How Long Will Your Foreclosure Take?

Here is a guide to help forecast a typical home foreclosure in the state of Illinois. Now, this model is intended for those who do not wish to fight the foreclosure process. Granted all cases are quite different, this information is general timeline of the foreclosure process. Though, before your lender can sue you for mortgage foreclosure, they must see if you qualify for a loan modification under the federal government’s Home Affordable Modification Program (HAMP). To qualify for HAMP, both you and your mortgage lender must be eligible.

Remember, if you at all are having legal trouble regarding a foreclosure, do not hesitate to contact the experienced River Forestforeclosure attorneys. They can help steer you through your own foreclosure process—no matter how challenging it may be.

0-2 Months

After three missed mortgage payments, foreclosure action commences; this constitutes the legal proceedings over the termination of your mortgage and repossession of your home. Once this has begun, the Sheriff’s office will serve you (deliver the legal paperwork) the foreclosure complaint. If the Sheriff cannot locate a party, they can post a notice in the newspaper.

2-3 Months

After receiving the foreclosure complaint, you have 90 days to reinstate your mortgage. This right of reinstatement means that you are allowed to repay the total money you owe on the mortgage, plus all costs and fees. If you have the ability to repay this sum, then the foreclosure case against you is over; though, you cannot exercise your right of redemption again for five years.

If you decline or are unable to employ your right of reinstatement, then you will receive notice of motion. A notice of motion is a written announcement requesting your presence at court and detailing your court date information. It is highly advisable to appear at court—as additional penalties may ensue if you do otherwise.

3-4 Months

At court, the judge may offer you and your family more time to hire a lawyer or to complete certain paperwork. If not, the judge will send you directly to trial. Assuming you are not fighting the foreclosure case at trial, you will then receive a judgment of foreclosure and a sale against you which states that you no longer possess the property. Upon receiving your judgment of foreclosure, you enter a redemption period (different from a right of reinstatement). This timeframe allows you to pay off certain costs, such as overdue mortgage payments, attorney’s fees, taxes, etc.  Your redemption period ends:

Seven months after you are given the foreclosure complaint, if you are living in the home.

Or

Six months after you are given the foreclosure complaint, if you are not living in the home; or three months after you receive the judgment of foreclosure against you, whichever is later.

7-10 Months

Before the foreclosure sale of your property takes place, the mortgage company must publish a notice of sale in a widely read, local newspaper. This notice must be in the real estate section and should appear at least three weeks in a row. If this is not the case, the foreclosure sale may not be valid and, under your rights, you are able to take legal action.

8-11 Months

A court will confirm a foreclosure sale unless you can prove one of the following:

-Notice was not given in the right way

-The terms of sale were unreasonable

-The sale was conducted fraudulently (in a dishonest way)

-The lender violated HAMP requirements

9-12 Months 

You no longer have the right to stay in your house and the mortgage company can ask the court to have the Sheriff remove you from the property. After you have left the property, you will receive a foreclosure deed—a written document of the foreclosure—which also become a public record.

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Att. Gen. Madigan Announces $3 Million for Foreclosure Mediation Programs, but will They be Effective?

Wells Fargo Settles with Illinois and US for $175 Million

Short Sales Popularity Continues to Rise

Pre-foreclosure sales, or short sales, are on the rise according to new national data released this week by RealtyTrac.   A short sale is also referred to as a pre-foreclosure sale because it requires a lender’s approval before the seller (homeowner) can sell a house for less than what the seller owes on the mortgage.

Short Sales – No Sign of Slowing
According to the Chief Executive Officer of RealtyTrac (an online market for distressed property), lenders are approving more competitively priced short sales, which lead to more successful short sale transactions. This may be good news for homeowners looking for a plausible solution to get out of their home without strings attached.

In a recent foreclosure sales report, it states that sales of homes that were in some stage of foreclosure or bank owned accounted for approximately 26% of all US residential sales during the first quarter of the year. This figure is up from the fourth quarter of last year when only 22% of all sales were such, and the first quarter of 2011 when they were 25%. According to the report from RealtyTrac, first quarter pre-foreclosure sales were at their highest level since the first quarter of 2009 and pre-foreclosure sales reached 12% of all sales during the first quarter, up from 10% of all sales in the prior quarter and 9% of all sales in the first quarter of 2011.

Lenders may be working off a large inventory of pre-foreclosure homes, making it more advantageous for a homeowner in distress to contact the banks and work on the short sale process. It’s all part of national trend.

“Lenders are approving more aggressively-priced short sales, which in turn is resulting in more successful short sale transactions,” said notes the CEO of RealtyTrac. Banks are becoming more amenable to short sales as the housing slump drags on through its fifth year, as shown by the statistics. Homeowners are also becoming more familiar with short sales and contacting area River Forest and Oak Park foreclosure lawyers to get assistance with this process, instead of waiting for the sheriff to show up with an order to vacate the property. Another reason why short sales are on the rise is because real estate agents may be getting better at selling them.

Credit Realities with a Short Sale
One of many reasons struggling homeowners pursue a short sale involves the credit benefit.  For example, FICO, the credit scoring company, notes someone with a good credit score, say 720, may see it drop to 570 to 590 after a foreclosure. A short sale, without personal recourse against the seller, will drop it to 605 to 625. But a short sale without forgiveness has the same effect as a foreclosure.

Of course, a less serious impact on one’s credit is just one of many reasons that homeowners stand to benefit from these sales.  In our area, be sure to get in touch with our Oak Park and River Forest foreclosure attorneys to learn more. 

Att. Gen. Madigan Announces $3 Million for Foreclosure Mediation Programs, But Will They be Effective?

Attorney General Lisa Madigan announced Wednesday that $3 million will be utilized in establishing new mortgage foreclosure mediation programs.  These programs will be targeted to Illinois counties which lack such foreclosure agendas.  The sum of these funds stems from the $25 billion national settlement in February with the nation’s five largest bank mortgage servicers – Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Bank, formerly GMAC.  The suit, in which Madigan joined the 49 other state attorney generals, challenged particularly the “robo-signing” of foreclosure documents.

The program funding is available for multi-year grants to 501(c)(3) tax-exempt organizations.  But, these organizations must be able show the capability to manage mortgage foreclosure mediation programs.  In other words, eligible firms are required to have multiple facets to their program plan, including access to housing counseling and pro bono legal representation for eligible borrowers.  Moreover, they must include a sustainability plan that includes a long-term funding strategy—done so through either a dedicated filing-fee add-on or some other source.  Projects must also include the training of judges, key court personnel and volunteers on mortgage foreclosure mediation.  Clearly, such organizations must display a competent and committed strategy in order to undertake these mediation programs. 

“Effective mediation programs are proven to give homeowners a fighting chance to save their homes,” Madigan said. “Borrowers who’ve gone through foreclosure mediation have significantly better chances at receiving a loan modification and reaching a positive outcome.”

Are foreclosure mediation programs that effective?

To begin, our Oak Park & River Forest foreclosure lawyers understand that a state or county’s experience with these mediation programs can differ vastly.  Furthermore, not one mediation program is like the next.  Therefore, generalizing their worth (or lack thereof) is quite difficult.  Yet, we will try to examine the broad pros and cons that these projects contribute.

Pros

Mediation, in itself, can be a unifying force but also can hold a subjective eye to issues.   For one, foreclosure mediation allows for all sides to be openly discussing similar issues.  This means that communication occurs for a single case during a focused of period of time, breaching disconnects that borrowers may sometimes feel.  Moreover, mediation can be a forum to confidentially converse on particular situation; this allows for creative solutions to be produced, principally for cases that may seem outside the box.  Finally, mediation is not a court process.  That offers advantages in itself.  It permits both parties to freely discuss options and empowers individuals to make decisions on their own behalf.

Cons

Although mediation allows for effective and open dialogue, it lacks many abilities.  Mediation can serve as a setting for document exchange and review; yet, mediation programs, and the mediators in them, cannot resolve problems beyond the holistic process.  Moreover, mediation cannot, and should not, fix any corporations’ process.  Many of mediation programs ask for mediators to report on party behavior, or more specifically, servicer behavior.  This can crumble the confidentiality previously established.  With that being said, a program may decide that having an avenue whereby one can report bad party behavior in foreclosure mediation is more important than maintaining mediator ethics.  Therefore, the system contains certain flaws. 

It is important to do your own research on foreclosure mediation programs, as they will in the near future be affecting the state of Illinois.  Foreclosure can be an ugly process.  This state and this country are adopting new ways—whether healthy or not—in order to combat this housing plague.  If you are at all experiencing any foreclosure woes, do not hesitate to call or contact our Oak Park attorneys.  Our experience should be on your side .  

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Wells Fargo Settles with Illinois and US for $175 Million

Foreclosure Rates for Illinois, Chicagoland Fall Slightly in June

Wells Fargo Settles with Illinois and US for $175 Million

Wells Fargo & Co. will pay $175 million in a joint settlement with U.S. Department of Justice and the state of Illinois for discriminatory lending practices, according to the Chicago Tribune. This settlement aims to recompense the thousands of African-American and Hispanic borrowers who were ushered into subprime mortgages by the prominent bank. Having undertaken the case back in 2009, Attorney General Lisa Madigan called the ruling “a significant step forward to hold banks accountable.”
The state of Illinois alone is meant to receive $15 million of the $175 million settlement. Of that sum, an announced $8 million in average cash payments of $15,000 each will be made to roughly 3,300 customers. This figure is designed to compensate those wrongly steered into subprime loans between the years of 2004 and 2009. In addition, minority borrowers who were wrongly charged with higher fees will collect a further average of $1,500 to $2,000 each. Wells Fargo will utilize the remaining $7 million in the state to offer down payment assistance to homebuyers through a special program.

While other states are also receiving a portion of the $175 million settlement, our Oak Park and River Forest foreclosure lawyers know that only Illinois filed a suit against Wells Fargo for its minority lending operations. Almost three years ago, in July 31st of 2009, Lisa Madigan charged that the bank with discrimination against African-American and Latino borrowers by selling them high-cost, subprime mortgages; furthermore, the Attorney General alleged that white borrowers with parallel credit profiles received lower cost mortgages. Months later, a Chicago Reporter analysis of Wells Fargo lending data found vast differences in the treatment of white and non-white borrowers. It was only then did the state began investigating the bank’s practices.

"When you look at what's taken place, it's horrendous," stated Madigan. "It's not an understatement at all to say that there's an entire generation of wealth in minority communities that's been taken away."

The Chicago Reporter study found that Wells Fargo put 34 percent of Chicago-area African-American borrowers who earned more than $120,000 into subprime loans while only 22 percent of white borrowers who earned less than $40,000 were put into that high-cost mortgage product. Moreover, the state claimed that Wells Fargo rewarded employees for selling borrowers high priced mortgages.

"Wells Fargo adopted loan pricing and origination policies that allowed the personnel who originated its loans both to set the loan prices charged to borrowers and to place borrowers into loan products in ways unconnected with credit risk," the filing said. "Wells Fargo created financial incentives for its employees and mortgage brokers by sharing increased revenues with them."

This scandal—and now, due punishment—exemplifies the inherent troubles in the housing industry for the nation, for the state of Illinois, and for the Chicago-area. Each Oak Park foreclosure attorney at our firm understands that the rampant nature of foreclosures at the present time is only a symptom of these egregiously mismanaged practices, as seen by Wells Fargo. If you or a loved one are at all experiencing any foreclosure repercussions, negotiations, or plain fears, do not hesitate to contact our experienced attorneys. This type of injustice shall not be tolerated; and, you don’t have to face it alone.

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Foreclosure Rates for Illinois, Chicagoland Fall Slightly in June

Chicago Tribune on the “Short Sale Maze”

Foreclosures Rates for Illinois, Chicagoland Fall Slightly in June

The recent data shows slender improvements in the nation and the state’s foreclosure rates this past month. After an abysmal May where Illinois foreclosures increased by an astounding 29%, the June report is a trickle of relief. Yet, to affirm that this housing crisis is over or that the country’s foreclosure quandary has been solved is gravely wrong. Our Oak Park and River Forest foreclosure lawyers know that these positive trends are a breath of fresh air, but by no means is the US or Illinois out of hot water. 

Following the previous month’s egregious results, June provided roughly a 4% and 8.5% decrease in foreclosure rates for the country and Illinois respectively. The state garnered a total of 14,938 foreclosures; to note, this statistic includes default notices, auction-sale notices, and bank repossessions. These encouraging figures from the source RealtyTrac unfortunately do not narrate the whole tale. Compared to April, these June foreclosure numbers are still an 18% increase in Illinois. Foreclosures occurred in one in three hundred fifty households on average for June in the state; these first half numbers are a 22% increase compared to last year. In fact, Illinois, as it was in May, is still ranked fifth worst in the country regarding foreclosure activity. Therefore, this progress is not substantial, nor can be concluded as sign of triumph.

Unfortunately, the Chicago area is plagued arguably more so than any other city. Cook County foreclosure rates are 28% above the state’s average and a staggering 140% over the national average. It is considered the “Top Foreclosure City” in the US. RealtyTrac’s CEO, Brandon Moore said, “The increase in foreclosure starts in the first half of the year will likely translate into more short sales and bank repossessions in the second half of the year and into the next year.”

Whether this positive result for June, albeit marginal, will be indication of a greater progress to come is to be determined. But for certainty, Chicagoland, Illinois, and the nation still remain in discordant flux of rapid foreclosures.

Managing Foreclosure Troubles

There is much recourse if you, as a local resident, happen to receive notices of a foreclosure. Yet, simply doing nothing is the least advisable course of action. An Illinois foreclosure defense lawyer can provide you the tools and knowledge to manage this calamity. Our attorneys can review your case and illustrate how potential options like a loan modification, a short sale, or enacting your equitable right of redemption may be suitable in your situation.

It is crucial that you fully understand the long-term repercussions of your foreclosure future. Consulting with an experienced attorney is a primary step in managing this predicament. You do not have to and should not face bank negotiations alone. Please, contact one of our accomplished attorneys today and let us help you navigate through this difficult process.

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Chicago Tribune on the “Short Sale Maze”

Illinois Foreclosures Rise in May

Chicago Tribune on the “Short Sale Maze”

Today the Chicago Tribune published a story on the continued complexities with short sales. The Oak Park and River Forest short sale lawyer at our firm appreciate the confusion the reigns among many local residents who are struggling with their homes and trying to learn about all of their options. Short sales are often a terrific way to get a fresh start with fewer long-term financial consequences. However, trying to work through a short sale is often stressful and baffling for the uninitiated.
At the very least, sellers (and buyers) should know what they are getting into when working through a short sale--the aid of a legal professional is often essential.

There is nothing all that complicated about the idea of a short sale. It is simply an agreement where a lender (bank) agrees to let a homeowner sell the house to a third party for less than the amount owed on the home. This allows the seller to get out of the mortgage without going through foreclosure, and, when done properly, to be relieved of a future deficiency judgment from the bank. The bank often prefers this, because it may be less costly and quicker than a foreclosure. While the lender does not like to give up on money it is owed, it sometimes makes sense for the lender to cut their losses earlier rather than later.

The Oak Park and River Forest real estate attorneys know, however, that the actual mechanics of a short sale quickly become complex.

According to a new report from the National Association of Exclusive Buyer Agents, in many areas only about 25% of short sale purchase contracts actually make it to closing. However, about 50% of homes offered as short sales actually end up being sold in that manner. In other words, about one in two short sellers will complete the process successfully, but many of them will need to go through multiple offers before everything comes together.

Reasons for the low success rates are varied. At a basic level, many deals fall through simply because of the time it takes for everything to come together. Buyers often cannot wait as long as necessary--months and months--and end up walking away. New guideline changes now in effect last month regarding homes backed by Fannie Mae and Freddie Mac are seeking to speed up the process. However, it remains to be seen if the new guidelines will actually translate into stepped up approval rates and speedier decisions by the banks.

No matter what, properly preparing the “hardship package” is critical for the seller. Not providing a thorough package may lead to significant delays and a scuttled deal. Having help with this is critical.

Though many challenges to short sales remain, it is important for local families not to write off the option. In many cases the sale fails because sellers do not have close professional assistance to ensure they navigate the process effectively. Short sales are still a popular option. In this first half of this year alone, about 110,000 homes were sold via short sale--about 12% of all home sales.

If you are in Oak Park, River Forest, or throughout Chicagoland, consider getting in touch with our office to learn more about your options and to see how we can help.

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Oak Park Foreclosure Defense Lawyers Discuss the State of Illinois Foreclosure

The Right of Redemption—or lack thereof—in Illinois

Most US states have a statutory condition that allows for the repossession of property after a foreclosure has occurred.  In these states, the redemption comes at a price; in general terms, if the individual is able to accumulate the finances to repay the debt in a certain time, he or she is able to reclaim that property.  Yet, our Oak Park real estate lawyers often explain how Illinois does not have this statutory “right of redemption” which makes the foreclosure process all the more difficult and precarious. Equitable Right of Redemption

Instead, the state of Illinois has what is known as an “equitable right of redemption.”  This entitlement is quite similar to its statutory cousin, but is a pre-foreclosure measure.  A mortgagor in default may be able to exercise this right over the period of seven months after the date of service or the first publication date, or three months after the date of entry of judgment of foreclosure—whichever is later.  Moreover, these time spans can even be shortened.  When the court deems a property abandoned, the redemption period is cut down to 30 days after the date of judgment for foreclosure.  All foreclosure sales cannot occur until the redemption period expires.

Waiving Redemption Rights

Homeowners in Illinois have the option to waive their right of redemption, only if the lender agrees to waive his or her own right to a deficiency judgment.  A deficiency judgment is a decree against the borrower or debtor whose foreclosure sale did not produce sufficient funds to pay the mortgage in full.  If a deficiency judgment is granted, the lender has permission to collect the required money by any legal means, including levying assets and garnishing wages.  If such finances to reclaim the home are unattainable, it would be wise to consider waiving this right in order to escape a future deficiency judgment.  In contractual terms, the homeowner and lender must file written consent waiving their rights.

Applying Your Right of Redemption

If a homeowner wishes to repossess his or her property, the state of Illinois requires individuals to file a notice of intent to redeem with the court; this notice must be filed five days before exercising the right.  Furthermore, persons must provide necessary proof of adequate funds.  In total, the redemption price includes the amount of the loan plus attorney fees, court costs, outstanding insurance and taxes and other related fees.  The exact amount owed is specified in the foreclosure judgment.  Payment should be made out directly to the clerk court.

The Snares of Foreclosure and Your Relief

Redemption issues in the foreclosure realm can be treacherous, particularly in the state of Illinois.  For one, in respect to waiving redemption rights, it is an important as a homeowner that you are protected from deficiency judgment.  In addition, exercising your right of redemption is controlled by specific measures and difficult vernacular.  The burden of negotiating with lenders should not all be on your shoulders.  The highly experienced Chicago, Oak Park, and River Forest real estate lawyers at the Emerson Law Firm can provide a helping hand to overcome these obstacles.  Redemption troubles are just one of the many areas in which these attorneys can provide you and your family with these difficult issues.

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