In March of this year, the U.S. Department of Housing and Urban Development (HUD) issued a moratorium on foreclosures for all single-family mortgages insured by the Federal Housing Administration (FHA). The moratorium was in response to the anticipated financial effects of the COVID-19 pandemic on households across the country. The move was shortly followed by a similar directive from the Federal Housing Financial Agency (FHFA), which ordered the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Company (Freddie Mac) to suspend foreclosures for at least 60 days.

Shortly thereafter, federal lawmakers passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide financial assistance to millions of American families. In the months that followed, the foreclosure moratoriums were extended several times. Though they are set to end on August 31, 2020, in Chicago, Gov. Pritzker has extended the moratorium to last an additional 30 days. However, the financial assistance offered by the CARES Act already expired earlier this month, leaving many Illinois residents wondering if there is any other help available.

Lake County Offers Renters’ Assistance

For those who rent their homes, several agencies in Lake County have established programs to provide assistance with rent, food, and utility bills. Community Partners for Affordable Housing and other groups say that their programs are open to county residents who have been financially affected by the pandemic. Those who have lost their job, have reduced income, or unexpected expenses related to COVID-19 are allowed to apply, though income and savings limits could affect an applicant’s eligibility for aid. For those who are approved for rent assistance, the funds are paid to their landlords directly.

Even if you have never owned your own home before and do not have a track record of missed payments, the failure to make mortgage payments will eventually lead your lender to file for foreclosure. Foreclosure is the legal process through which a lender can seize a home from a borrower who has failed to live up to his or her obligations set forth by the mortgage agreement. While there are other violations that could lead to foreclosure, the overwhelming majority of foreclosure filings are prompted by the borrower failing to make payments.

The foreclosure process can be intimidating and extremely challenging for the average homeowner. It is very easy to make mistakes under such confusing circumstances, and a single error could end up costing you thousands of dollars. If you are behind on your mortgage, and foreclosure is looming, be sure to avoid these common mistakes that many homeowners make.

Mistake 1: Avoiding Your Lender

According to Illinois law, a mortgage lender must wait until you are 120 days or more delinquent on your mortgage to initiate foreclosure proceedings. However, the lender will most likely begin calling you and sending letters as soon as you miss a payment. Communication will probably increase as you get closer to being in default. While it may be uncomfortable to do so, you need to pick up the phone and talk with your lender. Doing nothing is not in your best interest. In most cases, your lender will have programs available that could allow you to work things out and avoid foreclosure altogether.

Falling behind on your mortgage payments is stressful for anyone. The thought of foreclosure looming is not a situation that any homeowner chooses to be in. The foreclosure process is handled through the court system, which means you can fight it. There are legal defenses that can be presented to help you keep your home. However, it is a complicated process. That is why you need an Illinois foreclosure defense attorney to represent you. Depending on your circumstances, one or more defenses may be available to you. Below are some common arguments that may be applicable to your foreclosure case.

Statute of Limitations Has Passed

Has it been a long time since you stopped making payments to when the mortgage lender started the foreclosure? There is a chance the statute of limitations has passed. Your attorney will be able to tell you whether the deadline has passed or not by looking further into the details of your case.

The Foreclosure Party Cannot Prove Legal Standing

The only party who can bring a foreclosure case is the loan owner. If he or she cannot prove the loan, then there is no legal standing. It is a common procedure for banks to sell loans over and over during the life of your mortgage. Determining the rightful loan owner can be challenging for the bank.

When purchasing a condominium, you need to be aware of the various rules and regulations governing the condominium association. For example, if you fail to pay required condominium assessments or common expenses, the association can foreclose on your unit. And if you happened to be the person who buys a condominium at a foreclosure sale, you may also find yourself on the hook for the previous owner's unpaid expenses.

Appellate Court Determines Who is Responsible for Previous Costs

A recent case from Cook County, Shannon Court Condominium Association v. Armada Express, Inc., helps to illustrate how these issues work in practice. This case involves a condo building in Streamwood, Illinois, where the co-owners of a particular unit failed to pay over $5,000 in condo assessments. The condo association, Shannon Court, then filed a foreclosure action and obtained a final judgment evicting the owners in January 2018.

Shannon Court proceeded to rent the unit itself from August 2018 to December 2018. In December, the court approved a foreclosure sale, which was held in January 2019. A corporation, Armada Express, purchased the unit and took possession in March 2019.

Foreclosure is the legal process during which a home is sold to settle an unpaid mortgage debt. When a homeowner falls behind on his or her mortgage payments, the home may go into foreclosure, and the mortgage lender may seize the property. In Illinois, all foreclosures are “judicial” which means that the process is carried out through the court system. In other states, non-judicial foreclosures may be an option, but Illinois law only permits judicial foreclosures. The legal process of foreclosing on a home can take several months to several years in Illinois. If you are concerned that your home may go into foreclosure, talk to an experienced foreclosure attorney so that you can explore potential defenses.

When Does a Mortgage Servicer Initiate a Foreclosure?

Life can be unpredictable to say the least. When an unexpected illness, disability, job loss, or other financial hardship occurs, a homeowner may fall behind on his or her mortgage payments. A mortgage servicer cannot initiate foreclosure procedures simply because a borrower has missed one or two payments. However, when a borrower is over 120 days delinquent on their mortgage loan payments, the servicer may begin the foreclosure. A homeowner who has not been making payments will receive a “breach letter” that notifies him or her that he or she is in default on the mortgage loan. At this point, the homeowner should speak to a lawyer and start exploring alternatives to foreclosure such as a loan modification or short sale. If nothing is done to remedy the default, the servicer will officially begin foreclosure proceedings

Judicial Foreclosure Filing

In order for a mortgage servicer to be permitted to resell a home, the servicer must file a foreclosure lawsuit in court. Typically, a lender will file the petition for foreclosure documents in the circuit court of the Illinois county in which the property is located. However, the servicer also has the option to file the petition for foreclosure in federal court. Once the mortgage servicer files the foreclosure with the court, you will be personally served with a copy of the servicer’s complaint and a summons. You will be asked to file a response that notifies the court of whether or not you intend to object to the foreclosure. If you do not file a response within 30 days, a default judgment could be entered against you. This means that you automatically lose the case and the mortgage servicer is authorized to proceed with the sale of your home. This is why it is so crucial for anyone facing foreclosure to contact a quality attorney as soon as possible.