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Lake County foData shows that approximately one in every 2,453 homes in the United States will be foreclosed on at some point. The problem is even more serious in Illinois, where one in every 1,336 homes will be foreclosed on according to the current foreclosure rate. Having your home foreclosed on can be an absolutely devastating ordeal to endure. Unfortunately, many homeowners do not understand what their rights are when it comes to home foreclosure. They may assume that they “deserve” to lose their home because they have missed mortgage payments. However, mistakes are prevalent in the mortgage servicing industry, and some individuals facing a foreclosure may be the victim of such an error. If you have been threatened with foreclosure, you should know that there are several foreclosure defenses that could  help you keep your home.

Your Mortgage Servicer Made a Serious Error

Although many people do not realize it until it happens to them, mortgage servicers sometimes make huge oversights and errors. If you have been affected by one of the following mistakes, you may have a potential defense against foreclosure:

You were the victim of “dual tracking.” The term  dual tracking refers to a situation in which a mortgage servicer continues to foreclose on an individual’s home while also considering his or her application for a loan modification, short sale, deed in lieu of foreclosure, or other foreclosure avoidance option. Dual tracking used to happen all the time, but federal law now limits the circumstances in which a mortgage servicer can pursue foreclosure while simultaneously negotiating an alternative to foreclosure.

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Lake County foreclosure attorneysWhile the housing market has largely recovered from its most recent serious crash, many families still worry about money and how they will afford their mortgage payment every month. In some situations, money is always pretty tight, and in others, a serious accident or illness may upset the family’s financial stability. If you are struggling to pay your mortgage, you might have had someone suggest a “strategic default” as an option for you. Before you take any action, however, it is important to know what a strategic default is and what the consequences could be.

What Is a Strategic Default?

A strategic default refers to a situation in which a borrower intentionally allows his or her loan to default. The borrower deliberately falls behind on the loan as a financial strategy, not because he or she could not afford the payments. Strategic defaults are most often used when there is negative equity in the property in question. Negative equity means that the property is valued at less than the amount remaining on the mortgage loan.

Keep in mind that a strategic default is not the same thing as a consent foreclosure, though many people use the terms interchangeably. A strategic default applies to the status of the loan itself, while a consent foreclosure refers to one possible outcome of defaulting on your loan. It is possible—and it may even be your best option—to strategically default on your loan first, and then work out a consent foreclosure agreement with your lender.

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Lake County foreclosure lawyersThe 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.

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Lake County foreclosure defense attorneyIf you have fallen behind on your mortgage payments to the point where you are in default on your loan, you may be facing the possibility of a foreclosure. You probably know that if your lender forecloses on your home loan, the house will be sold and the proceeds of the sale will go to the lender. Meanwhile, you will be left with no place to live and a serious mark on your credit history.

The reality is that many people who are facing foreclosure also have a large amount of other debt as well. Such debts often include credit card balances, medical bills, personal loans, and student loans. In cases like these, it is not uncommon for a person to begin thinking about filing for bankruptcy under Chapter 7 of the United States Bankruptcy Code. Filing for Chapter 7 bankruptcy could help you avoid foreclosure in certain situations, and experienced foreclosure defense attorney can assist you in exploring your available options.

An Automatic Stay

When you file for any type of bankruptcy, the bankruptcy court will immediately put a stay on all debt collections activities being pursued against you. This includes foreclosure proceedings, even if they have already been initiated by your lender. If your lender continues the proceedings once the stay has been enacted, the lender is in violation of federal law. Sanctions are possible in such cases. The stay is not permanent, however, and your lender can request that the bankruptcy court lift the stay and allow the foreclosure proceedings to continue.

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Libertyville judicial foreclosure attorneyMost people are familiar with at least the basic idea of foreclosure. They know that if a homeowner falls behind far enough on his or her mortgage payments, the proverbial “bank” will eventually take the home. Far fewer people, however, understand the reality that foreclosure is a fairly involved process and that, according to Illinois law, the process must be handled through the court system. As such, all foreclosures in the state of Illinois are considered judicial foreclosures.

Non-Judicial Foreclosures in Other States

Illinois is one of 16 states in which the law requires court participation in the foreclosure process. Five others generally use judicial foreclosures as a matter of custom or convenience. In the remaining 29 states, non-judicial foreclosure is the method of choice, either as an available option or because judicial foreclosure is prohibited by law.

When judicial foreclosure is not required, the mortgage agreement may include a clause that gives the lender the “power of sale.” A power of sale clause grants the lender the ability to foreclose on the property on its own. If the borrower fails to keep up with the payments prescribed in the mortgage contract, the lender has the right to sell the property to recover the balance of the loan. Power of sale clauses are not enforceable in Illinois.

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