Illinois Foreclosure Fact Sheet
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Essential Illinois Foreclosure Time Frames
- Service Delivered (Property Owner Formally Notified of Foreclosure Lawsuit)
- Deadline to File Answer: 30 days later (Property Owner Files with Court Responses to Foreclosure Lawsuit)
- Deadline for Reinstatement: 90 days later (see Reinstatement explanation below)
- Deadline for Redemption: 7 months from date of Service or 3 months from Foreclosure Judgment
- Judicial Sale: May take place the day after the Deadline for Redemption expires
- Judicial Order Confirming the Sale: May take place within days of the sale.
- Former Owner to Vacate Property: 30 days after Judicial Confirmation of the Sale
Options to Avoid Foreclosure
Loan Modification
Loan Modifications can take many forms, but generally they change the terms of the loan to provide payments that are consistent with the home owner’s financial situation. The period to repay the mortgage may be extended, delinquencies may be added to the mortgage balance, the principal balance may be altered to reflect market changes in value, or the interest rate may be reduced and changed from variable to fixed. The savings can be significant and worth the investment in professional legal assistance.
Reinstatement
After a mortgage suit is filed, the home owner has an absolute right to reinstate the loan for 90 days after being served with a Complaint to Foreclose Mortgage. Reinstatement requires payment of the total amount past due. While the legal right exists for only 90 days, many lenders will allow reinstatement prior to a foreclosure sale.
Repayment Plan
There can be plans to reinstate the loan worked out with the lender. A repayment plan is designed to bring the loan current within an agreed period of time. These plans generally require a payment on the arrearage, and then making normal payments plus a specific amount beyond the regular payment until the loan is brought up to date.
Redemption/Refinance
Illinois law provides a redemption period after a foreclosure suit has been filed. Redemption requires paying off the loan in full. An owner has the right to pay off the loan during the redemption period. The redemption period lasts until 7 months after service of a foreclosure complaint or 3 months from the date the judgment of foreclosure is entered, whichever is later. A judicial sale of the property may not take place before the redemption period expires.
Home Sale/Short Payoff
Before a foreclosure sale takes place, an owner can sell the home. Often sale proceeds may not cover the mortgage balance. This is known as a short sale and requires lender approval for the buyer to get a warranty deed with title insurance . A lender may accept less than the full mortgage rather than continue with the expense and time delays associated with proceeding with the foreclosure.
Bankruptcy
A mortgage is secured by real estate, that is the property acts as security for the loan. Filing bankruptcy will stop the foreclosure case, though unlikely to stop it permanently, since the lender is a secured creditor. Though not a permanent solution, it can buy time for the home owner to get things in order. A bankruptcy can be filed anytime before a foreclosure sale, but is not a long-term solution to the foreclosure and has significant implications for anyone choosing this route. It should not be chosen without competent counsel.
Deed-in-Lieu of Foreclosure
While a mortgage is the legal document providing the property as security for the money to purchase a home, the owners have signed a note indicating they owe the money personally as well. Illinois law allows for deficiency judgments, which means that if a property sale brings less than the loan, the former owner still owes the balance not paid off by the sale.
A deed in lieu of foreclosure transfers the property voluntarily to the lender in full satisfaction of the amount owed. The law provides that if the lender accepts the deed the owner no longer owes any shortage from a sale of the property. If there are other liens on the property such as a second mortgage, mechanics liens, tax liens or other debts owed with the property mortgage lenders are unlikely to accept a deed in lieu of foreclosure.
© 2009 Shestokas & Raines
