not be appealed after con‐
firmation of sale because earlier order had been final).
Nothing about the Illinois confirmation of sale proceed‐
ing suggests that it has a greater impact on the merits. In Il‐
linois, confirmation of sale proceedings are designed to de‐
termine whether the sale was fair. 735 ILCS 5/15‐1508(b).
They are initiated by a separate post‐judgment motion, id.,
and are part of the process to satisfy the judgment of foreclo‐
sure. See 5/15‐1508(f).
Under the Illinois statutes and case law, issues relating to
the fairness of a foreclosure sale should not overlap with is‐
sues about whether it was proper to enter the judgment of
foreclosure and to order the sale in the first place. After a
foreclosure sale, the issue is not whether the judgment of
foreclosure was correct but instead whether the sale was
conducted properly. The court must “enter an order confirm‐
ing the sale” unless a party establishes that the sale was in‐
valid because “(i) a notice required in accordance with [735
ILCS 5/15‐1507(c)] was not given, (ii) the terms of sale were
unconscionable, (iii) the sale was conducted fraudulently, or
(iv) justice was otherwise not done.” 735 ILCS 5/15‐1508(b).
The first three grounds for avoiding confirmation of a
sale plainly have nothing to do with the underlying merits.
Because confirmation of sale proceedings present different
issues, “there will be no judicial diseconomy if they are con‐
sidered in a separate appeal.” See Parks, 753 F.2d at 1402; see
also Radio Station WOW, Inc. v. Johnson, 326 U.S. 120, 126
(1945) (“[A] judgment directing immediate delivery of phys‐
ical property is reviewable … because it is independent of,
and unaffected by, another litigation with which it happens
to be entangled.”). In the typical case where the defendant
No. 13‐1017 41
demonstrates the sale is unfair, the remedy is simply to va‐
cate the sale and to order a new one, not to set aside the
foreclosure. See Estrella, 390 F.3d at 523–24 (remedy for un‐
fair sale was to order second sale).
But what about the fourth ground, that “justice was oth‐
erwise not done”? That language could be read broadly to
invite a judge to revisit the merits and to set aside not only
the sale but also the underlying judgment of foreclosure.
That prospect might weigh against finality, but both we and
the Illinois Supreme Court have rejected such a broad read‐
ing of the statute.
In Aurora Loan Services, Inc. v. Craddieth, 442 F.3d 1018,
1029 (7th Cir. 2006), a district court had refused to confirm a
foreclosure sale under Illinois law on exactly this broad the‐
ory. We reversed, noting “the confusion that would be inject‐
ed into the law were the confirmation of foreclosure sales a
matter of judicial whim.” The Illinois Supreme Court is ac‐
tually the authoritative voice on this point of law, and it has
explained: “At this stage of the proceedings, objections to the
confirmation under section 15‐1508(b)(iv) cannot be based
simply on a meritorious pleading defense to the underlying
foreclosure complaint.” Wells Fargo Bank, N.A. v. McCluskey,
999 N.E.2d 321, 328 (Ill. 2013). The state court explained that
“the justice provision under section 15‐1508(b)(iv) acts as a
safety valve to allow the court to vacate the judicial sale and,
in rare cases, the underlying judgment, based on traditional
equitable principles.” Id. at 329 (emphasis added).
In recognizing this “rare” possibility, the Illinois court
made clear that the justice provision in 15‐1508(b)(iv) impos‐
es a much more restrictive standard than the general stand‐
ard for vacating default judgments under 735 ILCS 5/2‐
42 No. 13‐1017
1301(e). To vacate the underlying judgment of foreclosure, it
is not enough under 15‐1508(b)(iv) for the defendant to
“have a meritorious defense to the underlying judgment.”
McCluskey, 999 N.E.2d at 329. The defendant‐borrower must
establish that “justice was not otherwise done because either
the lender, through fraud or misrepresentation, prevented the
borrower from raising his meritorious defenses to the com‐
plaint at an earlier time in the proceedings, or the borrower
has equitable defenses that reveal he was otherwise prevented
from protecting his property interests.” Id. (emphases add‐
ed).
The state court’s authoritative interpretation of the statute
shows that an objection to confirmation of a sale because
“justice was otherwise not done” on the merits of the suit is
analogous to a motion by a losing defendant under Federal
Rule of Civil Procedure 60(b). Like the justice clause in 15‐
1508(b)(iv), Rule 60(b)(3) permits a party facing an already
final adverse judgment to ask a court to vacate that judg‐
ment for reasons of “fraud …, misrepresentation, or miscon‐
duct by an opposing party.”
The possibility that a defendant might seek to vacate a
judgment under Rule 60(b) does not affect the finality of the
judgment, of course. See Fed. R. App. P. 4(a)(4)(A)(vi), (B)(i);
Fed. R. Civ. P. 60(c)(2); Stone v. INS, 514 U.S. 386, 401–03
(1995) (“motions that do not toll the time for taking an ap‐
peal give rise to two separate appellate proceedings that can
be consolidated”). In Illinois foreclosure cases, the “justice”
clause as interpreted by the Illinois Supreme Court allows
essentially the same sort of relief from a final judgment. This
method goes by a different name, but the superficial differ‐
ences should not distract us from the lack of an effect on fi‐
No. 13‐1017 43
nality. For purposes of finality under 28 U.S.C. § 1291, an Il‐
linois confirmation of sale proceeding does not affect the fi‐
nality of the underlying judgment on the merits.
D. Deficiency Judgments and Pre‐Judgment Interest
The majority’s final concern is that the amount of a defi‐
ciency judgment and the amount of interest due under the
judgment have not yet been ascertained. This reasoning
again confuses the underlying judgment on the merits with
the details of executing that judgment.
1. Deficiency Judgments
By establishing the amounts owed and the priorities of
lienholders, the judgment of foreclosure makes clear how the
proceeds of sale will be divided among those with interests
in the property. The judgment of foreclosure tells the mort‐
gagor‐defendant exactly how much money he must pay the
mortgagee‐plaintiff to resolve the lawsuit. Townsend is on
the hook for $143,569.65, plus post‐judgment interest. He
owes that amount whether all the money comes from the
proceeds of the sale or some also comes from payments to‐
ward a deficiency judgment. If the sale proceeds come up
short of the amount owed, the judgment requires entry of a
deficiency judgment against Townsend: “If the proceeds of
the sale are not sufficient to satisfy those sums due the Plain‐
tiff, the court shall enter a Personal Deficiency Judgment pur‐
suant to 735 ILCS 5/15‐1508(e).”
The majority contends that the extent of damages owed
by Townsend remains unquantified because the district
court has the power to reduce the deficiency judgment
Townsend owes following sale if the sale was unfair and the
auction produced too low a sales price. Ante at 7–9. With re‐
44 No. 13‐1017
spect, that argument misreads Illinois law. Some states allow
such reductions, but not Illinois. See Illini Federal Savings &
Loan Ass’n v. Doering, 516 N.E.2d 609, 612 (Ill. App. 1987).
Under Illinois law, the deficiency judgment must be “in an
amount equal to the difference between the sale price and
the debt sued upon.” Id. at 611. The Illini Federal court held
that there was no “statutory authority for setting a deficien‐
cy judgment independent of the sale price of the property.”
Id. Nor was there any “provision in Illinois case law for the
court, under its equity powers, to set a deficiency judgment
based on a judicial determination of value rather than the
sale price of the property.” Id. at 612.
An Illinois court reviewing a sale therefore lacks discre‐
tion to deny or alter the amount of the deficiency judgment
if it thinks the sales price was too low. See id. (“The proce‐
dure followed by the trial court in setting aside the deficien‐
cy judgment to conduct a hearing to determine the proper‐
ty’s value for purposes of setting a new deficiency amount
was outside the court’s authority in supervising judicial
sales.”); Bank of Benton v. Cogdill, 454 N.E.2d 1120, 1126 (Ill.
App. 1983) (“[T]he entry of such a [deficiency judgment] was
mandatory … and the court lacked discretion to deny the
plaintiff relief on equitable grounds.”). Illinois law simply
does not give trial courts the power the majority believes
they have to exercise discretion on the amount of a deficiency
judgment.
That does not mean a court is powerless if it thinks a sale
was unfair. Although “mere inadequacy of price alone is not
sufficient cause for setting aside a judicial sale,” a court can
set aside the sale based on “mistake, fraud, or violation of
duty by the officer conducting the sale.” See Illini Federal, 516
No. 13‐1017 45
N.E.2d at 611; see also Resolution Trust Corp v. Holtzman, 618
N.E.2d 418, 425 (Ill. App. 1993) (Illinois legislature “did not
intend to impose upon the court the kind of inquiry provid‐
ed in the Uniform Commercial Code that all sales ‘must be
commercially reasonable’”). But the remedy is only to order
a new sale, not to deny or reduce a deficiency judgment.
“[T]here is a significant difference between the court setting
aside a sale to order a new sale at a minimum price and the
court setting aside a deficiency judgment to establish a new
deficiency amount based on the court’s determination of
value in the absence of a sale.” Illini Federal, 516 N.E.2d at
612.
The majority resists Illini Federal’s prohibition on courts
exercising discretion over deficiency judgments on two
grounds. First, the majority argues that Illini Federal itself
recognized an ability to alter deficiency judgments in the
presence of “fraud or irregularity in the foreclosure proceed‐
ing.” Ante at 9, quoting Illini Federal, 516 N.E.2d at 611. But
this is not so. The court in Illini Federal did not contradict it‐
self, as the majority seems to think. Instead, as noted above,
“fraud or irregularity” permit the court to consider prices
other than the price at which the property was sold but only
to determine whether to deny confirmation of the sale and
order a new sale, not to deny or reduce a deficiency judg‐
ment. Illini Federal itself rejected just such an attempt to
stretch a court’s recognized power to refuse confirmation in‐
to a new power to deny or reduce a deficiency judgment. Id.;
accord, Nationwide Advantage Mortgage Co v. Ortiz, 975
N.E.2d 178, 186–87 (Ill. App. 2012); NAB Bank v. LaSalle Bank,
N.A., 984 N.E.2d 154, 161–62 (Ill. App. 2013).
46 No. 13‐1017
Second, the majority suggests that even though Illini Fed‐
eral held that courts lack discretion to reduce or deny defi‐
ciency judgments, later statutory changes have undermined
that holding. Closer examination shows this is not correct.
Illinois recodified its mortgage law in 1987 to “integrate into
one statute as much of the law of mortgage foreclosure as
possible.” Steven C. Linberg & Wayne F. Bender, The Illinois
Mortgage Foreclosure Law, Ill. B.J., Oct. 1987, at 800, 800.
Whether a deficiency judgment is mandatory or discretion‐
ary is a rather important feature of mortgage law. None of
the statutory language or case law cited by the majority sug‐
gests that Illinois has made what would be a striking change
in the law.
The current statute on deficiency judgments begins with
the phrase “the court shall enter a personal judgment for de‐
ficiency.” 735 ILCS 5/15‐1508(e) (emphasis added). The ma‐
jority nevertheless justifies its interpretation by pointing to
the use of some discretionary language, like the word “may,”
in the statute. This use of the word “may” is neither new nor
a harbinger of the new discretionary relief the majority has
found. Prior versions of the statute, including that applied in
Illini Federal, also said that a plaintiff “may” obtain a defi‐
ciency judgment. See, e.g., Ill. Ann. Stat. ch. 110 ¶ 15‐112
(1985) (“[I]f the sale of the mortgaged premises fails to pro‐
duce a sufficient amount to pay the amount found due in the
judgment … the plaintiff may have a personal deficiency
judgment… .”) (emphasis added); Ill. Ann. Stat. ch. 95, § 17
(1950) (“[A] decree may be rendered for any balance of mon‐
ey that may be found due to the complainant over and above
the proceeds of the sale or sales … .”) (emphasis added).
These uses of “may” make perfect sense even without a
grant of discretion to deny or reduce a deficiency judgment.
No. 13‐1017 47
Not every foreclosure plaintiff will seek a deficiency judg‐
ment, nor will it always be necessary to enter one—after all,
the property could be sold for more than the amount owed.
Even more to the point, no one else has noticed the new
and dramatic change found by the majority. Following the
enactment of the new statute, Illinois courts continue to cite
the principles of Illini Federal favorably. See Resolution Trust,
618 N.E.2d at 424–25 (“Even after the 1987 amendment,
courts have cited Illini Federal with approval.”). Commenta‐
tors—both at the time the statute was first passed and now—
have made clear that neither statute nor case law has granted
courts discretion over deficiency judgments. See Eric T.
Freyfogle, The New Judicial Roles in Illinois Mortgage Foreclo‐
sures, 19 Loy. U. Chi. L.J. 933, 933, 937 (1987) (“Illinois re‐
tained the requirement of judicial foreclosure sale and re‐
fused to impose any limits on post‐sale deficiency judg‐
ments.”); 2 Michael T. Madison et al., The Law of Real Estate
Financing § 22:4 (“Illinois does not restrict the recovery of a
deficiency judgment by statute apart from restricting a defi‐
ciency following a consensual foreclosure decree.”);
id. § 12:73.
It is no surprise, then, that the majority has not found a
single case where an Illinois court has recognized such dis‐
cretion over a deficiency judgment. In view of today’s deci‐
sion, though, we should expect some borrowers to seek such
discretionary relief, albeit without any substantive guidance
from our court on how trial courts should exercise this new‐
found discretion.
Since Illinois law actually denies trial courts discretion
over deficiency judgments, all parties can expect that any
deficiency judgment—whether ordered following the first
48 No. 13‐1017
attempted sale or a later sale—will equal the amount due
under the judgment less the net proceeds received from the
sale. We cannot know now the precise amount of any defi‐
ciency judgment, but that detail of execution does not affect
finality if the amount can be mechanically calculated. A need
to do arithmetic does not defeat finality. See Parks, 753 F.2d
at 1401–02 (finding “ministerial”—meaning “mechanical and
uncontroversial”—the need to calculate the specific amount
owed to each plaintiff even when the plaintiffs later had to
prove with receipts how much was owed); accord, e.g., Her‐
zog Contracting Corp. v. McGowen Corp., 976 F.2d 1062, 1064
(7th Cir. 1992) (“We think the original judgment was final,
because the process of reducing it to a sum certain was in‐
deed mechanical.”); Citicorp Real Estate, Inc. v. Smith, 155 F.3d
1097, 1101 (9th Cir. 1998) (holding foreclosure judgment was
final even though it left “the actual amount of the deficiency
judgment to be determined at a fair value hearing following
the judicial foreclosure sales”).
2. Interest Calculations
The majority’s suggestion that “pre‐judgment” interest is
not yet determined is similarly flawed and just misreads the
district court’s judgment. Even calling this interest “pre‐
judgment” begs the question by assuming that the calcula‐
tion of post‐judgment interest begins with the sale rather
than the judgment on the merits. But the face of the judg‐
ment here makes clear that the pre‐judgment amount of ac‐
crued interest has already been calculated and awarded at
the contract rate in the note. The judgment then provides for
post‐judgment interest: HSBC is entitled to the “Total Judg‐
ment Amount as found above, together with interest at the
statutory judgment rate after entry of this judgment.” ¶ 16.
No. 13‐1017 49
The calculation of post‐judgment interest is simpler and
certainly does not affect finality. See Pace Communications,
Inc. v. Moonlight Design, Inc., 31 F.3d 587, 591 (7th Cir. 1994);
cf. Student Loan Marketing Ass’n v. Lipman, 45 F.3d 173, 175–
77 (7th Cir. 1995) (failure to calculate pre‐judgment interest
defeats finality). Post‐judgment interest accrues at the statu‐
tory rate under 28 U.S.C. § 1961, and its calculation is a mat‐
ter of arithmetic. The need to calculate both the amount of
any deficiency judgment and post‐judgment interest thus
should not prevent the district court’s judgment of foreclo‐
sure from being a final judgment.3
More generally, on this issue of appellate jurisdiction,
where predictability and clarity are especially prized, we
should stick with the long‐settled difference between a
judgment on the merits and the execution of that judgment.
We should exercise our jurisdiction and decide the merits.
III. Summary Judgment for HSBC
Because I believe we have jurisdiction, I turn briefly to
the merits of the appeal. Townsend argues that HSBC was
not entitled to summary judgment because it failed to estab‐
lish that the Illinois mortgage foreclosure statute authorized
it to bring the foreclosure action. To the extent the argument
is framed in terms of prudential or statutory standing, the
Supreme Court clarified in Lexmark Int’l, Inc. v. Static Control
3 The majority’s approach to interest also creates a new uncertainty
with significant economic consequences given today’s interest rates.
When does the interest calculation shift from the higher, pre‐judgment
contract rate to the lower, post‐judgment statutory rate: with the judg‐
ment of foreclosure or the confirmation of sale? Which is the “entry of
the judgment” under 28 U.S.C. § 1961? See generally Kaiser Aluminum &
Chem. Corp. v. Bonjorno, 494 U.S. 827 (1990).
50 No. 13‐1017
Components, Inc., that whether a particular plaintiff has a
cause of action under a statute no longer falls under the ru‐
bric of standing. See 572 U.S. —, 134 S. Ct. 1377, 1386–88 &
n.4 (2014) (finding it misleading when courts label the ques‐
tion whether a given plaintiff has a cause of action under a
statute as being one of prudential or statutory standing); see
also Empress Casino Joliet Corp. v. Johnston, 763 F.3d 723, 733–
34 (7th Cir. 2014) (following Lexmark).
It is clear from the record that HSBC has constitutional
standing, an issue that could not be waived. Townsend’s
other argument—that HSBC failed to establish that the Illi‐
nois statute permits a party in its position to seek judicial re‐
lief—was waived. Townsend made no attempt during the
summary judgment proceedings to show that HSBC was the
wrong party to bring suit.
Even when a plaintiff’s motion for summary judgment
goes unopposed, a plaintiff is not entitled to summary
judgment unless it establishes that there is no issue of mate‐
rial fact with respect to the elements it must prove and that it
is therefore entitled to judgment as a matter of law. See, e.g.,
Hotel 71 Mezz Lender LLC v. Nat’l Retirement Fund, 778 F.3d
593, 601–02 (7th Cir. 2015); Johnson v. Gudmundsson, 35 F.3d
1104, 1112 (7th Cir. 1994). Under Illinois law, though, the de‐
fendant bears the burden of proving that the statute does not
permit the plaintiff to foreclose on the mortgage. A defend‐
ant waives the argument if it is not made prior to entry of
the judgment of foreclosure. See U.S. Bank, N.A. v. Avdic, 10
N.E.3d 339, 352 (Ill. App. 2014) (plaintiff need not allege facts
establishing that it is a party that can sue under the statute in
order to win a judgment of foreclosure); Mortgage Electronic
Registration Systems, Inc. v. Barnes, 940 N.E.2d 118, 123 (Ill.
No. 13‐1017 51
App. 2010). Townsend’s failure to raise this non‐
jurisdictional issue in the district court means that he waived
it. See Resolution Trust Corp. v. Juergens, 965 F.2d 149, 153 (7th
Cir. 1992); see also C & N Corp. v. Gregory Kane & Ill. River
Winery, Inc., 756 F.3d 1024, 1026 (7th Cir. 2014) (holding that
defendant can waive arguments even if they might have un‐
dermined plaintiff’s prima facie case).
Accordingly, I would affirm the judgment of the district
court. I respectfully dissent from dismissal of the appeal for
lack of appellate jurisdiction.