Friday, October 28, 2022

Zombie Foreclosures are Returning to the Chicago Area

You may have heard about zombie foreclosures in the Chicago area in the past. According to a recent report from ABC 7 News, rates of zombie properties and foreclosures have increased in Chicago, while a report from National Mortgage Professional emphasizes that the number of nationwide zombie foreclosures has been “ticking upward again.” What should you know about zombie foreclosures and, ultimately, about avoiding foreclosure if you can? Consider some of the following information from our Oak Park foreclosure defense lawyers.

What You Should Know About Zombie Properties and Foreclosures

What is a zombie foreclosure? You might remember the term from a decade ago when the housing bubble burst and home foreclosures were common in Chicago. In short, a zombie foreclosure is a term that refers to a property where the homeowner knows the bank has initiated the foreclosure process, and they assume that foreclosure is inevitable, so they move out and abandon the property. In Chicagoland, many of those homeowners incur significant fines — sometimes tens of thousands of dollars that they would not have owed otherwise.

According to the report from National Mortgage Professional, zombie foreclosures are up by nearly 4 percent from this same time last year, and the overall rate has been growing incrementally over the previous quarters. Still, residential foreclosure rates are low, but the steady increase in zombie foreclosures could be a sign of bigger issues in the future.

You May Still Be Able to Avoid Foreclosure

Before you assume that a foreclosure is certainly going to take place, you may still be able to take steps to avoid foreclosure and protect your credit. To be clear, you should get in touch with an Oak Park foreclosure defense attorney before moving out of your house and assuming the foreclosure process is a foregone conclusion.

Depending on your circumstances, you could have a few options available. First, if you are eligible for Chapter 13 bankruptcy, it is possible that you could still have a path to keep your home. By filing for Chapter 13 bankruptcy, you will immediately have the protection of the automatic stay. The automatic stay will halt the foreclosure process at any stage, whether the bank has only just initiated the foreclosure process or your home is nearing a foreclosure sale. Then, through the debt reorganization process that is part of a Chapter 13 bankruptcy case, you can catch up on mortgage payments and become current again with your lender.

Even if you cannot stay in your home, you may have options for avoiding foreclosure, even at a later stage of the foreclosure process. If your home could be sold to a buyer, you may be able to convince your lender to agree to a short sale, and your foreclosure defense attorney can help with this process. Through a short sale, you can sell your home to a buyer for less than what you owe, and you can have the bank agree to forgive the remaining debt. Or, if a short sale is not possible, the bank might agree to a deed in lieu of foreclosure. With a deed in lieu, you will reach an agreement with your lender that you cannot make payments, and you will voluntarily turn over your home to the bank. With a deed in lieu, it will be important to work with a lawyer to determine how you can avoid a deficiency judgment.

Contact an Oak Park Foreclosure Defense Attorney Today

If you are facing foreclosure, you should seek help from one of our Oak Park foreclosure defense attorneys as soon as possible. Do not hesitate to get in touch to learn more about defending against foreclosure and protecting your credit from the effects of foreclosure. You may have more options than you think. Contact the Emerson Law Firm today for more information.

See Related Blog Posts:
What are the Steps in a Short Sale?
Foreclosure Filings Increase by More Than 15%