Illinois foreclosure law requires a judge to follow a number of steps before approving or confirming a property sale. One of these steps is to ensure that the mortgage lender or their representative has published a proper notice of the sale. Even in the Internet age, the law requires publication of this notice via newspaper advertisements. More precisely, the notice of sale must be published for three consecutive weeks in a “newspaper circulated to the general public in the county in which the real estate is located.” In counties with more than 3 million people–i.e., Cook County–the notice must be published in the township where the property is located.

Not All Defects Warrant a Reverse of Sale

An Illinois appellate court recently rejected a homeowner's attempt to undo the judicial sale of their property due to a technical failure to follow the notice requirement. The lender filed a complaint to foreclose on the mortgage in January 2010. The judgment itself was entered more than eight years later, in October 2018. In July 2019, the lender filed a notice of sale, which was published in the Chicago Daily Law Bulletin and the “Glenview Announcements,” the latter of which is published by the Chicago Tribune.

When a homeowner cannot afford to make his or her mortgage payments, the home may go into foreclosure. In short, this means the homeowner's mortgage lender takes possession of the home. However, this is not an instantaneous or even a quick process. The foreclosure process can take well over a year to complete in Illinois and early in the process, a homeowner has some options that can allow him or her to keep the home. 

In the state of Illinois, all foreclosures are judicial foreclosures, which means that the lenders must go through the courts to complete the foreclosure process. If your lender has filed a foreclosure action against you, or is preparing to do so, here are three ways that you can stop the proceedings and possibly remain in your home. 

Modify Your Mortgage Loan

One way to steer yourself away from foreclosure is to modify your mortgage loan so it becomes easier for you to make your monthly payments. This can be done by lowering the interest rate, lowering the amount of principal for the loan, or extending its term. Sometimes, the borrower can make a single balloon payment to cover his or her missed payments or add them to other payments through the loan's life to catch up.

Life can sometimes throw unexpected curve balls our way that prevent us from staying current on mortgage payments. Perhaps you or someone in your family has experienced a job loss, substantial increase in expenses, major health issue, or another surprising life event. Whatever the reason, being behind on mortgage payments can put an individual at risk of foreclosure. If you are facing a possible foreclosure, one option that may be right for you is a consent foreclosure.

What is a Deficiency Judgement?

Illinois law mandates that all foreclosures must go through the court system. The mortgage servicer may begin the foreclosure process when the borrower is four months or more behind on payments. If the homeowner cannot cure the default, the servicer will file a foreclosure lawsuit. If the lender wins the lawsuit, it has the authority to seize and sell your home. The difference between the amount you owe on your home and the home’s sale price is called a deficiency. Deficiencies can often be tens or even hundreds of thousands of dollars. The legal order requiring you to pay this difference is called a deficiency judgment.

Can a Consent Foreclosure Can Help Me Avoid a Deficiency Judgment?

If you want to avoid a stressful negotiations with the bank and a lengthy court process, you may be able to simply return the property to the bank and avoid a deficiency judgment through a consent foreclosure. An experienced real estate attorney can negotiate a consent foreclosure on your behalf. If the lender agrees to accept the consent foreclosure and waives the deficiency, you will be able to move on with your life without the burden of a costly deficiency judgment.

The real estate market is a complex combination of factors.  However, it generally reflects the overall economic health of the country. When the economy is healthy, the real estate market does well, but when economic growth slows, there is usually a corresponding slowdown in home sales and new mortgages. In such situations, foreclosures generally increase as well.

With all of this mind, a recent report indicates that the economy is likely to be doing well, as the number of properties in foreclosure around the country has dropped fairly substantially compared to the same time last year. In the greater Chicago area, defaults, foreclosure filings, and lender repossessions have also decreased.

A Look at the Numbers

Last month, ATTOM Data Solutions released the Midyear 2019 U.S. Foreclosure Market Report that tracked foreclosure activity throughout the United States for the first six months of 2019. The report found that just under 300,000 properties are in some stage of the foreclosure process, a drop of 18 percent compared to the mid-year report from 2019. This figure represents the lowest level of foreclosure activity in the last 12 years. The 2019 number is a staggering 82 percent decrease from the first half of 2010 in which 1.65 million properties had foreclosure filings.

For many homeowners, a loan modification request is much like a ride on a Ferris wheel. The lender offers assistance through HAMP or some other federal program, raising hopes and expectations. Then, the bank suddenly withdraws its offer, many times based on technical grounds, such as turning in documents a day or two late, a Debt To Income ration that is a few points too low or a Loan To Value ratio that is a few points too high. This rejection is followed swiftly by another assistance offer, and the wheel starts moving again.

All this time, the bank is generally not accepting partial payments, so the delinquency keeps getting higher and higher. Eventually, the Ferris wheel stops. The lender soberly declares that the delinquent amount is too high to be repaid. Foreclosure follows.

Chapter 13 Bankruptcy may offer distressed homeowners a way to get off the Ferris wheel and get on the tram that takes you where you want to go.