Monday, February 25, 2013

New Illinois Supreme Court Rules Aid Struggling Homeowners

Are you currently dealing with a pending foreclosure?  The Illinois Supreme Court recently issued new rules that will affect the nearly 77,000 pending foreclosure cases in Cook County.  Last Friday, the Chicago Tribune reported that that these new rules will require lenders to exhaust all efforts to help borrowers before they seek a foreclosure judgment.  In fact, lenders will have to prove that they’ve taken certain steps to reach a resolution with homeowners before they can take any final actions.  The Chicago Business Journal reported that the rules are set to take effect by June 1 at the latest, impacting the nearly 139,000 homes in our state that are currently in the process of foreclosure.

What will these rules mean for current homeowners?  In brief, the changes are going to make it more difficult for lenders to foreclose on struggling borrowers.  They’re designed to “better inform and protect the tens of thousands of Illinois homeowners” who are still in serious danger of losing their homes due to the crash of the housing market nearly six years ago.  If you’re worried about losing your home, these new rules may be here to help.

What Led to the New Illinois Rules?

The new rules, according to the Chicago Tribune, are nearly two years in the making.  They reflect legal shifts across the country that have been aimed at struggling homeowners.

In the past year alone, many national efforts have contributed to protecting homeowners who are already in the process of foreclosure or nearing foreclosure.  For example, the $25 billion national mortgage foreclosure settlement from 2012 involved the nation’s five largest mortgage servicers in making some changes to the foreclosure process.  That settlement intended to fix certain problems by requiring closer monitoring of foreclosure documents to prevent dual-tracking, a process in which lenders work with borrowers to help them stay in their homes while they also take steps to repossess those very same homes.  According to the Consumer Financial Protection Bureau, these mortgage servicing rules are scheduled to go into affect in about a year, early in 2014.

With rising foreclosure problems in Illinois, the state Supreme Court wanted to step in to help.  In April 2011, Chief Justice Thomas Kilbride and Justice Mary Jane Theis formed a 14-member committee to consider ways for improving the foreclosure process and submitting recommendations to the Illinois Supreme Court.  At this point in 2011, there were 70,000 pending foreclosures in Cook County alone, and the numbers have since gone up.

Related to the national rules, the committee made suggestions for improving the foreclosure process in Illinois.  As a result, the new Illinois state Supreme Court rules will also seek to correct problematic issues in the foreclosure process, but they’ll be broader reaching.  The Illinois rules will apply to all mortgage services, and unlike the national ones, these rules will take effect much earlier.

What Changes Can I Expect to See with the New Rules?

By June 1st, the latest date by which these rules will go into effect in our state, lenders will be required by law to take extra steps before filing for a foreclosure judgment.  As mentioned earlier, lenders will have to show that they have exhausted avenues by which to prevent homeowners from losing their homes.  What does “exhaustion” mean here?  The Chicago Business Journal emphasizes that it places the burden for a foreclosure on the lender to show that they’ve done all they can to reach a resolution with the borrower before seeking a foreclosure judgment.  The rules specify that lenders will be required to “submit detailed documents at the start of the foreclosure process,” and they will also have to abide by procedures for notifying borrowers who are in default and in danger of losing their homes.

Are you one of the many homeowners in Illinois who is facing foreclosure?  An experienced foreclosure defense attorney can discuss your options with you today.  Contact us to learn more.

See Related Blog Posts:
New Law Speeds Up Illinois Foreclosures
More Funds Committed to Illinois Foreclosure Victims

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