Foreclosure is different from state to state. Some states use what is called a "judicial foreclosure" (this is what we have in Illinois), while others use what is known as "non-judicial foreclosure" or "statutory foreclosure". For purposes of this article, I will be focusing on the Illinois mortgage foreclosure process.
As an attorney practicing in Chicago, Illinois, I regularly deal with the judicial foreclosure process in Illinois - particularly in Cook County and the collar counties surrounding Chicago. In Illinois, we have a law called the Illinois Morgage Foreclosure Law ("IMFL") which governs the manner in which a mortgage lender (a/k/a lien holder, mortgagee, bank) is able to foreclose on a mortgage. I won't bore you with the intricate details about the law - leave that to the lawyers. As a homeowner who might be facing foreclosure, this is what you need to know.
TIMELINE FOR A FORECLOSURE IN ILLINOIS
- The process begins when you fall behind on your mortgage payments (or in some cases, where the mortgage company makes an accounting mistake).
- You will start to receive phone calls and letters from your bank or third party companies that work for the bank (mortgage servicing companies/debt collection agencies - people in call centers).
- GRACE NOTICE: After falling behind 30-90 days, you will receive a letter from your mortgage company, this letter is required under Illinois Law. It will inform you that you have 30 days to come current on your loan or the mortgage company will file a foreclosure lawsuit against you.
- Note: that this letter will come regular U.S. mail and looks relatively innocuous. THEY MUST SEND IT BEFORE THEY FILE A FORECLOSURE SUIT AGAINST YOU
- LAWSUIT: At this point, you are probably about 90 days delinquent on your loan payments. The case has been referred to local attorneys who will handle filing the lawsuit against you.
- You will soon be served with a summons to appear in court. If you have not already sought local counsel, this is the time to get on the phone.
- Note: Illinois recently passed a law specifically regarding defendant-homeowners in mortgage foreclosure law suits. (see the next lines).
- If you appear in court even once you may waive defenses to your foreclosure case.
- If you file one paper in court, you may waive defenses to your foreclosure case.
- Please call an experienced foreclosure attorney before you go to court.
- We have come to a fork in the road. You can choose to fight your foreclosure (either on your own, or with the help of legal counsel), or you can choose to ignore this lawsuit.
- OPTION 1: DO NOTHING
- If you do nothing, the attorneys for the bank will obtain a judgment of foreclosure against you.
- This will happen about 2-4 months after you were served with the summons and complaint.
- Note: This could be longer or shorter depending on which county your property is in.
- Typically about 3 months after judgment, the bank (through its attorneys) will put the property up for sale at auction.
- 30-45 days after sale, the bank will come back into court and ask the judge to confirm the sale of the property.
- You (as the former owner) have 30 days from the confirmation date to vacate the premises. The new owner has a legal right to occupancy.
- TOTAL TIME FROM COMPLAINT TO CLOSE: 6-9 MONTHS.
- OPTION 2: FIGHT THE FORECLOSURE SUIT
- The first thing you should do when you get served with a lawsuit is call an attorney. If you don't know an attorney, call your local bar association.
- Your attorney will file documents on your behalf with the court to defend the foreclosure lawsuit.
- On average, the effect of raising appropriate defenses and filing the correct documents with court, will extend a foreclosure case by 12-18 months (in addition to the 6-7 months it normally takes).
- Additionally, many counties are now offering mediation programs for homeowners facing foreclosure. These programs can be great tools if you know how to navigate them.
- TOTAL TIME FROM COMPLAINT TO CLOSE: 24-30 MONTHS.
THE BOTTOM LINE
Most people will only ever face foreclosure one time. They are not familiar with the process because it is long, complicated and unfamiliar. In most cases, the cost of consulting an attorney is far less than the cost of going through a foreclosure alone. Beyond the monetary value of hiring an attorney, there is additional value that the homeowner can receive.
By hiring a professional, a homeowner gains the following:
- Knowledge about the process through each step of the case.
- Well-informed opinion about options for the homeowner.
- Loss Mitigation (i.e. Loan modifications, short sales, deeds-in-lieu)
- Is mediation right for you?
- Where will you go next, what is the timeline for MY case?
- A stringent legal defense, ensuring the bank respects your rights as a consumer.
- Protection from harassing calls from mortgage company debt collectors.
- Peace-of-mind knowing that a professional is representing your interests.