Sunday, April 24, 2022

What is a Judicial Foreclosure and How Can I Avoid One?

When you are behind on your mortgage payments in Oak Park or elsewhere in Illinois, you may be concerned about the possibility of foreclosure and how it will affect your life and your credit. You might also know that you could be at risk of something known as a “judicial foreclosure,” but you may be unsure about what that means and whether any foreclosure you will face will be a judicial foreclosure. Our Oak Park foreclosure defense lawyers can provide you with more information about judicial foreclosures in Illinois, and we can tell you about potential options to avoid a judicial foreclosure, even if you must move out of your home and find a new residence.

Illinois is a Judicial Foreclosure State

The term “judicial foreclosure” refers to the way in which a property foreclosure occurs, and Illinois is what is known as a judicial foreclosure state. Accordingly, under Illinois law, all foreclosures are judicial foreclosure, which means that the bank must file a lawsuit in order to move forward with a foreclosure, and the court must ultimately allow the foreclosure to occur.

How does this process work? Typically, once you are late on your mortgage payments by 120 days or more, the lender will file a lawsuit and will ask the court to allow a foreclosure sale of the property to occur. As with any other lawsuit, the lender must serve you with the summons and complaint, and you must receive information about foreclosure law and consumer rights in Illinois. From that point, you will have 30 days to respond, after which point the lender will ask the court to allow the foreclosure sale to occur.

Options for Avoiding a Judicial Foreclosure in Illinois

Given that all foreclosures in Illinois must be judicial foreclosures under state law, any option for avoiding a judicial foreclosure is an option for avoiding foreclosure more generally in Oak Park. Once the judicial foreclosure process begins and you receive a summons and complaint, you may have multiple options to stop the foreclosure so that you will not have the foreclosure on your credit and can have a chance to rebuild your credit much faster than if the foreclosure occurs.

Common options for avoiding a judicial foreclosure in Illinois include:
  • Short sale, which involves selling your property for less than the amount you owe on the mortgage with permission from the lender, and asking the lender to forgive the remaining amount; or
  • Deed in lieu of foreclosure, which involves transferring over your property to the bank and, in most cases, asking the bank to forgive the amount you owe on the mortgage.
Seek Assistance from a Foreclosure Defense Attorney in Oak Park

If you are facing foreclosure and want to avoid a foreclosure sale, you may have multiple options available to you. One of our experienced Oak Park foreclosure defense attorneys can take a look at your circumstances today and discuss options for stopping the foreclosure. Contact the Emerson Law Firm today for more information about how we can help you with your case.


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Friday, March 25, 2022

Foreclosure Rates Begin Rising in America Again

During much of the COVID-19 pandemic, homeowners did not have to worry about losing their homes to foreclosure as a result of forbearances from federal mortgage services and banks across the country. Many economists and consumer protection advocates predicted, and worried, that the end of foreclosure forbearance periods would result in a marked increase in foreclosure activity across the country. Prior to foreclosure forbearances expiring, an article in Forbes highlighted the “hotly debated foreclosure wave” and discussed the possibility that homes across the country would indeed go into foreclosure. As that article explained, by the end of September 2021, “nearly three-in-four loans (1.2 million loans) in forbearance reached the 18-month maximum limit as of the end of September.”

A recent report from MarketWatch suggests that the beginning of that foreclosure wave may have begun. What do you need to know about rising foreclosure rates in America?

Foreclosure Rates Have Increased Significantly in the New Year

For many months, commentators have been anticipating that foreclosure rates in the U.S. would rise. According to the MarketWatch report, that increase may have started in the New Year. As that report explains, the month of January saw “a seven-fold increase in foreclosure starts as compared to December, with roughly 33,000 loans referred to foreclosure.” In addition, repossessions through foreclosure rose by 70% between February 2021 and February 2022.

The report suggests that the recent rise in foreclosures is evidence of how “many of the regulatory protections implemented during the pandemic to help Americans stay in their homes are starting to wear off.” While a large percentage of foreclosure forbearances have expired for homeowners, it is important to know that many homeowners are still in forbearances in 2022, and those homes could also ultimately go into foreclosure once the forbearances end. Unless a significant economic improvement occurs, the report suggests, struggling homeowners are likely to face foreclosure.

Options to Avoid Having a Foreclosure on Your Credit Report

Facing foreclosure does not have to mean that your home goes through the foreclosure process and that you have to deal with the credit report effects of a completed foreclosure or the possibility of owing the bank significant amounts of money as a result of an underwater loan. Many different foreclosure defense options may exist, and many of them might allow you to avoid owing anything further to the bank. Our firm can help you with:
  • Short sales, which allow you to sell the house, repay the bank the sale price, and negotiate with the bank to avoid a deficiency judgment related to any remaining debt owed on the property;
  • Deed in lieu of foreclosure, in which you sign the property over the bank and negotiate to avoid having the bank come after you for debt owed by getting a deficiency judgment; or
  • Consent judgment (also known as a consent foreclosure), in which a home owner gives up rights to the home and a foreclosure is completed, but the homeowner is not subject to a deficiency judgment.
Contact Our Oak Park Foreclosure Defense Attorneys

If you have questions about avoiding foreclosure with a short sale, a deed in lieu of foreclosure, or a consent judgment, you should seek advice from an experienced Oak Park foreclosure defense attorney at our firm. Do not hesitate to get in touch to find out more about preventing a foreclosure from affecting your credit report. Contact the Emerson Law Firm for more information about foreclosure defense options in Illinois.


See Related Blog Posts:

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Friday, February 25, 2022

Illinois Court Denies Borrower Appeal Concerning Foreclosure Sale

When can the automatic stay in a consumer bankruptcy case definitively stop a foreclosure sale from happening in Illinois? Can a foreclosure sale move forward if a debtor has filed for Chapter 13 bankruptcy, for example, and that debtor ultimately plans to include a mortgage in the repayment plan? And what steps might a debtor take in order to prevent a foreclosure sale after filing for bankruptcy? There are a number of ways in which foreclosures and consumer bankruptcy cases can be interrelated, and a recent ruling in the 1st District of the Appellate Court of Illinois provides some clarification. In BAC Home Loans Services, LP v. Short (2017), the court confirmed a judicial foreclosure sale after the debtor argued that a bankruptcy filing should have stopped the sale. Our Oak Park foreclosure defense attorneys can tell you more about the case and some of its potential implications.

Getting the Facts of the Case

Back in 2007, the debtor and his wife bought a house in Illinois, but they later defaulted on the mortgage. Following significant litigation, the court ultimately entered a judgment allowing for the foreclosure and sale of the property, noting that “if a redemption was not made, the property would be sold at a public sale.” While there were multiple stays of the foreclosure sale, the foreclosure sale ultimately occurred on February 8, 2019, and the U.S. Bank purchased the property. The debtor argued that the foreclosure sale should not have been able to occur because he filed a petition for Chapter 13 bankruptcy at 11:29 a.m. on February 8, 2019—the same date as the foreclosure sale—and the automatic stay should have stopped the foreclosure.

U.S. Bank, which purchased the property in the foreclosure sale, argued that the foreclosure sale did not occur in violation of the automatic stay because the foreclosure sale occurred at 10:41 a.m. on February 8, 2019, prior to but less than an hour before the debtor filed the bankruptcy petition. At the circuit court, both parties were permitted to provide evidence about the specific time that the foreclosure sale occurred. The court confirmed the foreclosure sale, and the debtor appealed. Ultimately, the appellate court confirmed the lower court’s ruling and concluded that the debtor had not submitted evidence to prove that evidence existed that the bankruptcy filing occurred prior to the foreclosure sale.

The court underscored that, had the debtor produced evidence that the foreclosure sale occurred after the bankruptcy filing, the sale would have been in violation of the automatic stay.

Contact Our Experienced Foreclosure Defense Lawyers in Oak Park

Do you have questions about keeping a foreclosure off your credit report or stopping a judicial foreclosure? You may have multiple options available to avoid foreclosure, including the possibility of a short sale, a deed in lieu of foreclosure, or even a Chapter 13 bankruptcy filing. Do not hesitate to get in touch with an Oak Park foreclosure defense lawyer at our firm to learn more about how we can assist you. Contact the Emerson Law Firm for more information.


See Related Blog Posts:

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Friday, January 21, 2022

What are the Steps for a Deed in Lieu of Foreclosure?

If your home is going into foreclosure and you want to take steps to avoid foreclosure, a deed in lieu of foreclosure is one option that you may consider. While a deed in lieu of foreclosure will not allow you to stay in your house or condo, it can allow you to avoid having a foreclosure on your credit report. With a deed in lieu of foreclosure, you will voluntarily transfer your house over to the bank, as the CFPB explains, and the bank will agree that it will stop taking steps toward foreclosure. In effect, you will walk away from the house, but you will not have to contend with the credit hit of a foreclosure. If you are considering a deed in lieu of foreclosure, you should understand how the process works. Our Oak Park foreclosure defense lawyers can tell you about the steps involved in this process.

Contact the Lender’s Loss Mitigation Department

The process for a deed in lieu of foreclosure typically begins when a homeowner who is at risk of foreclosure contacts the loss mitigation department for the lender and asks for information about a deed in lieu of foreclosure, and an application for this loss mitigation option.

Fill Out the Application

Next, the homeowner will fill out the application, and will typically need to submit a variety of documents to the lender that provide details about the homeowner’s finances, including evidence of the homeowner’s income, tax returns, bank statements, detailed information about income and expenses, and a hardship affidavit. With a hardship affidavit, which is sometimes known as a hardship letter, the homeowner will clarify that they cannot continue to make mortgage payments on the house, and thus that the homeowner is seeking a deed in lieu of foreclosure.

You should know that, in some circumstances, a lender will want to see if it is possible to sell the house before moving forward with a deed in lieu of foreclosure, so you may be required to put the home on the market.

Lender Will Do a Title Search

If your home cannot sell for fair market value, the lender will then do a title search on the property in order to determine whether it can accept a deed in lieu of foreclosure. If you have a second mortgage on the property, a deed in lieu of foreclosure may not be possible unless the same bank is the lender for both your first and your second mortgage. Similarly, if there are any liens on the property, the homeowner will often need to resolve those liens before a deed in lieu of foreclosure can be completed.

Negotiate the Agreement With the Lender

Before you sign over the property, it is important to work with an Oak Park foreclosure defense attorney to negotiate any terms with the bank that can benefit you. Most importantly, you will want to address the issue of a deficiency judgment and whether the bank can file a claim against you to seek the difference between the current market value of the property and the amount of mortgage debt you owe. You will want to make sure the bank cannot pursue a deficiency judgment and that your mortgage debt will be satisfied when you sign over the property.

Sign Over the Property

Finally, you will sign the deed in lieu of foreclosure and transfer the property to the lender.

Contact a Foreclosure Defense Lawyer in Oak Park

If you have questions about avoiding foreclosure, our Oak Park foreclosure defense attorneys can help. Contact the Emerson Law Firm today.


See Related Blog Posts:

Pros and Cons of a Deed in Lieu of Foreclosure

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Thursday, December 23, 2021

Pros and Cons of a Deed in Lieu of Foreclosure

Are you struggling to make your mortgage payments and at risk of foreclosure? For many Illinois residents, avoiding foreclosure is the most important thing, even if it means you need to move into a new residence until you can get caught up financially. If you are in this situation, you may be assessing different options that are available to you, including allowing your home to go into foreclosure, considering a short sale, or arranging for a deed in lieu of foreclosure. A deed in lieu of foreclosure has both pros and cons as a recent Forbes article discusses, and our Oak Park foreclosure defense attorneys want to discuss them with you here.

Pros of the Deed in Lieu of Foreclosure

There are many pros or advantages to a deed in lieu of foreclosure, particularly as an alternative to foreclosure itself. The following are some of the central benefits to a deed in lieu of foreclosure:
  • Quicker way to avoid foreclosure and to move forward: When the bank agrees to a deed in lieu of foreclosure, you should expect the process to take anywhere from approximately 90 to 120 business days, which is significantly faster than a foreclosure and can allow you to move forward much more quickly with your life.
  • Prevent additional financial harm: Once you decide on a deed in lieu of foreclosure, you will not risk missing additional mortgage payments, falling farther behind on your loan, or harming your credit any further. Although your credit will be affected by the mortgage payments you have missed, the impact to your credit will be significantly less than a foreclosure.
  • Relocation assistance may be available: Depending upon the details of your case, you could be eligible to seek relocation assistance from your mortgage servicer if you go through with the deed in lieu of foreclosure and move out of your home. In some cases, you could be eligible to obtain up to $3,000 in relocation assistance for a conventional mortgage and up to $2,000 for an FHA loan.
  • Remain in your property temporarily: Once the bank agrees to a deed in lieu of foreclosure, you can be eligible in some cases to remain in your home for one or more months, which can give you time to find another place to live while still avoiding foreclosure.
  • Qualify sooner for a mortgage: If you choose a deed in lieu of foreclosure instead of your property going into foreclosure, you can qualify sooner for a mortgage and can buy another property once you get back on track with your finances.
Cons of a Deed in Lieu of Foreclosure

What are some of the issues with a deed in lieu of foreclosure that may be disadvantages? Consider the following:
  • Your credit report will be harmed (although not as much as it would be with a foreclosure);
  • Deed in lieu of foreclosure can stay on your credit report for up to 7 years;
  • You could owe money to the bank if the mortgage servicer gets a deficiency judgment against you, so it is important to ensure that the bank agrees to forgive any remaining debt you owe;
  • You will owe income taxes on the debt that the bank has forgiven; and
  • You will not be able to keep any equity in your home.
Contact Our Foreclosure Defense Lawyers in Oak Park

Do you have questions about a deed in lieu of foreclosure? An Oak Park foreclosure defense attorney is here to help. Contact the Emerson Law Firm today for more information.


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Wednesday, November 24, 2021

How Do I Complete a Short Sale?

If your home is at risk of going into foreclosure, you may be able to avoid foreclosure by moving forward with a short sale. There are other options for avoiding foreclosure that may be available to you as well, but a short sale can allow you to sell your house and move on, ideally without owing anything to the bank in the future. Short sales are particularly helpful for homeowners who are struggling with underwater mortgages. While the real estate market remains a seller’s market in many parts of the country, anyone who purchased a home at the peak of the real estate market may be struggling to make payments on a property for which they paid a significant amount of money and for which the property would be likely to sell for a lesser amount in the present. For these homeowners, a short sale may be the best option.

If you are considering a short sale, how can you complete this process? Our Oak Park foreclosure defense lawyers can provide you with the information you need.

Learn About Short Sales

The first step in completing a short sale is to learn more about the process and what it entails. As a Bank Rate article explains, a short sale is the sale of a property that occurs “when a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property by a financially distressed owner.” Then, in most short sales, the owner enters into an agreement with the lender that it will forgive any amount remaining on the mortgage so that the owner can walk away without owing the bank any additional money.

To clarify, let us give you an example: A homeowner purchased a property for $500,000 and has a mortgage payment of approximately $2,400 per month. The homeowner is struggling to make that monthly mortgage payment and is behind on the loan by numerous months of payments. The homeowner wants to avoid a foreclosure, but the property has recently been appraised at only $300,000, and the homeowner still owes $400,000 on the original loan. With a short sale, the bank can agree to accept $300,000 and to forgive the remaining $100,000 the homeowner owes on the loan.

Work With an Attorney to Obtain Approval From Your Lender

Once you understand how the short sale process works, you can begin by working with your foreclosure defense attorney to obtain approval from your lender to complete a short sale. Once your lender approves, then you can move forward by listing the property as a short sale with a real estate agent who has experience handling short sale properties.

Get an Offer

Next, you will need to find a buyer who is interested in the property and who makes an offer. Properties that are sold as short sales are sold on an as-is basis, so some homebuyers may not be interested in making an offer or may not be able to secure funding to purchase the property.

Present the Offer to the Lender

Once you have an offer, you will need to submit the information to the lender, who will need to approve of the sale price and the other aspects of the sale.

Contact an Oak Park Foreclosure Defense Attorney

If you have questions about completing a short sale to avoid foreclosure, an Oak Park foreclosure defense lawyer at our firm can assist you. Contact the Emerson Law Firm today.



See Related Blog Posts:

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Friday, October 15, 2021

Benefits of a Short Sale Instead of Foreclosure

If you are facing foreclosure after getting far behind on your mortgage payments, you might be considering certain options to avoid foreclosure even if you cannot remain in your property. While your ultimate goal at the start might have been a foreclosure defense option that allowed you to get back on track with your mortgage payments, you may have reached the point at which you are realizing that you will need to move out of your home and find a new place to live. In such situations, you might be asking yourself if there is really any benefit to going through a process to avoid foreclosure such as a short sale or a deed in lieu of foreclosure. In other words, you might be thinking it could make more sense to simply allow the foreclosure to happen. Our Oak Park foreclosure defense lawyers want to explain the many and varied benefits of a short sale instead of a foreclosure.

You Can be Eligible for Another Mortgage Much Sooner

By going through a short sale instead of allowing the foreclosure process to continue, you can be eligible for another mortgage much sooner. Having a foreclosure on your credit can be extremely damaging, and you should take steps as soon as possible to avoid it. As the Federal Trade Commission (FTC) explains, if your home goes into foreclosure, you will likely need to wait for seven years before you are eligible for another mortgage. However, if you have a short sale instead, you may be able to qualify for a mortgage again in just five years.

Shorts Sales Do Not Affect Your Credit as Much as Foreclosures

Short sales are much less damaging to your credit than foreclosures, which means you will be able to rebuild your credit much faster with a short sale instead of a foreclosure. Indeed, as we noted above, you may be able to get another mortgage in as little as two years if you work with a lawyer on a short sale instead of simply letting the foreclosure happen.

You Will Have More Control of the Process

Learning that your home is going into foreclosure can be extremely stressful, and most homeowners feel completely out of control in the process. By choosing to move forward with a short sale and avoiding foreclosure, you can also ensure that you have more control over the process. Although you will still need to work with a lawyer to engage in negotiations and to ensure that all documents are appropriately filled out and filed, you will not need to go through the more emotionally arduous process of a foreclosure.

It is important to recognize that having some control in the short sale process also means that you can work with your lawyer to ensure that the bank waives plans for a deficiency judgment so that you will be free and clear once the house sells.

Contact an Oak Park Short Sale Lawyer Today

If you have questions about short sales, or if you need assistance with foreclosure defense in Illinois, one of our dedicated Oak Park foreclosure defense attorneys can speak with you about the benefits of short sales. Contact the Emerson Law Firm today to learn more about how we can assist you.



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