Strategic Defaults Aren't Worth the Trouble?

Have you been thinking about a strategic default?  Do you currently have a mortgage that’s owned by Fannie Mae or Freddie Mac?  According to a recent article in the Chicago Tribune, Fannie and Freddie are starting to get serious about homeowners who have the money to make their monthly loans payments but decide to walk away from their mortgages.  Since the housing crash, homeowners have been electing to walk away from mortgages in which they owe more than the house’s current market value.  As a result, the homes go through the foreclosure process and are sold at auction.  However, foreclosure sales often don’t generate enough money to cover the homeowner’s loan balance, and they can be liable for the remaining amount in a deficiency judgment.

What Exactly is a Strategic Default?

You might have heard the term “strategic default” since the collapse of the housing market.  In short, it’s a situation where a borrower decides to stop making payments on his or her loan.  While strategic defaults can occur during any economic period, they’ve been numerous in the last five years.  The housing crash caused the market value of homes across the country to drop dramatically, leaving mortgage borrowers in situations where they owed a lot more money on their home loan than their house was even likely to garner on the market.  In other words, homeowners owed more on their loans than the market value of their property.  As a result, many of these borrowers began to simply walk away from the property, allowing it to go into foreclosure—a “strategic default.”

However, this is a big problem for Illinois homeowners.  Specifically, what happens to a borrower when his property sells for less than what he owes on his loan?  As you might imagine, the lender can be out thousands of dollars in these situations.  Depending on which state you’re in, lenders may be able to go after a borrower for additional funds that the lender can’t get back in a foreclosure sale.  In Illinois, lenders can legally go after homeowners for deficiency judgments when the foreclosure sale garners less money than what the borrower owes on the loan.

Fannie and Freddie Haven’t Held Defaulters Accountable

Recently, data has shown that Fannie and Freddie have been generating significant profits.  However, these “government-sponsored enterprises” historically haven’t taken substantial efforts to hold defaulters liable for the money they owe on their mortgages.  According to the article in the Chicago Tribune, Fannie and Freddie “haven’t done a particularly good job at pursuing deficiency judgments,” and the Office of the Inspector General at the Federal Housing Finance Agency (FHFA) isn’t happy about this.

According to the FHFA, they’re going to ensure that Fannie and Freddie “clean up their acts.”  What does this mean for consumers?  In short, if you’re considering a strategic default on a Fannie or Freddie loan, it means that those government-sponsored enterprises are going to go after you.  The Chicago Tribune explained that “going after strategic defaulters is big money.”  Indeed, Freddie Mac has lost out on nearly $4.6 billion from deficiency judgments since 2008.  While Freddie might not have been able to recover the entire amount (given that many homeowners actually had no money left to make their mortgage payments), the problem is that Freddie didn’t even consider trying to recover those funds.

If you think those numbers are staggering, Fannie Mae is even worse.  By the end of 2012, Fannie owned at least 105,000 foreclosed properties, which had then been valued at $9.5 billion.  The key for deficiency recoveries is acting quickly.  States that allow lenders to pursue deficiency recoveries—including Illinois—have specific time windows in which those lenders are allowed to go after the money.

Now, FHFA is new requirements for Fannie and Freddie that will “manage their deficiency collection process,” ensuring that strategic defaulters aren’t simply allowed to walk away from a loan.  If you have questions about how the FHFA’s rules and policies are likely to affect you, contact the licensed Illinois foreclosure defense lawyers at the Emerson Law Firm to discuss your case.

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Buying a House After Foreclosure

As the housing market continues to recover and many Americans find themselves back in the position to consider buying a home, it’s important to know the details about buying a house after you’ve had the bank foreclose on your property.  Are you thinking about becoming an Illinois homeowner, either for the first time or after a foreclosure?  A recent article in the Chicago Tribune ran a story about what it takes to buy a home after foreclosure.  Is it only about credit scores and down payments?  Or is there more to the equation?  These questions are popping up across the country, and their answers will be important for Illinois families who are beginning to think about owning a home—again.

If you’re concerned about what it takes to buy a property after foreclosure, it’s important to speak to an experienced real estate attorney.  The lawyers at the Emerson Law Firm have been helping homeowners and potential homeowners for years, and they can speak to you today.

The Importance of Your Credit Score and Credit Report

In the Chicago Tribune article, a local couple wrote into the newspaper, telling “Real Estate Matters” about their homeownership history.  In short, the couple had lost a home to foreclosure, and now they’re hoping to be eligible to buy again one day in the future.  So what do Illinois homeowners like this couple mentioned in the Chicago Tribune need to know about buying a home after they’ve lost a property to foreclosure?

First, credit histories and credit scores are going to be important.  Since your credit score follows you into a marriage, if you’re currently thinking about buying a property with a spouse or significant other, it will be essential to know what each of your credit histories and credit scores will look like to your lender.  In terms of the key number, the Chicago Tribune’s “Real Estate Matters” says credit scores at 750 or above are ideal for homeownership: “we’d like to see your score in the mid- to upper 700s as you consider buying a home.”  Why?  According to the article, “you’ll have an easier time obtaining a mortgage loan and will obtain a better rate.”  In other words, “in the long run, you’ll save quite a bit of money if you are able to get the best rate possible having a higher credit score.”  The key takeaway when it comes to credit scores and credit reports is this: higher scores result in better rates, which save you money.

It’s a good idea to obtain a copy of your credit report, ensuring that you don’t have any “potentially negative information” that a lender will see.  If you do see negative information, you’ll want to make sure it’s accurate.  If it’s not, you can dispute the information with the credit reporting agency.  However, if the information is accurate, it can lead to high interest rates and, in some cases, the inability to obtain a home loan.

Why You’ll Need a Down Payment

More than your credit score, you’ll want to make sure you have a significant down payment if you want to buy a home.  In some cases, potential homeowners may qualify for special home loans through the U.S. Department of Housing and Urban Development (HUD).  If that’s the case, you might not need a lot of cash for your down payment.  However, if you’re trying to prove to a lender that you’re a serious homebuyer, you’ll want to be able to show that you really understand what it takes to buy a home and make monthly mortgage payments.

In most cases, if you’ve lost a property to foreclosure, you’ll need to work to improve your credit score, and you’ll also want to make sure you have a large cash down payment before you think about entering into another mortgage agreement.  The dedicated attorneys at the Emerson Law Firm have specialized knowledge about the foreclosure process and the real estate market in Illinois.  Contact us today.

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Why Do Short Sales Take So Long?

Why Do Short Sales Take So Long?

Earlier this month, the Chicago Tribune ran a story about a woman who had been hoping to buy a short sale property in Michigan.  According to the article, this woman’s personal story exposes some of the difficulties potential homebuyers encounter when they try to buy a short sale.  Short sales are basically “pre-foreclosure” sales, or a final effort to sell a house before it officially goes into foreclosure.  Over the past couple of years, short sales have been popular options for Americans looking to buy a home.  But are they the best option?

In a previous blog post, we told you about some of the “short sale snafus” that people often encounter.  Generally, one of the most frustrating issues about these sales are their uncertain time periods.  But many potential homebuyers also encounter pricing problems between the seller and the lender, as well as lenders who push for foreclosure when the short sale isn’t going quickly.  Experienced real estate attorneys can help to guide you through this confusing process.  If you have questions about buying a short sale, contact the Emerson Law Firm today.

One Woman’s Short Sale Story

To get a better idea of some of the hang-ups associated with buying a home as a short sale, it might help to take a closer look at the story of the Michigan homeowner whose personal account appeared in the Chicago Tribune.  The article explained that she made an offer on a property, but her offer “went nowhere,” and the house ended up in foreclosure.  The woman moved her family into the house, but Freddie Mac told her that it “doesn’t allow tenants to purchase occupied homes.”  She contacted her congressional representative, but it didn’t go anywhere.  Next, she wrote to the Chicago Tribune.

According to the newspaper, the woman’s letter said, “I have great credit and have been preapproved for the purchase.  And I will gladly accept the home as is without our government having to spend one more dime of your money or mine.  It seems so simple.  Can you help point me in the right direction?”   

The newspaper quickly heard from a spokesperson for Freddie Mac, who agreed to track down this case.  Only a few weeks later, the woman’s sale had gone through.  Yet, the Chicago Tribune remained interested in piecing together the timeline of a foreclosure.  What takes so long?

A Short Sale Timeline

It can take nearly a year (and sometimes even longer) for an offer on a short sale to be considered.  Why is this the case?  A big issue is communication between the buyer, the seller, the lender, and the servicer.  According to the article, “the right people aren’t getting the right information in a timely manner.”  And moreover, the poor communication between the parties involves leads to an “opaque process” that continues to “confound borrowers, buyers, sellers, lenders, and servicers alike.”

In this specific case, the owner of the property hadn’t been in contact with the lender and the investors, and no one could find him.  As a result, the eager homebuyer couldn’t continue with the sale, and she and her family were left in the dark.  In other words, if a seller can’t be reached, a property can’t be sold.  Once the property was foreclosed on, Freddie Mac had a clear title on the property, which allowed the buyer to move forward with the home.

There is a lesson to be learned here.  Short sales are especially complicated because they involve a lot of different parties, and they all have to communicate and negotiate with one another before the buyer can move forward on the short sale.  Freddie Mac says that the key to buying a short sale is staying “in constant contact with the servicer.”  In short, communication is essential.

If you’re considering a short sale, you’ll need an attorney on your side to handle the complications associated with these properties.  Contact the experienced lawyers at the Emerson Law Firm today to discuss your case.

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Short Sale Snafus

Short Sales Popularity Continues to Rise

Hispanic Homebuyers Offer Hope for the Market

In recent months, we’ve seeing encouraging reports about the real estate market and an overall decline in nationwide foreclosures.  Although it might be tougher to find a property to buy in the current climate, home prices are finally on the rise and banks even seem to be turning better profits.  According to a recent article in the Chicago Tribune, Hispanic consumers are at the forefront of new homeownership.  The National Association of Hispanic Real Estate Professionals (NAHREP) agrees, reporting that “Latino potential first-time buyers have increased 38 percent since 2010.”  In fact, the NAHREP publishes an annual report on the state of Hispanic homeownership, and the most recent report contends that the Hispanic homebuyer market “is poised, due to its population size, high desire, and buying clout, to drive first-time homebuyer purchases and accelerate the nation’s economic recovery.”

However, the article suggests that these first-time buyers could be “stymied by a shortage of homes to buy and by competition from deep-pocketed investors.”  These potential limitations are echoed through an article in the Huffington Post last month, which voiced concerns about Hispanic homeownership being threatened by unfair housing practices.

Limiting Factors in Hispanic Homeownership

Perhaps if we know what’s limiting this budding market base, we might have a better idea of how to advance Hispanic homeownership in the Chicago area.

The Chicago Tribune alludes to the problem of a lack of inventory.  There are fewer houses on the market, and they have high price tags.  These factors can lead potential homeowners to make multiple offers on properties, and to be continuously outbid by others who are willing to bid even higher than the stated value of the property.  After months of this type of bidding, many first-time homeowners grow discouraged, and many stop bidding.

Often, individuals and families lose out to deep-pocket investors who can pay cash and closing costs up front.  The Huffington Post explains that “they get beat up by cash buyers and pool investors who offer a fast closing even at lower prices.”  This hurts many first-time Hispanic homebuyers, who often have to wait up to 60 days to close on their contracts based on the terms of loans backed by the Federal Housing Administration (FHA).

The NAHREP, despite its encouraging statements, has suggested that banks have also been more willing to offer low prices on foreclosure properties to cash buyers, which ends up hurting these individual homebuyers.  In many ways, the NAHREP suggests that “townships and municipalities can do their fare share” to ensure that foreclosures and other for-sale properties are in move-in condition.  In addition, they encourage banks to entertain serious offers from individual homeowners.  

In brief, the organization would like to see a focus on getting owner-occupants into foreclosures and other vacant homes, and it would like banks to move away from policies that “favor large investors.”

Encouraging Facts and Statistics for Hispanic Homebuyers

Gary Acosta, the co-founder and executive director of the NAHREP, said that despite the obstacles Hispanic homeowners face, they “seem to be very resilient, especially coming off the housing crisis.”  He indicates that Hispanic Americans are “forming households at a faster rate than the general population,” which is an arrangement that is “much more aligned with the purchase of a home.”

Acosta explains that there are some “nuances to working with the Hispanic market,” including language barriers and limited credit histories in certain cases.  Yet, he’s optimistic.  The Chicago Tribune quoted him as saying that “the major players in housing now understand, or are starting to understand, how important the Latino market is.”

If you have questions about homeownership or current terms surrounding mortgages and foreclosures in Illinois, contact an experienced attorney today to discuss your concerns.

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Dignity Mortgages May Offer Help in the Homeownership Crisis

Were you financially unprepared for the housing crash?  Are you still dealing with bad credit despite your steady income?  A newly proposed mortgage loan might be an answer to your real estate woes.  Although Illinois has yet to see the same decrease in foreclosures that many other states are beginning to experience, future mortgages for those who were hard hit by the downswings of the economy may seem out of reach.  However, according to The Chicago Tribune, housing advocates are promoting a new kind of sub-prime loan that could have positive long-term effects.

What is the Dignity Mortgage?

Renamed the “Dignity Mortgage,” this type of loan is intended for potential buyers with lower incomes and lower credit scores.  The borrowing terms still begin with “the classic sub-prime tradeoff: a higher rate for a higher-risk clientele.”  In fact, a recent article in the National Mortgage Professional Magazine colloquially described the loan as “sub-prime with training wheels.”  Yet, while loans of this type begin with higher sub-prime interest rates, those same rates would later be reduced when the borrower makes timely payments.  In short, the Dignity Mortgage works on a “good behavior” system: it starts with a high interest rate, but it rewards you by lowering your interest rate as long as you consistently make on-time payments.

The idea for the dignity mortgage comes as a response to the increasing difficulty in obtaining a home loan.  As Illinois and the nation continue to feel the effects of the housing crash, access to homeownership is a serious concern.  Housing advocates specifically cite the need for a growth in homeownership in families with steady incomes who still fall within the low- to moderate-income brackets—groups that are noticeably underrepresented in the Federal Reserve home-lending statistics.  The dignity mortgage is intended as a homeownership solution.  

What are the Long-Term Effects?

Housing advocates see only positive outcomes with the dignity mortgage proposal, since the terms of the loans preclude many of the problems that led to the housing crash in the first place.  An article in American Banker indicates that dignity mortgages, unlike many of the harmful subprime loans that are now associated with foreclosures across the country, require credit counseling programs and proof of income before borrowing.  Additionally, the loans would require a 10% down payment—no more 100% financing.  A dignity mortgage could help you to “buy the home you need, not the home you may want.”

What does a loan like this mean for you in terms of costs, payments, and interest rates?  At the start of the loan, most borrowers will pay 1.25% more than the average good-credit borrower.  For example, a borrower with excellent credit might have an interest rate of 3.5%, while a dignity mortgage borrower may start with a 4.75% interest rate.  However, after only five years of consistent on-time payments, you could find yourself in the position of borrowers with nearly perfect credit and a large initial down payment: a 3.5% interest rate for the duration of your loan.  Although these mortgages have yet to be approved by lenders, housing advocates insist that these loans could help to increase homeownership while preventing future foreclosures.  Are you are currently at risk of foreclosure or reconsidering your homeownership options?  Contact a real estate attorney today to discuss your options.  

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July Numbers: Foreclosure Activity Down Almost 8% in Illinois

Although the country appears to be still reeling from the May spike, we look as though we are heading in the right direction.  For two consecutive months now, both the state and nation’s foreclosure activity has decreased according to RealtyTrac.  As many of us saw, May gave Illinois a shocking 29% increase in foreclosures from the previous month.  Yet, the numbers were down again in July posting a 7.7% monthly decrease for the state; this is in conjunction with June’s totals: A roughly 8.5% decrease.  The country saw just under a 3% decrease from last month and an astounding 10% annual decrease in all foreclosure activity —which includes default notices, auction-sale notices, and bank repossessions.  Yet, don’t be so keen to celebrate; we are still very much in trouble.

http://www.realtytrac.com/trendcenter/il-trend.html

Although the Windy City still remains as “The Number One Foreclosure City in the Nation,” these numbers are marginally encouraging for Illinois and Chicagoland.  It appears that all relevant statistics display decreases in foreclosure activity, according to RealtyTrac.  On average, one in every three hundred eighty five houses foreclosed in July—a 10% decrease as compared to June’s numbers.  Furthermore, Cook County itself has witnessed over a twelve percent reduction in foreclosure filings.  

Yet, by no means do these numbers conclude success.  Illinois has moved up to the third worst foreclosure state in the country, behind just Florida and California.  The average household foreclosure rate for Illinois mentioned earlier pales in comparison to the national average: one in every six hundred eighty six homes.  Illinois remains as a foreclosure hot bed, mired in a seemingly unsolvable mess.  Moreover, Cook County’s rates are almost 130% over the national average.  Although the monthly differential brings positive news, the Chicago Tribune reports it is an astounding 37% increase as compared to July 2011.  37%!  As for the rest of the nation, California posted a horrific 42,081 houses in the foreclosure process for the month of July.  By no means are we out of the woods.

"Lenders are much less likely now than they were even a year ago or two years ago to repossess a property after they've started the foreclosure process," said Daren Blomquist, a vice president at RealtyTrac.

Clearly, the country and the state of Illinois still face foreclosure demons.  Foreclosure is, unfortunately, plaguing our nation.  Our Oak Park and River Forest foreclosure attorneys know that this is a complicated and intricate issue.  The Emerson Law Firm aids multitudes of individuals with  foreclosure troubles.  If you are dealing with a foreclosure, please consider giving our firm a call in order to help you traverse this difficult process.  

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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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Bank of America Announces Principal Reduction Plan for Underwater Homeowners

Earlier this year, federal and state officials announced a national-level agreement between the federal government and 49 state attorneys general and several large mortgage servicers to address mortgage loan and foreclosure abuses.  The servicers included Bank of America, JP Morgan Chase, Wells Fargo, Citigroup, and Ally Financial.  The final deal emerged out of a series of negotiations between the financial servicers and government officials, resulting in a total settlement of $25 billion.

Bank of America is now taking an additional step toward acknowledging its role in the foreclosure crisis, reports the Los Angeles Times.  The bank intends to reduce by about $100,000 the amount owed on as many as 200,000 underwater mortgages.  The promise is part of a $1-billion “side deal” to the earlier $25-billion foreclosure settlement.  (To read more about the original $25 billion settlement, see our prior post here.)  Our Oak Park foreclosure defense lawyers know this deal could provide important financial relief to struggling homeowners.  According to a Bank of America spokesman, the principal reductions could eliminate the entire underwater portion of some mortgages, with the average reduction projected to be approximately $100,000. 

A mortgage is deemed “underwater” when the amount owed on the mortgage exceeds the value of the home.  Typically, however, a homeowner’s concerns do not stop there.  Once a mortgage is underwater not only is the homeowner paying for a house that has lost significant value, but also he or she may fall behind on the mortgage, which generally results in hefty penalties and fees.

This “side deal,” while potentially helpful to a number of homeowners, is also self-serving.  By reducing the amount owed on its mortgages, Bank of America could cut significantly the amount of penalties it owes due to the settlement.  In fact, the $3.25 billion the organization faces in penalties could be reduced by approximately $850 million.

If you are a homeowner whose loan was serviced by Bank of America and you were at least 60 days delinquent on your mortgage as of January 31^st, you may be eligible for an underwater mortgage reduction.  However, only loans serviced by the bank or private investors are eligible for the program.  That does include loans serviced by Countrywide Financial Corporation (“Countrywide”), the sub-prime lender that Bank of America purchased in 2008 and which led to many of the company’s woes due to the number of “troubled” loans Countrywide brought with it.  Unfortunately, loans owned or backed Fannie Mae, Freddie Mac, the Federal Housing Administration, or the Veterans Administration are not eligible for the principal reduction program.

According to Bank of America, about 200,000 homeowners will be eligible for the principal reduction program.  If you are a Chicago homeowner and you think you may be eligible, you can call 877-488-7814 for more information.

Those of us working in Oak Park foreclosure law know that no one wants to lose their home.  We also know there is no shame in asking for help.  Our attorneys are here to listen to your questions and concerns and will do our best to explain all of the legal options available to you.

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Oak Park Foreclosure Defense Lawyers Discuss the State of Illinois Foreclosure

A recent Chicago Tribune article discusses the condition of Chicago mortgage foreclosure, noting that the state is the third worst in the nation in foreclosures despite overall improvement across the country.  Illinois and New Jersey still trail Florida, but both states are getting worse.  In fact, according to the chief economist of the Mortgage Bankers Association, the Illinois foreclosure rate is more than double that of California.

One of the reasons Chicago’s foreclosure rate is so poor is not because loans necessarily are entering foreclosure at a greater pace than in other states, but because they stay in foreclosure for longer periods of time.  For example, according to the Chicago Tribune, the percentage of loans in foreclosure in judicial states is at an all-time high of nearly 7% during the first quarter.  In contrast, in non-judicial states the rate is 2.8%, the lowest since early 2009. 

Illinois is a judicial foreclosure state, which means a lender must sue a homeowner in state court.  Those of us working in Illinois mortgage foreclosure know that while judicial foreclosure can take longer, it typically yields more protections for debtors.  In non-judicial foreclosure states, a homeowner receives a notice of default from the mortgagee.  Thus, the mortgagee does not need to file an actual lawsuit to begin the foreclosure process.  Oak Park foreclosure defense lawyers know this can be very problematic because some debtors may never receive a notice of foreclosure due to errors in the system, putting them in jeopardy of losing their homes outside of the protections of a court.  In judicial foreclosure states, for instance, homeowners have the constitutional protection of due process, which requires the state to protect all legal rights of an individual and to ensure the legal procedures are fair. 

Even though Illinois is a judicial foreclosure state, thus affording its citizens more protections than those living in non-judicial foreclosure states, creditors may try to play hardball or take advantage of debtors who are unrepresented by legal counsel.  If you are concerned you may be facing Oak Park mortgage foreclosure, consider consulting with a legal professional.  Homeowners should not give up.  There are many foreclosure defense options at your disposal.  Sometimes allowing your home to be foreclosed upon is the best option, but it is important to make an informed and careful decision because a house is likely one of the largest financial investments you will ever make.

More than a year ago, the Illinois Supreme Court formed a committee to study our state’s mortgage foreclosure process, as well as how other states are dealing with large volumes of foreclosure cases.  The backlog of foreclosures, some of which is due to the exposure of lenders’ fraudulent behavior including robo-signing, is clogging the system.  Some of the committee’s recommendations to ease the backlog include paperwork changes and providing homeowners with more notice about their rights.  However, the committee also suggested that foreclosure sales should be held within 45 days of the expiration of the redemption period, the date by which a homeowner can make the mortgage current and keep the property, in most cases.  Although this is only a recommendation, such a change could seriously harm homeowners’ rights, so it is important to speak with a professional if you are worried about losing your home since Illinois foreclosure law is constantly changing.

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