Getting a Second Bite at the Apple

The Res Judicata Exception for Seeking Foreclosure Deficiencies in Illinois

The legal doctrine of res judicata bars causes of action that were or could have been argued in a previous legal action. While res judicata is routinely enforced by Illinois courts, recent cases demonstrate it has not been consistently applied against consumer lending plaintiffs. Illinois homeowners who were previously foreclosed upon are now being sued a second time by creditors trying to recover the deficiency on the original home loan.
This Note argues that secondary deficiency lawsuits should be precluded under res judicata based on Illinois precedent, res judicata principles, and compelling policy reasons. Further, the recent Illinois Appellate Court opinions that justify these secondary cases are based on misapplied Illinois precedent and do not consider the changes to the Illinois Mortgage and Foreclosure Law. Under a proper application of Illinois precedent, it is clear that these secondary lawsuits share an “identity of cause of action” with the original foreclosure and thus must be barred under res judicata.

The full text of this Note is available to download as a PDF.