As the nation has struggled financially due to the shutdown caused by the COVID-19 outbreak, the federal government placed a freeze on foreclosure and eviction proceedings by Fannie Mae, Freddie Mac, and other government agencies. Many of the country’s leading mortgage lenders and banks also announced programs designed to assist homeowners facing difficulties making their mortgage payments.

The specifics of the programs offered by the various lenders can vary widely, as not all institutions can afford to go very long without payments from their borrowers. Such inconsistencies have left many homeowners still worried about what will happen in the next few weeks and months. With this in mind, lawmakers in Illinois are working to pass a bill that would offer relief to renters, homeowners, and lenders before the new month begins.

Bill Would Suspend Rent and Mortgage Payments

Last Friday, Representative Delia Ramirez (D-Chicago) introduced the COVID-19 Emergency and Economic Recovery Renter and Homeowner Protection Act. “We have to make housing an absolute top priority,” Ramirez said. She expressed that families should not have to choose between keeping a roof over their heads or buying food.

If you are behind on your mortgage payments, you know just how stressful it can be. You may end up losing sleep because you are worried about what will happen to your home. If you owe more on the home than it is worth, you may be a risk of foreclosure. In situations like these, one option that many people find preferable to foreclosure is a short sale.

During a short sale, a home is sold for less than what the owner owns on the home. Additionally, the lender generally agrees to accept less than the amount owed by the borrower by means of a the short sale. This option comes with certain advantages, as well as some disadvantages. If you are concerned that your home may be foreclosed on, a qualified foreclosure lawyer can help you determine whether or not a short sale may be right for you.

Short Selling to Avoid Foreclosure

Research shows that approximately one in every 1,380 Illinois homes is foreclosed on. Foreclosure can be an extremely stressful and embarrassing process to endure. Although foreclosure can happen to anyone, many people feel a great deal of shame regarding foreclosure. The greatest benefit of a short sale is that it can allow you to avoid foreclosure. When a you have a foreclosure in his or her credit history, you will not be eligible for another mortgage for a minimum of seven years. However, this waiting period may be as short as two years if the home is sold through a short sale.

Evaluating the legality and validity of your home loan documents is a critical first step in the foreclosure process. During the housing boom, many mortgage lenders cut corners and failed to properly comply with securities laws in their pursuit of maximizing profits during the boom. If you have received a notice of foreclosure, your loan documents should be reviewed and evaluated for legitimacy by legal counsel as soon as possible.

Lenders And Banks Originated Invalid Documents

At the height of the boom, many lenders were doing so much business, so quickly, that what resulted were work process failures that caused invalid loan documents to be originated and issued to consumers and other lenders. Potential cases of lender misconduct include robo-signing, predatory lending, inaccurate documentation and defective transfers.

Robo-Signing Paperwork

Robo-signing is the practice of documents being signed and notarized by a computer. Unfortunately for the banks, in the case of mortgage documents robo-signing is illegal. By law, mortgage documents must be signed by an actual person, not a computer program. Additionally, mortgage documents must be witnessed and signed in front of a notary.

As efforts continue to halt the spread of the coronavirus, millions of Americans have been prevented from going to work as usual. Some are able to work from home and maintain at least some level of income, but many more do not have the opportunity or ability to do so. This means that in addition to the fears associated with contracting the virus itself, many families also fear the reality of not being able to pay their bills. To address such fears, President Trump issued an order this past weekend that effectively halts foreclosure and eviction proceedings for a large number of American families.

Freezes and Forbearance Options

On Saturday, March 21, Housing and Urban Development Secretary Ben Carson announced that the president ordered the “immediate cessations” of evictions and foreclosures. The order was intended to help the millions of Americans who might soon be struggling to make their rent and mortgage payments.

As a part of the order, several federal agencies said they were freezing foreclosures and evictions for at least 60 days. These agencies include the Department of Housing and Urban Development (HUD), the Federal Housing Finance Agency (FHFA), and the U.S. Department of Agriculture (USDA). In addition, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, more commonly known as Fannie Mae and Freddie Mac, respectively, have instituted moratoriums on foreclosures, as well as forbearance options for those affected by the coronavirus pandemic.

There is no question that it can be extremely scary to face an imminent foreclosure. If you are substantially behind on your mortgage, you probably know that foreclosure is a possibility, but things will get all too real when you receive notice that your lender has initiated foreclosure proceedings. Unfortunately, the seriousness of the situation leads many homeowners to become overwhelmed—which often leads to avoidable mistakes. A qualified foreclosure defense lawyer can help you avoid some of the most common mistakes and protect your family’s future.

Mistake #1: Ignoring Notices

Perhaps the biggest mistake that you could make if you are delinquent on your mortgage is to ignore attempts at communication by your lender. Your lender will most likely call and send notices in the mail as soon as you miss a single payment. You might be embarrassed by your situation, but avoiding communication will not get you anywhere. There is a good chance your lender has options available for rehabilitating your loan or other avenues to help you avoid foreclosure altogether.

Mistake #2: Giving Up Immediately

Many homeowners believe that once their lender initiates foreclosure proceedings, they will automatically forfeit their home. This is simply not true. In Illinois, all foreclosures are handled through the court system, which can be notoriously slow. In the meantime, you and your attorney can continue negotiating with your lender to resolve the situation. You might not have as many options as you did before the lender filed, but you will have still have the chance to work things out and keep your home.