Illinois Case Update - First District Clarifies Acceleration Letter Ambiguities for Lenders

In CitiMortgage, Inc. v. Hoeft, 2015 IL App (1st) 150459 (1st Dist. Aug. 17, 2015), the Illinois’ Appellate Court clarified an issue occasionally raised by borrowers attacking the sufficiency of acceleration letters sent out by lenders—that acceleration letters identifying both the amount required to cure a default and mentioning additional charges that might accrue (like regularly scheduled payments and late charges) creates ambiguity as to the amount required to cure the default. The court reasoned that because the borrower has not yet incurred the next monthly payment amount or additional late charges when the lender sends the acceleration letter, it is improper to include an itemization of such future charges and there is no ambiguity as to the amount that must be paid to cure the default. The importance of this ruling for lenders is that when sending acceleration letters to borrowers, lenders can take comfort in including language instructing borrowers that other sums (such as regular monthly payments and late charges) might also be due in addition to the cure amount identified in the acceleration letter. Because such amounts are not yet due, there is no need to itemize them or include them in the cure amount (and thus no ambiguity). Borrowers consistently raise this issue across Illinois, and thanks to the Hoeft ruling, lenders now have a clear defense to this argument. 

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