Being served a foreclosure summons can be heartbreaking. Due to financial challenges, you’ll lose your home if you can’t pay your delinquent mortgage payments in Illinois.
Homeowners facing foreclosure often want to know if they can avoid foreclosure if they pay off their delinquent payments. The answer to that question is “sometimes”, but the lender must approve your payment.
Generally, these payments must also include all principal, interest, penalties and late fees that you owe on the loan.
Avoiding Residential Foreclosure by Making Delinquent Mortgage Payments
It’s important that you act quickly when you get a foreclosure summons. In Illinois, you’ll only have 90 days to pay all delinquent payments and fees before your lender can ask for a judgement in court. If you can make the payment, the lender can reinstate your mortgage and you can go back to making your regular mortgage payments.
After those 90 days, but before the home goes to auction, you might still have an opportunity to reinstate your mortgage, but at this point, it’s entirely up to the lender’s discretion. The lender’s decision during this period will be highly dependent on market conditions and the volume of foreclosures at the time.
Regardless of whether or not you’re within those first 90 days, you should call your lender to discuss your options.
Foreclosure rules differ for non-residential properties. Commercial landowners or property owners with multiple units should get in touch with an Illinois foreclosure attorney to discuss their options.
What to Do to Avoid a Foreclosure Summons
Before you receive a foreclosure summons, you have more options to work with your lender.
Once again, these options might be limited based on the current market conditions and the lender’s ability to make mortgage adjustments.
- Forbearance: if you’re struggling to make your mortgage payments due to a job loss or other financial impacts, you can discuss suspending your payments or reducing them for a set time period. This can help you get back on your feet. These agreements generally include information on how you’ll pay back those missed or reduced payments which can include by adding them to your monthly mortgage at the end of the agreement.
- Loan Modification: based on current interest rates and your financial situation, the lender can make adjustments to your mortgage term. This could mean transferring it to a fixed-term or reducing the interest rate. You’ll need to prove financial hardship and that your finances are going to improve for this to be an option.
- Short Refinance: your lender might have the option to forgive part of your debt and refinance the rest into a new loan. These types of agreements are very rare and hard to get because your lender is taking an immediate loss.
- Refinance with another loan: you can get another type of loan that will provide fast cash to pay off delinquent mortgage payments. If you have good credit and equity in your home, this may be an option. However, if you do not have good credit, be very cautious with this option. These types of loans often have extremely high interest rates and are challenging to pay back. They also might expect to get this money back in a very short period.
- Sell the home: while you likely don’t want to sell your home, this can be a good option if you can’t make payments and foreclosure is inevitable. This way, you’ll still get money back out of your home to perhaps purchase a smaller home (or use it toward a security deposit and rent for a short period of time) while you work on improving your finances. Avoiding foreclosure will protect your credit score and enable you to purchase another home in the future.
- Short sale: if your house is worth less than you owe on your mortgage, you can try to sell it for less than you owe. If your lender agrees to the short sale, as part of the negotiations, they may agree to forgive the additional money you owe (the difference between what they receive from the sale and what you owe, called a deficiency).
Seeking Legal Assistance for Foreclosure
A foreclosure lawyer can guide you in avoiding losing your home. Attorneys know how to present a case to the judge to assert your defenses and try to get you time to work things out with your lender.
An attorney can also guide you in navigating mortgage reinstatement, forbearance agreements and more.
Contact Adam Diamond Law for the legal assistance you need to keep your home.
DISCLAIMER: Any information contained herein is solely for informational purposes. While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, I always urge you to contact a local attorney for advice pertaining to your specific legal needs.