Wednesday, July 13, 2022

Top Five Advantages of a Short Sale

Struggling to pay your mortgage and realizing that you could soon be facing foreclosure is an extremely difficult experience for any homeowner. Indeed, it can be devastating to recognize that you do not have options for staying in your home given the amount of debt you owe. There are a variety of options that could be available to you to avoid foreclosure, including a short sale. Our Oak Park foreclosure defense attorneys routinely help struggling homeowners with short sales in order to stop a foreclosure from happening, and we can provide you with more information about how a short sale might benefit you. In the meantime, the following are the top five advantages of a short sale.

1. Avoid Having a Foreclosure on Your Credit

One of the most obvious advantages of doing a short sale instead of foreclosure is that you will not have a foreclosure on your credit record or credit report. When a foreclosure happens, a consumer’s credit takes a significant hit, and it can be difficult to rebuild credit. While a short sale will still affect your credit, it will affect your credit significantly less.

2. You Will Have Greater Control Over the Process Than You Would in a Foreclosure

When you do a short sale, you will be able to have more control over the process and will be able to make plans to sell the home and to move into a new one.

3. You Can be Eligible for Another Mortgage Sooner

When a judicial foreclosure occurs, you may need to wait for up to eight years before you are eligible to get a mortgage. With a short sale, you can be eligible for a mortgage again on a much shorter timeline. Depending upon the type of loan you want to get, you may need to wait anywhere from two to four years before you are eligible again, according to Bankrate. That timeline is significantly shorter than if you lose your home to foreclosure.

4. You May Save Money

The costs associated with foreclosure can be high. According to Mortgage News Daily, the Joint Economic Committee of Congress estimates that the average cost of foreclosure to a homeowner is more than $7,000, while a short sale will incur minimal costs.

5. Less Stressful Than a Foreclosure

Given that you will have more control in a short sale than a foreclosure, and that you can begin rebuilding your credit in order to be eligible again relatively soon for a mortgage, a short sale is generally less stressful for the homeowner than a foreclosure.

Contact an Oak Park Foreclosure Defense Lawyer Today

If you are behind on mortgage payments and you are facing the possibility of foreclosure, you should get in touch with an Oak Park foreclosure defense attorney who can provide you with more information about your options. We can help you through the short sale process, which can be complicated, and we can also provide you with information about other foreclosure defense options, such as a deed in lieu of foreclosure. Contact the Emerson Law Firm to learn more about how we can assist you.


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Does Bankruptcy Always Stop Foreclosure?

How Can I Do a Short Sale?

Thursday, June 23, 2022

Does Bankruptcy Always Stop Foreclosure?

If you are struggling with debt and you are also struggling to make mortgage payments, you might have heard information about bankruptcy being able to stop a foreclosure. When you are at risk of your home going into foreclosure and one of your primary aims in filing for personal bankruptcy is to stop the foreclosure and to be able to remain in your home, you may be planning to file for bankruptcy to get back on track with your mortgage payments. However, it is important to understand that not all bankruptcy chapters have the same effect on foreclosures.

If you are planning to file for bankruptcy with a primary aim of stopping foreclosure on your house, it is critical to seek advice from an Oak Park bankruptcy lawyer about your case. We can provide you with more information about the ways in which bankruptcy and foreclosure can be connected, and we can help you to file for the type of bankruptcy that is best suited to your circumstances.

In the meantime, consider some of the following information that helps to clarify the ways in which bankruptcy has the ability to stop home foreclosures.

Automatic Stay Initially Stops Foreclosure in All Bankruptcy Cases

In every consumer bankruptcy case, the automatic stay will initially stop a foreclosure from moving forward or taking place. However, the automatic stay cannot stop foreclosures indefinitely in all types of bankruptcy cases.

You Cannot Keep Your House if You are Filing for Chapter 7 Bankruptcy and Behind on Your Mortgage Payments

If you are filing for Chapter 7 bankruptcy, the automatic stay will initially stop a foreclosure, but it cannot permanently stop a foreclosure and allow you to keep your home. If you are behind on mortgage payments, you will likely need to plan for the lender to take possession of the property or to sell the house.

Chapter 13 Bankruptcy Can Stop Foreclosure and Allow You to Keep Your Home

If you want to use bankruptcy to stop a foreclosure and to keep your home, you will want to file for Chapter 13 bankruptcy. This type of reorganization bankruptcy will allow you to keep your home. How does it work?

The automatic stay will apply as soon as you file for Chapter 13 bankruptcy, and the lender will not be able to move forward with any aspects of a foreclosure case—whether it is initially filing an action to initiate a judicial foreclosure or moving forward with an existing foreclosure case. Then, since Chapter 13 bankruptcy is a kind of reorganization bankruptcy, you can create a repayment plan that will allow you to catch up on back-owed mortgage payments and to remain in your home.

Contact an Oak Park Bankruptcy Lawyer Today

If you have questions about how filing for bankruptcy can stop foreclosure, or if you need assistance with your Chapter 13 bankruptcy case, one of our experienced Oak Park bankruptcy attorneys is here to help with your case. Contact the Emerson Law Firm to learn more about how we can assist you.


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Friday, May 27, 2022

How Can I Do a Short Sale?

If your home is currently at risk of going into foreclosure, or if you are unable to continue making your mortgage payments and want to take steps to avoid foreclosure, one of the options you might be considering is a short sale. It is important to understand that a short sale is different from a traditional home sale, and there are certain steps you will need to take if you want to do a short sale in Illinois. An experienced Oak Park foreclosure defense attorney at our firm can talk with you today about planning a short sale and moving forward with a short sale in order to prevent foreclosure. In the meantime, the following are the general steps you should be aware of when it comes to doing a short sale in the Chicago area.

Understand What is Involved in a Short Sale

Before you take any steps toward doing a short sale, it is essential to understand what is involved in the process. A short sale is generally for homeowners who have underwater loans and cannot make their mortgage payments. With a short sale, you will be entering into an agreement with your lender to sell your house for less than what you owe on the mortgage, and the lender will agree to accept the amount for which the house sells and, in most cases, forgive the remaining amount of mortgage debt. A short sale will impact your credit, and you will not be able to keep your home, but it will have less impact on your credit than if your house goes into foreclosure and is sold through a foreclosure sale.

Determine if You Need to Do a Short Sale

You should work with an attorney who can help you to determine whether a short sale is necessary. In most situations, it is possible to estimate the likely sale price of the house, and to account for the unpaid mortgage balance and any costs associated with the sale. If it looks as if you might still make any money from the sale or might come out even, a short sale is likely not necessary. If money will still be due after a sale of the house based on the estimated selling price, you may need to move forward with a short sale.

Contact Your Lender

Once you decide to move forward with a short sale, the first thing you will need to do is contact your lender. According to an article in The Balance, getting in touch with the right person can be difficult, and it often makes sense to seek help from a foreclosure defense lawyer immediately so that your lawyer can be in contact with the lender and negotiate the terms of the short sale.

Submit a Hardship Letter and Related Documentation

When you ask the lender to agree to a short sale and to forgive remaining debt, you will typically need to submit a hardship letter that explains your financial situation and why you are unable to continue making payments on your home loan. Along with a hardship letter, you will usually need to submit financial documentation to the lender, including information about any assets you have and copies of your bank statements.

Listing the House and Entering Into an Agreement

Finally, if the lender agrees to the possibility of a short sale, the house can be listed, you can submit a purchase agreement to the lender once you find a buyer, and the lender can approve the terms of the short sale.

Contact an Oak Park Foreclosure Defense Attorney Today

If you have questions about doing a short sale, one of our foreclosure defense attorneys in Oak Park can assist you. Contact the Emerson Law Firm to get started.


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

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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.


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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.


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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.


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