Tuesday, February 6, 2018

What is a Judicial Foreclosure State?

According to a recent article in The Patch, Illinois had one of the highest rates of foreclosure in the country in 2017. Indeed, Illinois came in fourth for the total number of foreclosure filings last year, yet foreclosures overall dropped significantly. In total, Illinois had a foreclosure filing rate of 0.86% of the total number of housing units in the state, which still shows a decline from the previous year. In other words, foreclosure rates are declining in Illinois, yet they are still among the highest in the nation. As you have read about foreclosures in Oak Park and throughout Chicagoland, you might have come across the term “judicial foreclosure.”
Given that many homeowners in the state are still facing foreclosure, it is important to understand the difference between a judicial and a non-judicial foreclosure, and what this means for homeowners in Illinois.
Two Types of Foreclosures in the U.S.
In the country, there are two different types of foreclosures - judicial and non-judicial foreclosures. You may have heard of or seen references to judicial foreclosures in Illinois, and this is because Illinois is a judicial foreclosure state. What does this mean? It is actually a relatively simple premise: Foreclosures need to go through the court system. Other states are what are known as non-judicial foreclosure states, and as such, foreclosures do not have to go through the court.
Judicial and non-judicial foreclosures have different processes. While the basic difference between them is relatively easy to understand, it is important to carefully consider the distinctions between these two types of foreclosures and the way they affect homeowners. Since Illinois is a judicial foreclosure state, we will focus on what that means for mortgage borrowers who may be behind on payments.
How do Judicial Foreclosures Work?
For a judicial foreclosure to begin, the bank (the lender of the mortgage) needs to file a lawsuit. Because judicial foreclosures go through the court system, they tend to take a significantly longer period of time than non-judicial foreclosures. Under foreclosure laws, the following are typically the steps in a judicial foreclosure:
  • The bank first needs to send a notice of its intent to begin the foreclosure process after you get behind on your mortgage payments by 120 days or more;
  • The bank will file a lawsuit if you do not attempt to make payments on the mortgage debt you owe;
  • Homeowner receives notice of the lawsuit and can respond, which is the point at which the homeowner can raise defenses to the foreclosure; and
  • If the bank wins the lawsuit, the court will enter a judgment for the bank and a foreclosure sale usually will occur.
About half of all U.S. states are judicial foreclosure states. In non-judicial foreclosure states, the foreclosure process does not go through the court and thus is typically much quicker. It usually involves the homeowner receiving a notice of default and a notice of sale before the foreclosure sale occurs.
Contact an Oak Park Foreclosure Defense Attorney
Do you need help with foreclosure defense, or do you have questions about the foreclosure process in Illinois? An experienced Oak Park foreclosure defense lawyer can help. Contact the Emerson Law Firm for more information.
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