Friday, February 28, 2020

Five Things to Know About Foreclosure in Illinois

If you are struggling to make payments on your mortgage, it is important to know that you are not alone. Even though Oak Park residents are no longer in the midst of a foreclosure crisis as many were a decade ago, homeowners are still having difficulty making monthly mortgage payments and trying to figure out how best to manage consumer debt. The following are five things to know about foreclosure in Illinois, including ways to avoid foreclosure.

1. Refinancing Your Loan is One Option to Prevent Foreclosure While Remaining in Your Home
Refinancing is a common route for avoiding foreclosure. As a HUD fact sheet explains, a homeowner who is late on mortgage payments should learn more about assistance options, including refinancing the mortgage to a rate and length that the homeowner can afford.

2. Short Sales can Allow a Homeowner to Avoid Foreclosure, but the Homeowner Will Lose the Property
A short sale can also allow a homeowner to avoid foreclosure, but the homeowner will need to sell the house. This option also requires the lender to agree to the sale, since the lender will need to forgive any portion of the mortgage debt that it does not recoup in the sale.

3. Chapter 13 Bankruptcy is a Useful Tool to Prevent Foreclosure and to Keep Your House
Filing for chapter 13 bankruptcy is a particularly helpful way of avoiding foreclosure. Chapter 13 bankruptcy can stop a foreclosure process through the automatic stay, and it can allow a homeowner to get back on track with mortgage payments in order to keep the home.

4. Fewer Lenders are Foreclosing on Homes in Most Places, but Illinois Foreclosure Starts Are Up
Recent data suggests that the rate of foreclosure starts in many states is down as of January 2020, but that information is not true for a number of states, and Illinois is one of them. According to an article in Mortgage Orb, Illinois is one of 19 states in which the rate of foreclosure starts actually increased in January 2020 in comparison to foreclosure start rates a year prior.

Illinois did not have the highest increase of all states in the U.S.—those spots went to California, Tennessee, and Georgia, with foreclosure start rate increases of 27%, 21%, and 14%, respectively. However, Illinois ranked 4th in terms of an increase in its foreclosure start rate, with a 9% increase from January 2019 to January 2020. In other words, banks initiated more foreclosures in January of this year than they did just one year before.

5. Illinois is a Judicial Foreclosure State
If your home does go into foreclosure, it is important to know that Illinois is what is known as a judicial foreclosure state. This means that, in order for a lender to foreclose on a property, it needs to file a lawsuit against the homeowner, and the homeowner has to be served. Homeowners should know that they do have rights during the foreclosure process, including once they have been served with a complaint. The homeowner will have a specific time to file an answer, and a lawyer still may be able to help that homeowner avoid foreclosure.

Contact an Oak Park Foreclosure Defense Attorney
Do you need help avoiding foreclosure? A dedicated Oak Park foreclosure defense lawyer can help you. Contact the Emerson Law Firm today to learn about our services.

See Related Blog Posts:

How the Foreclosure Crisis Continues to Affect Single-Family Homes

How Are Foreclosure Activity and Consumer Confidence Related?