Illinois Court of Appeals Cracks Code of Silence on Who Pays Foreclosure Mills

The wording of the decision strongly suggests that whether the claimant is US Bank, Deutsch or BONY Mellon et al, the third party who is actually paying the lawyer must be disclosed — at least if the homeowner asks.

Given the nature of the role that the alleged Trustee plays — i.e., none except to give the appearance of institutional involvement — this decision opens the door not only to disclosure but to possibly answering the question of who is pretending to be the creditor.

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Hat tip Gregg DaGoose

Note that I endorse the reasoning here. The case should not used as authority as precedent except in the 1st District of Illinois. And of course the decision might further appealed.


We conclude that neither attorney-client privilege nor the Rules of Professional Conduct shield the identity of Steck’s third-party client, so affirm the judgment of the trial court and remand for further proceedings.

Relevant here, the citation requested “[a]ll documents evidencing any payments received by [Steck] or any others employed by [him] with respect to any representation of John Beckstedt [or When 2 Trade Group LLC] or by any other individual or entity acting on [their] behalf.” In addition, the citation requested “[a]ll documents evidencing any retainer received or held by No. 1-19-0012 – 3 – [Steck] or any others employed by or in partnership with [him] with respect to any representation of John Beckstedt [or When 2 Trade Group LLC] whether paid by [them] or by any other individual or entity acting on [their] behalf.” Steck, while noting and reserving some objections, denied having been paid by the debtors or anyone purporting to act on their behalf.

Steck responded that he had “no invoices, evidence of payment or other like records” because he had never billed or issued statements to Beckstedt or When 2 Trade. It was in this series of e-mails that Steck first asserted that “any information [he] ha[d] about [his] clients other than When 2 Trade and Beckstedt is privileged, including their identity.” [e.s.]

Attorney-client privilege “must be strictly confined within its narrowest possible limits.” (Internal quotation marks omitted.) People v. Radojcic, 2013 IL 114197, ¶ 41. Generally, the privilege does not protect a client’s identity. Cesena, 201 Ill. App. 3d at 104-05 (citing People v. Williams, 97 Ill. 2d 252, 295 (1983)). Two exceptions have been recognized: (i) where “the client will be prejudiced in ‘some substantial way’ if his identity were disclosed” (id. at 105 (quoting Williams, 97 Ill. 2d at 295)) and (ii) where protection would be in the public interest (id. (citing Shatkin, 128 Ill. App. 3d at 525); see also People v. Doe, 55 Ill. App. 3d 811, 815 (1977) (collecting cases)). The party asserting the privilege bears the burden of establishing that it applies. Shatkin, 128 Ill. App. 3d at 525.

plaintiffs cannot even attempt to put forward “some evidence” until they know the identity of the third party. Steck’s assertion of privilege as to his client’s identity has cut off the litigation before questions about plaintiffs’ evidentiary basis No. 1-19-0012 – 10 – could even be asked. Steck inserted the issue of attorney-client privilege into this case, and as the proponent of the privilege, he must show its application. [e.s.]

In Shatkin, the court recognized that a client’s identity is not protected by attorney-client privilege because “disclosure of the identity of an attorney’s client provides proof of the existence of the relationship, provides the opposing party with proof that his [or her] opponent is not solely a nominal party, and provides proof to the court that the client whose secret is treasured is actual flesh and blood.” (Internal quotation marks omitted.) Shatkin, 128 Ill. App. 3d at 525; see also Doe, 55 Ill. App. 3d at 814.

It follows then that requests could be made in discovery.

The first is whether the named claimant (e.g. US bank) has any retainer agreement with the foreclosure mill.  This is relevant to the issue of an award of fees in judicial foreclosure proceedings.

The second is “all documents evidencing any payments received by [foreclosure law firm] or any others employed by it with respect to any representation of [e.g. US Bank, BONY Mellon, Deutsch] or [e.g. Ocwen, SPS] or by any other individual or entity acting on [their] behalf.” In addition, the request for production should probably include “all documents evidencing any retainer received or held by [foreclosure law firm] or any others employed by or in partnership with it with respect to any representation of [e.g. US Bank, BONY Mellon Deutsch] whether paid by [them] or by any other individual or entity acting on their behalf.”

The third is possibly a subpoena making the same demand for discovery made to the alleged servicer and its predecessors. This is relevant to the issue of whether the named claimant is in fact the real party in interest or, as set forth in the defense narrative, is acting as a sham conduit or front for third party actors.

5 Responses

  1. Dan Schramm — contracted by WHO? You are right – servicer impersonating the trustee.

    RiccoPitts, – – I agree Republicans doing nothing. But, the fraud began with Clinton and Bush with deregulation, and it is under the Democrats that the fraud was covered up. Democrats not going to expose their own cover up.

    I don’t believe it is too late to expose. Think we will get there. But, who is the candidate that with help? Options are not good. Will have to do without them.

  2. The point being no REMIC or DST Trustee ever has anything to do with collecting mortgage payments, sending the default notice or foreclosing. It is a contracted servicer impersonating the trustee as the named plaintiff.

  3. Finally the truth is coming out, you say? I fear that we are already passed the point of no return. I don’t believe the American public can handle the truth nor do I believe that our courts will ever allow the whole truth and nothing but the truth to come out. We have a public who can’t pull themselves away from their cell phones even while they are walking.right off the cliff. Any hope of a public out cry is false hope. They are either too dumb to notice or could care less for the pain of others. As far as our courts go, my home state of Alabama set the record recently for the amount of cash that went into the campaign for our supreme court seats. If you don’t believe that all that money had major influence on the judges that was receiving it, then I’m sorry but you’re a fool. The bottom line is that wall street criminals have paid off our courts. While it is true that we still have many honest judges, they are being replaced daily by our republican leaders for more “business friendly judges”. It’s going to take a revolution to set things right and like I said we don’t have the people that are strong or wise enough to do it. So bend over and learn to like the screwing we the consumers are receiving from corporate American. We didn’t stand up for our rights or the rights of others so now they are gone. Gone with the wind and frankly Scarlett, nobody gives a damn.

  4. When asking Wells Fargo who was the suppose to be the lender of the VA loan they said they could not inform me who the “investor” was. My loan was in the Washington Mutual Bank Ginnie Mae MBS which after Sept 25, 2008, had no ownership of the debt because WaMu had been seized without the ability of the seized bank to sell the loans.

    Wells never held the ability to call the debt due per UCC9 as either they or Ginnie Mae purchased the debt, although Ginnie Mae was in physical possession of the blank endorsed Note per UCC3!

  5. Finally…. Drilling down to the truth. Now, hopefully the fraud on the court and all of U.S. is closer to the surface of public knowledge.
    Where is 60 minutes?

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