United States of America v. Smith

Filing 14

DEFAULT JUDGMENT AND ORDER DIRECTING SALE OF MORTGAGED PROPERTY in favor of United States of America against B.C.M.W. Community Services, Inc., Centralia, Illinois, Illinois Department of Healthcare and Family Services, Unknown Heirs and Legatees of Edward Earl Smith, Deceased, Unknown Owners and Nonrecord Claimants, Edward Earl Smith. The 13 MOTION for Default Judgment is granted. Signed by Chief Judge David R. Herndon on 11/18/2011. (msdi)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
UNITED STATES OF AMERICA,

)
)
Plaintiff,
)
)
vs.
)
)
ESTATE OF EDWARD EARL SMITH, et al)
)
Defendants.
)

Civil No. 11-cv-228-DRH-PMF

JUDGMENT DECREE AND ORDER
DIRECTING SALE OF MORTGAGED PROPERTY
Herndon, Chief Judge:
On March 23, 2011, the United States of America ("USA") commenced the
above-captioned mortgage foreclosure suit against Estate of Edward Earl Smith,
B.C.M.W. Community Services, Inc., City of Centralia, Illinois, State of Illinois
Department of Healthcare and Family Services, Unknown Heirs and Legatees of
Edward Earl Smith, Deceased, Unknown Owners, and Non-Record Claimants. The
parcel of property in question is located in Centralia, Illinois, which lies within this
Judicial District. Defendant(s) was/were properly served herein but failed to move,
answer, or otherwise plead in response to the complaint. Based on that failure, the
USA secured the Clerk's entry of default on October 7, 2011, pursuant to Federal
Rule of Civil Procedure 55(a).
Now before this Court is the USA's motion for default judgment under Rule
55(b). Having carefully reviewed the record, the Court GRANTS the motion for
default judgment (Doc. 13), after FINDING as follows:
1.

This Court has jurisdiction of the parties to and subject matter of this

suit. The Defendants were properly served and having failed to answer or otherwise
enter any appearance herein, are properly defaulted.
2.

The USA, acting through the Rural Housing Service or successor agency,

United States Department of Agriculture, made a loan to Edward Earl Smith,
secured by a mortgage dated May 21, 2002 (Exh. A of the complaint), in the total
principal amount of $33,900.00. The mortgage was recorded on May 28, 2002, in
Marion County, Illinois as Document No. 2002R4344. The loan is evidenced by a
promissory note dated May 21, 2002 (Exh. B). Defendant, Edward Earl Smith,
defaulted on the note. On November 3, 2010, the USA, acting through the United
States Department of Agriculture, Rural Development, issued a notice of acceleration
(Exh. C).

The property has been abandoned as set forth in the affidavit of

abandonment (Exh. D) dated February 9, 2011.
3.

The following person/persons may have claimed an interest in the above

described property, but are foreclosed from asserting their claim, if any, because of
their default in this action: Estate of Edward Earl Smith, B.C.M.W. Community
Services, Inc., City of Centralia, Illinois, State of Illinois Department of Healthcare
and Family Services, Unknown Heirs and Legatees of Edward Earl Smith, deceased,
Unknown Owners, and Non-Record Claimants.
4.

By virtue of the mortgage and indebtedness thereby secured, the USA

has a valid and subsisting lien as follows:
Common address: 401 South Perrine, Centralia, Illinois 62801
Lot 24 in Block 2 in Fourth Melrose Place Addition or
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Subdivision to the City of Centralia, Marion County, Illinois,
as shown by Plat recorded in Plat Book 2 page 75. Except all
coal and other minerals which underlie or may be produces
from said real estate.
Permanent Real Estate Index No. 14-00-071-580
5.

By virtue of the mortgage and the indebtedness thereby secured, as

alleged in the complaint, the following amounts are due to the USA:
(a)

$

380.00

U.S. Marshals costs for service of summons $

65.04

Fee to publish notice of pendency of action $

453.60

Title expenses

$

300.00

TOTAL
(b)

U.S. Attorney's docket and recording fees.

$

745.04

For the use and benefit of the USA, holder of the note secured by
the mortgage aforesaid, but subject and subordinate to the lien
for payment of the items mentioned in subparagraph (a) of this
paragraph:
Unpaid principal balance. . . . . . . . . . . . .

$34,620.10

Accrued interest at $6.4377 per day due and
unpaid as of November 9, 2011. . . . . . . . $ 2,893.15
Total amount due USA as of November 9, 2011,
exclusive of foreclosure costs. . . . . . . . . . $37,513.25
(c)

In addition, the USA may be compelled to advance various sums
of money in payment of costs, fees, expenses and disbursements
incurred in connection with the foreclosure, including, without
limiting the generality of the foregoing, filing fees, stenographer's
fees, witness fees, costs of publication, costs of procuring and
preparing documentary evidence and costs of procuring abstracts
of title, certificates, foreclosure minutes and a title insurance
policy.
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(d)

(e)

In order to protect the lien of the mortgage, it may or has become
necessary for plaintiff to pay taxes and assessments which have
been or may be levied upon the mortgaged real estate.

(f)

In order to protect and preserve the mortgaged real estate, it may
also become necessary for the plaintiff to make such repairs to
the real estate as may reasonably be deemed for the proper
preservation thereof.

(g)

6.

Under the terms of the mortgage, all such advances, costs and
other fees, expenses and disbursements are made a lien upon the
mortgaged real estate and the plaintiff is entitled to recover all
such advances, costs, expenses and disbursements, together with
interest on all advances at the rate provided in the mortgage, or,
if no rate is provided therein, at the statutory judgment rate, from
the date on which such advances are made.

Under the terms of the mortgage, any money so paid or expended
has or will become an additional indebtedness secured by the
mortgage and will bear interest from the date such monies are
advanced at the rate provided in the mortgage, or, if no rate is
provided, at the statutory judgment rate.

Marion County, Illinois, has a valid lien on the above-described property

for tax for the year 2011, and the property will be sold subject to the interest of
Marion County, resulting from taxes, general or special, which are a valid lien against
the property.
Accordingly the Court GRANTS the USA's motion fo default judgment (Doc.
13).

JUDGMENT IS HEREBY ENTERED against Edward Earl Smith, for

$38,258.29. Unless Defendants and their assigns and successors in interest to the
above-described property pay to the USA, acting through the Farmers Home
Administration, United States Department of Agriculture, within three days from the
date of this decree the sum of $38,258.29, with attorney's fees and court costs with

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lawful interest to be computed thereon from this date until paid, the real estate
described in paragraph 4 of this Judgment and Order Directing Sale of Mortgaged
Property SHALL BE SOLD AT PUBLIC SALE to the highest bidder for 10% at time
of sale and balance within 72 hours, subject to taxes, general or special, due and
owing to Marion County, Illinois, by the United States Marshal for the Southern
District of Illinois at the front door of the Marion County Courthouse in the City of
Salem, Illinois.
The property shall be sold free and clear of any claimed lien of Estate of
Edward Earl Smith, B.C.M.W. Community Services, Inc., City of Centralia, Illinois,
State of Illinois Department of Healthcare and Family Services, Unknown Heirs and
Legatees of Edward Earl Smith, deceased, Unknown Owners, and Non-Record
Claimants.
The United States Marshal for the Southern District of Illinois shall give public
notice of the time, place, and terms of such sale, together with a description of the
premises as referred to in paragraph 4 of this Judgment and Order Directing Sale
of Mortgaged Property to be sold, by previously publishing the same once each week
for three (3) consecutive weeks as provided by law in a secular newspaper of general
publication in the State of Illinois, the first publication to be not less than four weeks
before the date of such sale; that said United States Marshal may adjourn the sale so
advertised by giving public notice by proclamation.
The USA or any party to this case may become the purchaser or purchasers
at such sale. Upon such sale being made, the United States Marshal shall execute
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and deliver to the purchaser or purchasers a certificate of purchase, which certificate
shall be freely assignable by endorsement thereon.
The amount required to redeem shall consist of the total balance due as
declared above plus interest thereon at the statutory rate hereunder and all
additional costs and other expenses allowed by the Court.
If the purchaser at the judicial sale of residential property is a mortgagor who
is a party to this proceeding or its nominee, and if the sale price is less than the
amount required to redeem specified in 735 ILL. COMP. STAT 5/15-1604, an owner
of redemption has a special right to redeem for a period ending 30 days after the date
the sale is confirmed by paying the mortgagee the sale price plus all additional costs
and expenses incurred by the mortgagee set forth in the report of sale and confirmed
by this Court.
The

above-described

mortgaged

real

estate

has

been

abandoned.

Consequently, the redemption period pursuant to 735 ILCS § 5/15-1603 shall end
30 days after entry of this Judgment/Order pursuant to 735 ILCS § 5/15-1603(b)(4).
The reinstatement period shall not extend beyond the redemption period as
shortened. 735 ILCS § 5/15-1603(b)(4).
Out of the proceeds of sale the United States Marshal shall retain his
disbursements and fees. Out of the remainder of the proceeds, he shall pay to the
USA $38,258.29, together with lawful interest to be computed thereon to the date of
this Judgment and Order Directing Sale of Mortgaged Property and any court costs
of this action.
Page 6 of 8

The United States Marshal shall take receipts from the respective parties from
whom he may make payments aforesaid and file the same together with his report
of sale to this Court. If the property shall sell for a sum more than sufficient to make
the aforesaid payments, then after making the payments, the United States Marshal
shall bring such surplus monies into Court without delay for further distribution by
order of this Court.
From the date of entry of this Judgment and Order Directing Sale of Mortgaged
Property through the 30th day after a foreclosure sale is confirmed by this Court, the
mortgagor shall be entitled to retain possession of the above-described property.
After the 30th day the foreclosure sale is confirmed, the holder of the
Certificate of Sale shall be entitled to immediate possession of the property upon
payment of the sale purchase price, without notice to any party or further order of
the Court. The mortgagors shall peaceably surrender possession of the property to
said certificate holder immediately upon expiration of the said 30-day time period.
In default of mortgagor so doing, an Order of Ejectment shall issue.
Upon or after confirmation of sale, the person who conducted the sale or the
Court shall execute a deed to the holder of the Certificate of Sale sufficient to convey
title, which deed shall identify the Court and the caption of the case in which
judgment was entered authorizing issuance of the deed. Signature and the recital in
the deed of the title or authority of the person signing the deed as grantor, of
authority pursuant to this Judgment and Order Directing Sale of Mortgaged Property,
and of the giving of the notices required by statute shall be sufficient proof of the facts
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recited and of such authority to execute the deed, but the deed shall not be construed
to contain any covenant on the part of the person executing it.
Delivery of the deed executed on the sale of the property, even if the purchaser
or holder of the certificate of sale is a party to the foreclosure, shall be sufficient to
pass the title thereto. The conveyance shall be an entire bar of (i) all claims of parties
to the foreclosure and (ii) all claims of any non-record claimant who is given notice
of the foreclosure as provided by statute.
If the monies from the sale are insufficient to pay sums due to the USA with
interest after deducting the costs, the United States Marshal shall specify the amount
of the deficiency in his report.
The Court RETAINS JURISDICTION over the subject matter and the parties
hereto for the explicit purpose of enforcing this Judgment and Order Directing Sale
of Mortgaged Property and the United States Marshal shall report his actions to this
Court at the earliest possible time.
IT IS SO ORDERED.
Signed this 18th day of November, 2011.
Digitally signed by
David R. Herndon
Date: 2011.11.18
11:28:18 -06'00'
___________________________________

Chief Judge
United States District Court

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