Given the current state of affairs, more Illinois homeowners than normal are concerned that their bank could foreclose on their home.
The good news is that you typically have several months following a delinquent payment before your lender can initiate foreclosure proceedings.
Luckily, there are also some loss mitigation options like a forbearance agreement, loan modification, or payment plan that many lenders are willing to consider to avoid a costly foreclosure lawsuit.
Let’s take a closer look at the process and how long you really have before the bank files for foreclosure on your home.
Foreclosure in Illinois
If you miss one or a few mortgage payments, your lender is likely to only send you some reminders that you are overdue.
Your bank is also likely to assess a late fee, which is normally 5 percent of the overdue payment (the late fee amount should be detailed in the monthly mortgage statement).
You may also get phone calls from your lender asking you to submit the overdue amounts. You should not try to avoid these calls, as they are an important opportunity to discuss the following loss mitigation options:
- Loan modification – You may be able to modify your loan so that you can avoid foreclosure. This may include changing the interest rate, extending the repayment period, or reamortizing the missed payments.
- Forbearance agreement – If you are experiencing a temporary loss of income, your lender may agree to reduce or suspend payments. The agreement typically requires you to repay the missed amounts, as well.
- Repayment plan – Many lenders will allow you to make up missed payments by raising the amount of monthly payments for a short period of time.
Will the bank or the lender send me any documents?
In Illinois, 30 days after you’ve missed payment, your bank can send you a Notice of Acceleration. A Notice of Acceleration notifies you that your entire loan amount is payable immediately unless you make up all missed payments within thirty days.
Your lender must also send you an Illinois Grace Period Notice, which informs you that housing counseling is available to you.
The bank cannot initiate foreclosure proceedings within 30 days of sending you this notice. If you agree to housing counseling, the bank is prohibited from foreclosing for another 30 days.
Once this 30, or 60 day period expires, your lender can file a lawsuit to foreclose. At this point, your lender will serve you with a copy of the lawsuit and a court summons.
Get Legal Help to Avoid a Foreclosure
While facing foreclosure can certainly be a stressful and emotional time, all hope is not lost.
In Illinois, most residential foreclosures take at least 9 months to a year. Hiring a real estate attorney can help you understand your options and use this time wisely.
A foreclosure defense attorney can:
- Review the lawsuit paperwork and see if there are any errors.
- Review your case and see if you have any defenses.
- Make sure that the attorneys for your lender are following the correct legal process (which gives you time to try to work things out with your lender).
- Keep you informed of where you are in the process and let you know how long you can stay in your home.
Contact Adam Diamond Law today to avoid a foreclosure
To learn more about delaying or stopping a foreclosure in McHenry or Lake County, Illinois, please contact the legal team at Adam Diamond Law.