by John C. Murray

© 2000. All rights reserved.

Federal court rulings in Illinois on receiverships, diversity jurisdiction, and foreclosure sales have encouraged commercial mortgage lenders to file foreclosure actions in federal instead of state court. But they should beware the downside, this author advises.

I. Introduction

Commercial mortgage lenders sometimes seek to bring foreclosure actions against delinquent borrowers in federal rather than state court.¹ Federal jurisdiction for a foreclosure action is predicated on diversity of citizenship.² Although in general the law of the state where the property is located applies,³ mortgagees may believe that they have certain tactical and procedural advantages in federal court, including the power to obtain:

However, some of these advantages may be more apparent than real. In fact, there may be disadvantages for mortgagees in a federal foreclosure filing, especially on receivership and jurisdictional issues and fees charged for conducting foreclosure sales. This article will examine these issues.

II. Appointment of Receiver

A mortgagee will seek appointment of a receiver in a federal foreclosure action for the same reasons as in a state court proceeding:

Mortgagees should be aware, however, that federal and not state law may be held to govern the appointment of an equity receiver in federal court, and federal standards can be harder to meet.

In Midwest Sav. Ass’n v Riversbend Associates Partnership,⁵ the mortgagee commenced foreclosure in the federal district court in Minnesota. The court noted that the default itself would have provided a basis for appointment of a receiver under Minnesota law. However, the court held that under FRCP 66, appointment of a receiver must be made under federal standards, and that default alone was not enough - appointment is an extraordinary remedy to be granted only at the court’s discretion.

The court stated that the factors federal courts have used to determine whether a receiver should be appointed "include fraudulent conduct on the part of the borrower, or the imminent danger of the property being lost, concealed, injured, diminished in value, or squandered."⁶Since the mortgagee acknowledged that none of these factors was present in Midwest Sav. Ass’n, the court declined to appoint a receiver.

Rule 66 provides, in pertinent part: The practice in the administration of estates by receivers or by other similar officers appointed by the court shall be in accordance with the practice heretofore followed in the courts of the United States or as provided in rules promulgated by the district courts. In all other respects the action in which the appointment of a receiver is sought or which is brought by or against a receiver is governed by these rules.

The Advisory Committee Note accompanying the 1948 amendment that added the final sentence of Rule 66 states that it was added to assure "the application of the federal rules to all matters except actual administration of the receivership itself."⁷ The question that must be decided by courts in federal foreclosure actions is what constitutes the applicable federal common law for purposes of appointing a receiver.

In Resolution Trust Corp. v Fountain Circle Associates Ltd. Partnership,⁸ the RTC, as receiver for a failed savings association, filed a foreclosure action against the mortgagor in the federal district court for the Northern District of Ohio and sought the appointment of a federal equity receiver under Rule 66. The court first noted that the appointment of a federal equity receiver is an extraordinary remedy and is only available when "ancillary to some form of final relief which is appropriate for equity."⁹

Citing Midwest Sav. Ass’n and earlier decisions, the court held that under Rule 66 the appointment of a receiver is governed by federal law and measured by federal standards, and that "[f]ederal courts are not bound by state law in determining whether such an equitable remedy is to be given."¹⁰ The court acknowledged that once appointed, the receiver, in accordance with Rule 66 and federal statute,¹¹ is to manage the property according to state law where the property is located.

The court further acknowledged that a federal court should look to state law where there is insufficient federal precedent, but found in that case enough federal law to resolve the issue. The court noted that federal courts have considered a number of factors in determining whether to appoint a receiver, the most important of which are the adequacy of the security and the financial position of the mortgagor.

Based on its review of federal case law, the court held that to justify appointment of a receiver to manage and operate the mortgaged property, not merely collect the rents and profits, the mortgagee must show factors beyond the inadequacy of the security and insolvency of the mortgagor. The court listed the following additional factors as relevant:

The RTC submitted evidence establishing to the court’s satisfaction that not only was the mortgagor insolvent and the value of the security less than the outstanding mortgage indebtedness, but that the property was not being maintained and was diminishing in value. On that basis, the court granted the RTC’s motion for appointment of a receiver to collect the rents and operate and manage the property.¹³ The court noted its decision would be the same even under state law.¹⁴

However, in an unreported decision, Federal Home Loan Mortgage Corp. v Riverdale Bank, ¹⁵ the district court for the Northern District of Illinois held that the Illinois Mortgage Foreclosure Law ("IMFL")¹⁶ is the federal common law that should be applied to determine whether a receiver should be appointed. The court stated that in United States v Kimbell Foods, Inc., ¹⁷ the Supreme Court indicated that where federal common law is to be applied, it should incorporate the applicable state law absent a compelling federal interest to the contrary.

The court, analyzing the facts in light of the factors mentioned by the Supreme Court in Kimbell, found that there is no need for national uniformity in real property law, that applying Illinois foreclosure law to the appointment of a receiver would not frustrate any federal objective (and would only encourage forum shopping), and that imposing a strict, uniform standard for appointment of receivers would frustrate agreed-upon commercial contracts premised on state law.¹⁸ The court also noted that previous federal decisions in the northern district "have consistently applied the IMFL in determining whether a receiver should be appointed."¹⁹

Because the mortgagee had met the requirements of the IMFL for the appointment of a receiver in connection with a commercial real estate foreclosure - i.e., the mortgagee was authorized under the mortgage to obtain appointment and the court found a reasonable probability that the mortgagee would prevail on a final hearing on the foreclosure action²⁰ - the court ruled that the mortgagee was entitled to the appointment of a receiver.

Although a significant difference between state and federal court practice in the standards for appointment of a receiver might encourage forum shopping, mortgagees might find it difficult to anticipate the differences at the commencement of foreclosure litigation, and the standards imposed by state and federal courts are often essentially the same.²¹

Federal court discretion in appointing a receiver is restricted by several federal statutes. The court is prohibited from appointing any person related to any judge of the appointing court within the fourth degree;²² any clerks of a district court or their deputies unless special circumstances are shown;²³ or any persons employed in any civil or military capacity by the United States or any federal justice or judge.²⁴

In addition, local federal district court rules may contain additional restrictions on who may serve as a federal receiver.²⁵ Once appointed, a receiver in any civil action or proceeding involving real or personal (or mixed real and personal) property situated in different districts has complete jurisdiction, possession, and control over all such property upon filing a bond as required by the court, and may sue in any district without ancillary appointment²⁶ and be sued based on any acts or transactions in carrying on business connected with such property.²⁷ As an officer and agent of the court, a federal receiver is entrusted with administering the property and has standing to appear before the court that appointed it in matters related to the costs of administration.²⁸

Mortgagees may believe that in a federal foreclosure proceeding they can obtain a receiver ex parte or without an evidentiary hearing though they could not under state law. Although receivers are generally not appointed ex parte and without notice to all parties, notice is not specifically required by federal statute²⁹ or by Rule 66, and a federal court does have the power in an emergency to appoint a receiver ex parte.

However, the circumstances justifying such relief would be truly exceptional, such as deliberate avoidance of service by the defendant or inability to obtain service in the jurisdiction, which would frustrate the purpose of the receivership. The grounds for such relief are determined in the sole discretion of the trial court.³⁰ Also, federal courts have held that evidentiary hearings are not necessary despite state law to the contrary where the pleadings and the record of the case disclose factors that warrant the appointment of a receiver.³¹

[while f]iling foreclosure proceedings in federal court...often provides genuine tactical and procedural advantages...., counsel for mortgagees...should file a foreclosure proceeding in federal court only when it is clearly in the client’s best interest."

III. Federal Diversity Jurisdiction

Jurisdictional issues in federal foreclosure actions have been litigated extensively in Illinois because the traditional practice by mortgagees has been to name as defendants not only all known junior lienholders and other claimants with interests affecting the property, but also all "unknown owners and non record claimants." This is done to provide the purchaser at the foreclosure sale with marketable title - i.e., title free from encumbrances and any reasonable doubt as to its validity.³²

Federal courts in Illinois, notably the northern district of Illinois in John Hancock Mutual Life Ins. Co. v Central National Bank in Chicago,³³ have held that joinder of unidentified parties, such as "unknown owners" or "non record claimants," in a mortgage foreclosure action destroys federal diversity jurisdiction because the citizenship of such parties is unknown.³⁴

However, in another decision issued by the northern district later that same year, John Hancock Realty Development Corp. v Harte,³⁵ Judge Leighton disagreed with Judge Shadur’s conclusion in John Hancock Mutual Life and ruled that even though unknown owners and non record claimants were named as defendants, they were "nominal parties with no substantial interest in the controversy" and did not destroy federal jurisdiction.³⁶ Judge Leighton also stated that he believed Judge Shadur had not directly addressed whether the unknown owners and non record claimants were nominal or substantial parties.³⁷

After the John Hancock Mutual Life decision, counsel for mortgagees in the northern district have sought to avoid dismissal by abandoning traditional practice, choosing instead not to name as defendants or seek to bind by publication unknown owners and non record claimants. This revised practice has been endorsed by federal courts in Illinois.

For example, in BancBoston Mortgage Corp. v Pieroni,³⁸ the court upheld federal jurisdiction but stated that the result would be otherwise if unknown owners and non record claimants were named as defendants.³⁹ The court was also careful to note that the purchaser at the foreclosure sale would take title encumbered by the rights of any parties who were not joined.⁴⁰

Judge Shadur, who issued the BancBoston Mortgage Corp. opinion, noted that since John Hancock Mutual Life, dismissals of federal foreclosure have become virtually unknown because of the cessation of the former practice of naming such parties as defendants. Judge Shadur also expressed his disagreement with Judge Leighton’s opinion in John Hancock Realty Development, which he felt was unsupported by his own opinion in John Hancock Mutual Life and by other subsequent decisions on the matter issued by the district court for the Northern District of Illinois.⁴¹

Title insurance companies in Illinois will generally issue an owner’s title policy to the purchaser at a foreclosure sale notwithstanding the unadjudicated claims and interests of unknown and unnamed owners and non record claimants, thereby assuring the purchaser of marketable title.⁴²

IV. Foreclosure Fees

Mortgagees often file foreclosure actions in federal court expecting to pay substantially smaller fees for the foreclosure sales. By statute, Illinois foreclosure sales may be conducted by any judge or sheriff.⁴³ In an Illinois state court mortgage foreclosure proceeding, the sheriff typically conducts the foreclosure sale and is entitled to receive a statutory fee of $600.⁴⁴

However, the practice in federal foreclosure actions is to appoint a special commissioner to conduct the sale, and the rule in the northern district is to pay the commissioner a fee of $200 for sales in Cook County or $300 for sales outside Cook County but within the northern district.⁴⁵

In other jurisdictions, however, the U.S. Attorney’s Office has argued that the statutory fees provided for federal marshals under 28 USCA section 1921 apply to any mortgage foreclosure sale conducted by the U.S. Marshal’s service. Under this statute, marshals’ fees are based on a percentage of the value of the property and are usually significantly higher than those allowed in state court. The applicability and amount of such fees should be considered by counsel for a mortgagee before commencing a foreclosure proceeding in federal court. Subsection (c)(l) of 28 USCA section 1921 states:

The United States Marshals Service shall collect a commission of three (3) percent of the first $1,000 collected and 1 l/2 percent on the excess of any sum over $1,000, for seizing or levying on property (including seizures in admiralty), disposing of such property by sale, setoff, or otherwise, and receiving and paying over money, except that the amount of commission shall be within the range set by the Attorney General. If the property is not disposed of by the marshal’s sale, the commission shall be in such amount, within the range set by the Attorney General, as may be allowed by the court. In any case in which the vessel or other property is sold by a public auctioneer, or by some party other than a marshal or deputy marshal, the commission authorized under this subsection shall be reduced by the amount paid to such auctioneer or other party. This subsection applies to any judicially ordered sale or execution sale, without regard to whether the judicial order of sale constitutes a seizure or levy within the meaning of State law. This subsection shall not apply to any seizure, forfeiture, sale, or other disposition of property pursuant to the applicable provisions of law amended by the Comprehensive Forfeiture Act of 1984 (98 Stat 2040).

The subsection was amended in 1988 to add the final two sentences. The U.S. Attorney’s Office recently argued in a Minnesota-based federal foreclosure sale that the language added by the 1988 amendment makes the statutory fees applicable to any mortgage foreclosure sale conducted by the United States Marshal’s Service.

Rather than contest the matter, local counsel for the mortgagee asked the federal court to direct the county marshal’s office to conduct the sale (for a fee of $25!). The federal court agreed and the sale was completed. Although the percentage fees calculated pursuant to 28 USCA section 1921(c)(l) can be extremely large in the foreclosure of multi-million dollar properties, the U.S. Attorney’s office (at least in Minnesota), under the authority in 28 USCA section 1921(c)(l) regarding "the range set by the Attorney General," has set a cap of $50,000 for statutory fees for foreclosure sales.

"Problems in obtaining federal receiverships, proving diversity of citizenship for federal jurisdictional purposes, and determining and minimizing court costs for conducting foreclosure sales may make the federal court system less attractive to mortgagees."

In addition, local counsel retained by Travelers Realty Investment Company of Oak Brook (the author’s former employer) has been able on at least two occasions to avoid the costly U.S. Marshal’s fees in Marion County, Indiana, by the following process:

1. The foreclosure decree is worded so that the direction and authority to sell the property are not limited to the U.S. Marshal.

2. Pursuant to Indiana statute allowing it, a certified copy of the federal court judgment and foreclosure decree is filed in the judgment docket of the circuit court where the property is located⁴⁶ The docketing of the judgment gives the federal decree the enforcement effect of a state court judgment.⁴⁷

3. Pursuant to Indiana’s foreclosure sale statutes, the matter is then praecipied with the clerk of the circuit court to certify the docketed judgment to the sheriff, and counsel for the mortgagee prepares the necessary notices identifying the federal court judgment as being docketed in the circuit court judgment docket.⁴⁸

4. The sheriff then proceeds with the sale process at no cost to the mortgagee other than publication fees.

Neither the circuit court clerk, the sheriff’s counsel, nor the title companies involved objected to this process. It is uncertain whether federal courts in states other than Illinois, Indiana, and Minnesota will permit federal foreclosure sales to be conducted by state court officials, or officials appointed by the federal court under applicable state law, without using the U.S. Marshal’s office.

V. Conclusion

Although there may be advantages to mortgagees in filing foreclosure actions in federal rather than state court, some of the perceived advantages may be illusory. Problems in obtaining federal receiverships, proving diversity of citizenship for federal jurisdictional purposes, and determining and minimizing court costs for conducting foreclosure sales may make the federal court system less attractive to mortgagees.

In addition, some federal courts may discourage the filing of foreclosure actions, or give them low priority, because they feel that they belong in state court and clog already crowded federal dockets. Also, using a state court may be better for a mortgagee in an uncontested or "friendly" foreclosure and in jurisdictions where the state court system is reasonably neutral rather than mortgagor-oriented.

As Judge Shadur noted in BancBoston Mortgage Corp., "[t]his District Court is one of the few - perhaps the only one - in the federal system whose case filings include a substantial component of mortgage foreclosure litigation...."⁴⁹ Judge Shadur attributes this to the lower fees payable to the special commissioner appointed by the district court for the Northern District of Illinois to conduct mortgage foreclosure sales.

Filing foreclosure proceedings in federal court (assuming subject matter jurisdiction and actual diversity of citizenship of the parties) often provides genuine tactical and procedural advantages despite the potential problems mentioned in this article. Still, counsel for mortgagees must carefully weigh the positive and negative factors and should file a foreclosure proceeding in federal court only when it is clearly in the client’s best interest.

ENDNOTES

¹ Conversely, a nonresident defendant may seek removal to federal court, based on diversity of citizenship of the parties and an amount in controversy of at least $50,000. 28 USCA § 1345 (1993). Except as otherwise provided by Congress, 28 USCA § 1345 (1993) provides that federal district courts have original jurisdiction, independent of diversity of citizenship or the amount in controversy, of all civil actions, suits, or proceedings commenced by the United States or by any U.S. agency or officer expressly authorized to sue by act of congress.

² 28 USCA § 1332 (1993).

³ See Erie Railroad Co. v Tompkins, 304 US 64, 78, 58 S Ct 817, 822 (1938); Baxter Dunaway, The Law of Distressed Real Estate, § 16.03[2][a] at 16-5 (Clark Boardman Callaghan, 1993) ("Dunaway").

⁴ See Charles A. Wright and Arthur P. Miller, Federal Practice and Procedure, Civil, § 2983 at 18 n 42 (West, 1973) ("Wright"); Dunaway, § 7.01 at 7-2 (cited in note 3); 65 Am Jur 2d Receivers § 3 (1972).

⁵ 724 F Supp 661 (D Minn 1989).

⁶ Id at 661. See also Aviation Supply Corp. v R.S.B.I. Aerospace, Inc., 999 F2d 314, 316-17 (8th Cir 1993); Brill & Harrington Investments v Vernon Sav. and Loan Ass’n, 787 F Supp 250, 253-54 (DC 1992); New York Life Ins. Co. v Watt West Inv. Corp., 755 F Supp 287, 292 (ED Cal 1991); Chase Manhattan Bank, N.A. v Turabo Shopping Center, Inc., 683 F2d 25, 26 (1st Cir 1982); Bookout v Atlas Financial Corp., 395 F Supp 1338, 1341-42 (ND Ga 1974), aff’d 514 F2d 757 (5th Cir 1975); View Crest Garden Apartments, Inc. v United States, 281 F2d 844, 847-48 (9th Cir 1960), cert denied 364 US 902, 815 S Ct 235 (1960); In re Memorial Services, Inc., 797 F2d 516, 519 (7th Cir 1986); In re McGaughey, 24 F3d 904, 907 (7th Cir 1994); Wright, § 2983 at 22-25 (cited in note 4).

⁷ Resolution Trust Corp. v Fountain Circle Associates Ltd. Partnership, 799 F Supp 48, 50 n 1 (ND Ohio 1992) (citing Advisory Committee Note on the 1948 amendment to FRCP 66).

⁸ Id.

⁹ Id at 49-50 (quoting Gordon v Washington, 295 US 30, 38, 55 S Ct 584, 588 (1935)). See also Commodities Futures Trading Com. v Comvest Trading Corp., 481 F Supp 438, 441 (D Mass 1979); Bookout, 395 F Supp at 1341; SEC v Republic Natl Life Ins. Co., 378 F Supp 430, 438 (SD NY 1974); Wright, § 2983 at 21 (cited in note 4).

¹⁰ Resolution Trust Corp., 799 F Supp at 50.

¹¹ 28 USCA § 959(b)(1993), which states as follows:

A trustee, receiver or manager appointed in any case pending in any court of the United States, including a debtor in possession, shall manage and operate the property in his possession as such trustee, receiver or manager according to the requirements of the valid laws of the state in which such property is situated, in the same manner that the owner or possessor thereof would be bound to do if in possession thereof.

¹² Resolution Trust Corp., 799 F Supp at 50-51, citing Wright, § 2983 at 22-24 (cited in noted 4).

¹³ See also Aviation Supply Corp., 999 F2d at 316; New York Life Ins. Co., 755 F Supp at 290; Campbell v Pennsylvania Indus., Inc., 99 F Supp 199, 204 (D Del 1951); Chase Manhattan Bank, 683 F2d at 26; Kristoff v Lenell, 1985 WL 1716 (ND Ill), *6 n 5; Wright, § 2983 at 28-30 (cited in note 4); 59 CJS Mortgages § 657 (West, 1949).

¹⁴ Resolution Trust Corp., 799 F Supp at 52.

¹⁵ 1992 WL 73539 (ND Ill).

¹⁶ 735 ILCS S/15-1101 et seq (1992).

¹⁷ 440 us 715,99 s ct 1448 (1979).

¹⁸ See also United States v Yazell, 382 US 341, 346-47, 86 S Ct 500, 503-04 (1966); Resolution Trust Corp. v Bayside Developers, 817 F Supp 822, 827-28 (ND Cal 1993); United States v Stump Home Specialties Mfg., Inc., 905 F2d 1117, 1119 (7th Cir 1990); Georgia Power Co. v Sanders, 617 F2d 1112, 1124 (5th Cir 1980); Powers v United States Postal Service, 671 F2d 1041, 1043 (7th Cir 1982); United States v Pastos, 781 F2d 747, 752 (9th Cir 1986); In re Armstrong Glass Company, Inc., 502 F2d 159, 163 (6th Cir 1974); United States v Smith, 479 F Supp 804, 805 (ND Ga 1979).

¹⁹ 735 ILCS 5/15-1701(b)(2) (1992).

²⁰Federal Home Loan Mortgage Corp., 1992 WL 73539 at *2. See also Home Life Ins. Co. v Am Natl Bank and Trust Co., 777 F Supp 629, 631-32 (ND Ill 1991); Federal Home Loan Mortgage Corp. v Dearborn Street Building Ass’n, 1991 WL 18431 (ND Ill), *2; Resolution Trust Corp. v Am Natl Bank of Chicago, 1991 WL 128683 (ND Ill), *1.

²¹ Federal Home Loan Mortgage Corp., 1992 WL 73539 at *6 nl; Wright, § 2983 at 30 (cited in note 4); Dunaway, § 16.03[2][a] and [b] at 16-5 and 16-6 (cited in note 3).

²² 28 USCA § 458 (1993); 18 USCA § 1910 (1993).

²³ 28 USCA § 957 (1993). See United States v Jacobs, 187 F Supp 630, 640 (D Md 1959), aff’d 298 F2d 469 (4th Cir 1961).

²⁴ 28 USCA § 958 (1993).

²⁵ See Wright, § 2983 at 25-26, and cases cited therein (cited in note 4). Local district court rules may also impose requirements on receivers. See, for example, US D Ct Rules ND Ill, Civ Rule 9 (providing procedural rules for application for appointment of receivers, filing of inventories and current reports, and administration of estates by receivers).

²⁶ 28 USCA § 754 (1993); Wright, § 2982 at 16-17 (cited in note 4).

²⁷ 28 USCA § 959(a) (1993).

²⁸ See Gaskill v Gordon, 27 F3d 248, 251 (7th Cir 1994); Cagan v Mutual Benefit Life Ins. Co., 28 F3d 654, 655-56 (7th Cir 1994); Federal Sav. & Loan Ins. Corp. v PSL Realty Co., 630 F2d 515, 521 (7th Cir 1980), cert denied 452 US 961,101 S Ct 3109 (1981).

²⁹ 28 USCA §§ 754 and 959 (1993).

³⁰ See, for example, Arkansas Louisiana Gas Co. v Kroeger, 303 F2d 129, 132 (5th Cir 1962), cert denied 371 US 887, 83 S Ct 183 (1962); Resolution Trust Corp., 799 F Supp at 51; Wright, § 2983 at 27 n59 (cited in note 4).

³¹ See United States v Mansion House Center North Redevelopment Co., 419 F Supp 85, 87 (ED Mo 1976); Resolution Trust Corp., 799 F Supp at 49; Bookout, 395 F Supp at 1342; Haase v Chapman, 308 F Supp 399, 406 (WD Mo 1969); United States v O’Connor, 291 F2d 520, 524 (2d Cir 1961); United States v Lanniello, 824 F2d 203, 207 (2d Cir 1987); Wright, § 2983 at 22-24 (cited in note 4).

³² Black’s Law Dictionary 970 (West, 6th ed 1990). Under the IMFL, unknown owners and non record claimants are permissive rather than necessary parties, but if they are not joined any disposition of the mortgaged real property will not be binding on them. 735 ILCS 5/15-1501(a) and (b) (1992). Any unknown owner may be made a party in accordance with § 2-413 of the Illinois Code of Civil Procedure. 735 ILCS 5/15-1501(c) (1992); 735 ILCS 5/2-413 (1992).

³³ 555 F Supp 1026 (ND Ill 1983).

³⁴ Although the seventh circuit has not ruled on this issue, there have been several reported and unreported decisions issued by the Northern District of Illinois. See Home Sav. of America v Am Natl Bank and Trust Co. of Chicago, 762 F Supp 240, 243 (ND Ill 1991); Metropolitan Life Ins. Co. v LaSalle Natl Bank, 1990 WL 71301 (ND Ill), *1; Ozark Financial Corp. v Faletti, 1985 WL 4244 (ND Ill), *1; Gov’t Employees Union v Buggs, 1985 WL 2237 (ND Ill), * l. See also Wolf v A. H. Robins Co., Inc., 614 F Supp 1205, 1206 (N D III 1985); Fifty Associates v Prudential Insurance Co. of America, 446 F2d 1187, 1191 (9th Cir 1970); Redcross v County of Rensselaer, 511 F Supp 364, 373 (ND NY 1981); Weeks v Benton, 649 F Supp 1297, 1298 (SD Ala 1986); Taylor v Federal Home Loan Bank Board, 661 F Supp 1341,1350 (ND Tex 1986); Blankenberg v Commercial Ins. Co., 655 F Supp 223, 225 (N D Cal 1987).

³⁵ 568 F Supp 515 (ND Ill 1983).

³⁶ Id at 516. See also Navarro Sav. Ass’n v Lee, 446 US 458, 460-61, 100 S Ct 1779, 1781-1782 (1980); J.I.K. Realty Corp. v Steward, 1989 WL 165114 (ND Ill), *5. But see Carden v Arkoma Associates, 494 US 185, 195, 110 S Ct 1015,1021 (1990).

³⁷ John Hancock Realty, 568 F Supp at 515 nl.

³⁸ 765 F Supp 429 (ND Ill 1991).

³⁹ Interests of unidentified nonrecord claimants may be terminated under the IMFL upon filing an appropriate affidavit with the clerk of the court and properly publishing a notice of foreclosure addressed to "Nonrecord Claimants." 735 ILCS 5/15-1502(c) (1992).

⁴⁰ BancBoston Mortgage Corp., 765 F Supp at 430.

⁴¹ See, for example, General Electric Credit Corp. v Am NatI Bank & Trust Co. of Chicago, 562 F Supp 456, 457-59 (ND Ill 1983); Home Sav. of America, 762 F Supp at 242; FRCP 19(a) (which requires joinder of parties who would be impeded in protecting their interests by a disposition of the action in their absence).

⁴² See BancBoston Mortgage Corp., 765 F Supp at 431; General Electric Credit Corp., 562 F Supp at 458.

⁴³ 735 ILCS 5/15-1507(b) (1992). If specifically sought in the foreclosure complaint or by separate motion, the official or other person to conduct the foreclosure sale may be other than the one customarily designated by the court. 735 ILCS 5/15-1506(f)(3) (1992).

⁴⁴ 55 ILCS 5/4-5001 and 5/4-12001 (1992). The practice of having a special commissioner appointed to conduct a foreclosure proceeding in Illinois, as permitted by 735 ILCS 5/15-1506(f)(3) (1992), is becoming more frequent because the sale can be conducted efficiently for a cost of $200-$300 (or approximately one-half of the fee charged by the County Sheriff’s Department).

⁴⁵ BancBoston Mortgage Corp., 765 F Supp at 429-30. See also In re Fitch, 102 Bankr 139, 140 (Bankr ND Ill 1989); 735 ILCS 5/15-1506(f)(3) (1992).

46 Ind Code 33-17-2-3 (1993).

⁴⁷ Id.

⁴⁸ Ind Code 32-8-16-1 (b) (1993).

⁴⁹ BancBoston Mortgage Corp., 765 F Supp at 430. See also In re Fitch, 102 Bankr at 140.