If you’re behind on your mortgage payments and you live in Illinois, you might be wondering what happens during a foreclosure in your state. Below you can learn about:
You’ll also learn about significant protections for homeowners in foreclosure under federal law, including the 120-day preforeclosure period.
Under federal law, in most cases, a loan servicer must wait until you're over 120 days' delinquent before officially starting the foreclosure process. (12 C.F.R. § 1024.41). This preforeclosure period is an excellent time to submit an application to your servicer asking for an alternative to foreclosure. You might be able to stay in your home by working out a repayment plan or modification, for example, or give it up without going through a foreclosure in a short sale or deed in lieu of foreclosure.
Federal law also provides other protections to homeowners facing a foreclosure, like the following:
Illinois foreclosures are judicial, which means they go through the state court system. To begin the process, the foreclosing bank files a lawsuit. You’ll get notice of the lawsuit when you’re served a summons and complaint, along with a notice advising you about your rights during the foreclosure process. (735 Ill. Comp. Stat. § 5/15-1504.5). You generally have 30 days to file an answer with the court.
If you don’t respond to the suit, the court will enter a default judgment giving the foreclosing party permission to sell the home at a foreclosure sale. By contrast, you can raise one or more defenses by filing an answer. The foreclosing bank might then ask the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the bank because there’s no dispute about the important aspects of the case. If the court grants summary judgment for the lender—or you lose at trial—the judge will order the home sold at a foreclosure sale. A notice of sale must be published three times between 45 and seven days before sale and mailed to borrower at least ten business days before the sale. (735 Ill. Comp. Stat. § 5/15-1507, Illinois Supreme Court Rule 113).
“Reinstating” is when a borrower catches up on a defaulted mortgage's missed payments, plus fees and costs, to stop a foreclosure. Under Illinois law, the borrower may reinstate the mortgage loan within 90 days after the borrower has been served with a summons or by publication, or has otherwise submitted to the jurisdiction of the court. (735 Ill. Comp. Stat. § 5/15-1602).
Though, as a practical matter, many banks and servicers allow the borrower to reinstate at any time prior to the sale.
Some states allow the borrower to redeem the home (reclaim it) within a specific period after a foreclosure. Illinois law provides a general right to redeem before the sale and a special right to redeem after the sale.
In Illinois, the borrower can redeem the home until the later of:
To redeem before the sale, you'll have to pay off the full amount of the loan, plus various costs.
Illinois law also provides a special right to redeem if:
In this situation, the borrower may redeem within 30 days after the court confirms the sale by paying the foreclosure sale price plus interest and costs. (735 Ill. Comp. Stat. § 5/15-1604). (To get details on redemption rights in Illinois, see Nolo’s article If I lose my home to foreclosure in Illinois, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a deficiency. Some states allow the bank to seek a personal judgment—called a deficiency judgment—against the borrower for this amount. Other states prohibit deficiency judgments with anti-deficiency laws.
In Illinois, the foreclosing party can get a deficiency judgment as part of the foreclosure action if:
The foreclosed homeowner can remain in the home for 30 days after the court confirms the sale. If you don’t move out, the bank can ask the sheriff to remove you from the prpperty. (735 Ill. Comp. Stat. § 5/15-1701, 735 Ill. Comp. Stat. § 5/15-1508).
If you want to learn more about the foreclosure process in Illinois—or you want to find out if you have any potential defenses to a foreclosure—consider talking to a lawyer. It’s also a good idea to make an appointment to speak to a HUD-approved housing counselor, especially if you want to learn about different loss mitigation options.