Ramona Milam v. Selene Finance, Lp

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 25-1208
R AMONA M ILAM ,
Plaintiff-Appellant,
v.
S ELENE F INANCE, LP,
Defendant-Appellee.
____________________
Appeal from the United States District Court for
the Northern District of Illinois, Eastern Division.
No. 1:24-cv-00317 — Virginia M. Kendall, Chief Judge.
____________________
A RGUED O CTOBER 27, 2025 — DECIDED D ECEMBER 22, 2025
____________________
Before EASTERBROOK, R OVNER , and S CUDDER , Circuit
Judges.
S CUDDER , Circuit Judge. Ramona Milam is an Illinois home-
owner who took out a mortgage loan. Selene Finance acts as
the loan servicer, collecting her mortgage payments on behalf
of the lender. When Milam missed payments in 2023, Selene
sent her a letter threatening the possibility of acceleration and
foreclosure if she did not cure her default within 35 days.
Milam alleges that, because a federal regulation and its own

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2 No. 25-1208
internal practices prevented Selene from acting on the dead-
line, the letter amounted to a threat intended to panic her into
prompt payment. After making a payment, Milam sued Se-
lene in federal court, alleging that the misleading letter vio-
lated the Fair Debt Collection Practices Act and Illinois law.
The district court dismissed her claims, finding that Selene
was the lender’s assignee and thereby entitled under the orig-
inal mortgage to notice and an opportunity to cure prior to
Milam’s lawsuit. Because Milam’s complaint does not resolve
whether Selene was an assignee under Illinois law, we return
the case to the district court for further proceedings.
I
A
In 2005 Ramona Milam obtained a loan to purchase her
Illinois home. To secure the loan, she executed a mortgage in
favor of the original lender, HSBC Mortgage Services, Inc.
Selene Finance has serviced Milam’s loan since 2021. The
servicing occurs pursuant to a contractual relationship either
directly with the current holder of the mortgage or with an-
other loan servicing company. In either case, a contract sepa-
rate and apart from the mortgage defines the nature and
scope of Selene’s servicing rights. As the loan servicer, Selene
collects Milam’s mortgage payments as they become due and
distributes them to the lender.
In 2023 Milam fell behind on her mortgage payments. On
April 17, when her payment was 47 days overdue, Selene sent
a letter notifying Milam of her default and the amount due to
cure. The letter also included this paragraph:
The total amount you must pay to cure the de-
fault stated above must be received by

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No. 25-1208 3
05/22/2023. Failure to cure the default on or be-
fore the date specified may result in acceleration
of the sums secured by the Security Instrument,
sale of the property and/or foreclosure by judi-
cial proceeding and sale of the property.
May 22 was 35 days after the date of the letter. Adding those
35 days to the 47 days that had already elapsed, the letter of-
fered Milam a grace period of 82 days of delinquency before
facing the consequences identified in Selene’s letter.
Milam reacted by promptly making a mortgage payment.
But she then sued Selene on behalf of herself and other Illinois
homeowners who received similar letters when their mort-
gage loans became at least 45 days delinquent. Milam alleged
that Selene’s letters violated the Fair Debt Collection Practices
Act and the Illinois Consumer Fraud and Deceptive Business
Practices Act. She also brought a state law claim for negligent
misrepresentation.
Each claim relies on the same theory of alleged wrongdo-
ing. Milam maintains that Selene—in part due to a federal
regulation and in part due to internal practice—will never ac-
celerate or foreclose on a mortgage loan unless it becomes at
least 120 days delinquent. So, by Milam’s account, when Se-
lene’s letters tell mortgagors they have 35 days to pay or face
acceleration and foreclosure, they are threatening conse-
quences on an invented and artificial timeline that Selene can-
not and will not enforce. Milam contends that the false scare
often has the intended effect of spurring payment and
amounts to an abusive collection practice.

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4 No. 25-1208
B
Selene moved to dismiss Milam’s complaint, invoking a
provision in the underlying mortgage that requires the lender
and the borrower to provide each other with notice and a
“reasonable period … to take corrective action” before com-
mencing most judicial actions. Selene claimed that, as the loan
servicer, it stands as an assignee of the lender and thereby has
contractual authority to enforce the provision. Both parties
agree that Milam did not provide notice before suing Selene.
The district court saw things Selene’s way and granted its
motion to dismiss. The court concluded that as a matter of Il-
linois law, which governs the mortgage, Selene was an as-
signee of the lender and therefore able to invoke the lender’s
contractual protections. Because Milam brought suit against
Selene without first complying with the mortgage’s notice
and cure provision, the agreement barred her claims. Milam’s
two state law claims likewise failed because she did not plead
any pecuniary loss.
This appeal followed.
II
As this case came to us, we questioned whether Milam had
alleged a concrete injury sufficient to establish Article III
standing. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992);
see also Pierre v. Midland Credit Mgmt., Inc., 29 F.4th 934, 938–
39 (7th Cir. 2022) (collecting cases applying the concrete injury
requirement to FDCPA claims). After all, Selene’s letter
prompted her to make a payment that both sides agreed she
owed and was overdue.
Milam’s briefing broadly referred to the “time-value of
money” when trying to identify the hardship of paying earlier

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No. 25-1208 5
than she otherwise would have. While we understand the fi-
nancial principle, its invocation here struck us as opaque—
missing clear grounding in the alleged facts of Milam’s com-
plaint. We questioned the parties on this point at oral argu-
ment, pressing Milam to give greater content to the actual
harm she suffered from making a mortgage payment when
she did.
We then directed the parties to submit supplemental brief-
ing addressing standing. Our order pointed Milam to 28
U.S.C. § 1653, which states that “[d]efective allegations of ju-
risdiction may be amended, upon terms, in the trial or appel-
late courts.” See Morgan v. Fed. Bureau of Prisons, 129 F.4th
1043, 1048–49 (7th Cir. 2025) (reasoning that § 1653 covers de-
fective allegations of standing). A party may seek to use
§ 1653 to redress “incorrect statements about jurisdiction that
actually exists,” Newman-Green, Inc. v. Alfonzo-Larrain, 490
U.S. 826, 831 (1989), giving Milam a path to respond further
to our concerns. See Chandler v. Miller, 520 U.S. 305, 313 n.2
(1997) (citing § 1653 to support relying on petitioner’s factual
representation at oral argument to defeat mootness).
Milam has taken up our suggestion, and her supplemental
briefing moves under § 1653 to add allegations to her com-
plaint that clarify how her accelerated payment (made in re-
sponse to Selene’s April 17, 2023 letter) resulted in concrete
injury. We grant her motion and proceed to consider her
amended operative complaint, which functionally now in-
cludes the factual allegations in Milam’s § 1653 motion.
Two parts of Milam’s additional allegations combine to as-
sure us that she has standing. First, she explains that interest
was not accruing on her mortgage loan due to her late pay-
ment, so she avoided no added interest expense by paying

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6 No. 25-1208
before Selene could legally force her hand. Second, she fills in
more facts about how she would have otherwise used the
money. Specifically, she tells us that she borrowed funds to
cover health insurance premiums and that she incurred over-
draft fees on her bank account as a result of withdrawing
money to pay for necessary items like food and utilities. Alto-
gether, Milam’s complaint now says enough about how she
suffered monetary harm by “act[ing] to her detriment” based
on the deadline in Selene’s letter. Brunett v. Convergent Out-
sourcing, Inc., 982 F.3d 1067, 1068 (7th Cir. 2020). With the ben-
efit of her motion under § 1653, we are confident that Milam’s
complaint establishes standing.
For clarity of the record, Milam may wish to file an
amended complaint in the district court on remand. We leave
this to the discretion of the district court. Milam’s supple-
mental allegations also will require the district court to revisit
its dismissal of her state law claims.
With our jurisdiction secure, we turn to the merits.
III
The question before us is narrow and one of Illinois law: is
Selene Finance an “assign” of the lender under the terms of
Milam’s mortgage?
Two provisions of the mortgage combine to show why it
matters whether Selene is an assignee. Start with the notice
and cure provision, which provides:
Neither Borrower nor Lender may commence,
join, or be joined to any judicial action (as either
an individual litigant or the member of a class)
that arises from the other party’s actions pursu-
ant to this Security Instrument or that alleges

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No. 25-1208 7
that the other party has breached any provision
of, or any duty owed by reason of, this Security
Instrument, until such Borrower or Lender has
notified the other party (with such notice given
in compliance with the requirements of Section
15) of such alleged breach and afforded the
other party hereto a reasonable period after the
giving of such notice to take corrective action.
This provision expressly imposes preconditions to filing suit
on the “Borrower” and “Lender,” as defined in the mortgage.
But additional language expands the provision’s meaning
and scope: “The covenants and agreements of this Security
Instrument shall bind (except as provided in Section 20) and
benefit the successors and assigns of Lender.”
Selene seeks to enforce the benefit of the notice and cure
provision as an assignee of the lender’s servicing rights under
the mortgage. For her part, Milam disagrees that any assign-
ment has taken place. The mortgage leaves the term “assign”
undefined, so we look to Illinois law for direction.
In Illinois, “[a]n assignment occurs when ‘there is a trans-
fer of some identifiable interest from the assignor to the as-
signee.’” Cincinnati Ins. Co. v Am. Hardware Mfrs. Ass’n, 898
N.E.2d 216, 229–30 (Ill. App. Ct. 2008) (quoting Brandon Ap-
parel Group v. Kirkland & Ellis, 887 N.E.2d 748, 756 (Ill. App.
Ct. 2008)). An assignment transfers to the assignee “all the
right, title or interest of the assignor in the thing assigned.” Id.
at 230 (citation omitted). In short, “an assignment puts the as-
signee into the shoes of the assignor.” Collins Co., Ltd. v. Car-
boline Co., 532 N.E.2d 834, 839 (Ill. 1988).

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8 No. 25-1208
But assignment is not the only third-party interest recog-
nized by Illinois law. In particular, the Supreme Court of Illi-
nois has recognized both assignment and delegation. “Unlike
an assignment, which involves only a transfer of rights, a del-
egation involves the appointment of another to perform one’s
duties.” Olson v. Etheridge, 686 N.E.2d 563, 567 (Ill. 1997). This
distinction seems intuitive: tasking another person with tak-
ing actions on your behalf “is not the same as the intent to
permanently alienate or transfer an ownership interest.” Ey-
chaner v. Gross, 779 N.E.2d 1115, 1134 (Ill. 2002).
Consider this helpful example from the Supreme Court of
Illinois. “[A]n apartment building owner directs her property
manager to manage the building with discretion to make de-
cisions concerning building maintenance and finances.” Id.
Add in the responsibility of collecting rent due under the ten-
ants’ leases. This arrangement, the State’s Supreme Court has
explained, would be a “delegation of these duties” that “does
not alienate the same rights from the owner, who can always
step in and make decisions on her own relating to those mat-
ters.” Id.
With these principles in mind, we conclude that Selene
cannot show on the pleadings alone that it is an assignee un-
der Milam’s mortgage. See Marcure v. Lynn, 992 F.3d 625, 631
(7th Cir. 2021) (interpreting Rule 12(b)(6) as “requiring the
movant to show entitlement to dismissal”). It is clear from the
complaint and incorporated documents that the lender has
authorized Selene to act on its behalf, including by collecting
mortgage payments from Milam. But Illinois law precludes
us from equating this authorization with assignment. Selene’s
servicing contract is not in the record as it presently stands,
and we cannot rule out the possibility that the lender, like the

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No. 25-1208 9
property owner in the example supplied by the Supreme
Court of Illinois, has merely delegated the performance of cer-
tain contractual duties to Selene.
Put most simply, we cannot resolve on the pleadings that
Selene, as a mortgage loan servicer, is an assignee as a matter
of Illinois law. See Bayview Loan Servicing, L.L.C. v. Nelson, 890
N.E.2d 940, 944 (Ill. App. Ct. 2008) (concluding that a loan ser-
vicer, Bayview, was not a mortgage lender’s assignee because
there was “no evidence that Bayview ever obtained any legal
interest in the subject property” and “[a]t most, the record in-
dicate[d] that the [current lender] relied upon Bayview to ser-
vice the mortgage payments”). The case needs further analy-
sis in the district court, informed not only by Illinois law, but
also by Selene’s servicing agreement.
For these reasons, we REVERSE and REMAND.

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