How Lenders Seize Homes: What Every Illinois Homeowner Needs to Know About Foreclosure

by Richard Fonfrias, J.D. Chicago's Financial Rescue & Bankruptcy Lawyer Fonfrias Law Group, LLC

If a homeowner doesn't make his mortgage payments according to the terms of the contract, Illinois law gives the lender the right to seize the property through foreclosure.

Illinois Foreclosure: 6 to 9 Month Ordeal

The bank sends your loan to its lawyer to initiate foreclosure proceedings against you after you have been late paying your mortgage for the third time. At this time, the bank's lawyer orders a title report. This tells the lawyer who owns the home, all loans secured by the home, any deeds of trust that remain unpaid, and any deed restrictions that limit how the property can be used.

Next, the bank's lawyers prepare the foreclosure lawsuit, which says your property can now be seized because you failed to make your mortgage payments. In addition, the attorneys prepare all paperwork related to the foreclosure including a summons that tells you the date and time you must appear in court.

The lawyers then file the foreclosure lawsuit with the court and serve you with the summons. The term service means that the bank's lawsuit and paperwork is given to you by a licensed process service or someone else authorized by the court to serve legal papers.

Simultaneously, the lawyers record a Lis Pendens with the Recorder of Deeds, which bars you from selling your home until the completion of the foreclosure.

Next, the process server presents the Foreclosure Complaint to you to you and anyone else who has an interest in your home. The law also allows the parties to be served by publishing a notice in the newspaper if the sheriff cannot reach you or the other persons who must be served. The sheriff has 60 days to serve the Foreclosure Complaint to you.

Within the following 14 days, the bank's lawyer reviews the paperwork to make sure all parties who have an interest in your home have been served with the Foreclosure Complaint. The bank's lawyer files a motion with the Court asking the Court to enter a Foreclosure Judgment against you - and giving you the date and time of your Court appearance.

You Are Allowed to Bring Your Mortgage Current

The law gives you 90 days to reinstate your mortgage loan. To do this, you pay the mortgage payments you owe, including costs. (You're permitted to reinstate your mortgage only once within a 5 year period.)

On the date you appear in court, any of these can occur:

-- Request a Continuance: This means you ask the judge to delay making a decision and to schedule a future court date. Often, this is done to give you more time to hire a lawyer.

-- Request Time for an Appearance & Answer: You are permitted to represent yourself, if you want to. If you think you have a valid defense against the foreclosure lawsuit, you can ask the judge to allow you additional time to prepare your appearance and answer.

-- Set a Date for Trial: If the judge thinks you have a valid defense, then he could set a trial date. If the Court thinks you don't have a valid defense, the judge may enter a judgment against you in favor of the bank.

-- Enter a Judgment Against You: At trial, if you lose your case, or if you cannot reach an agreement with your bank, then the judge can enter a judgment of foreclosure and sale against you. At this point, the court deems that you have no ownership interest or legal rights in your home.

You Have One More Opportunity to Save Your Home

You have a redemption period during which you can save your property from being sold. The redemption period ends on whichever of these dates is the latest: (1) if you live in the home, then the redemption period ends 7 months after you were served with the foreclosure lawsuit; (2) if you do not live in the home, then the redemption period ends 6 months after you were served with the foreclosure lawsuit; or (3) the redemption period ends 3 months after the Court enters a foreclosure judgment against you.

In this instance, to redeem your home, you must pay the full amount of the foreclosure judgment, including money you owe to the lender, taxes, lawyers' fees and court costs, lawyers' fees.

In addition, the bank must publish a notice of the foreclosure sale a minimum of 3 weeks in a row, once each week, in a newspaper of general circulation. The bank does not have to mail you a notice of the sale. The home is sold at a foreclosure sale within 7 days after the redemption period ends. If You Can Prove That ...

(1) the bank did not give notice the way the law requires, (2) the terms of the sale were unreasonable, or (3) the sale was dishonest or fraudulent - then the Court will not confirm the foreclosure sale. Otherwise, the court will confirm the foreclosure sale.

You Have One More Special Right of Redemption

You have a special right of redemption if the home's sales price is less than the amount you needed to redeem your home and if the bank bought your home. In this case, to reacquire your home, you must pay the actual selling price, plus costs and fees the Court approves, plus interest. This special right of redemption ends 30 days after confirmation of the sale.

When You Must Vacate Your Home

When the sale is confirmed, the Court gives the buyer possession of the home. Usually, the court allows you 30 days from the confirmation sale date to leave the premises. If you don't leave as required, then the bank can ask the sheriff to remove you from the premises.

Once you leave the property, then the new owner records the foreclosure deed, which verifies that the bank foreclosed on the home. And this now becomes public record.