The Step by Step Guide to Illinois Foreclosure (Pre-Courtroom)
This guide will teach you a very brief overview of how Foreclosure works in Illinois. This is part one of the guide that teaches you what will happen before you spend much time in a Courtroom.
Missed PaymentsBefore the Bank can sue you to foreclose your mortgage, they have to evaluate you for a loan modification or a short sale under the HAMP and HAFA programs.
After 2 missed mortgage payments, the Bank gives you a 30 day ultimatum to catch up. If you tell them that you are working with an approved housing counselor, you will get an extra 30 days under HAMP.
During this time you'll receive a Grace Period Notice.
Grace Period NoticeThis is a letter you're required to receive in BOLD 14 point type. If the Bank does not send this letter, it is very difficult for them to continue to foreclose.
It says this:
Your loan is more than 30 days past due. You may be experiencing financial difficulty. It may be in your best interest to seek approved housing counseling. You have a grace period of 30 days from the date of this notice to obtain approved housing counseling. During the grace period, the law prohibits us from taking any legal action against you. You may be entitled to an additional 30 day grace period if you obtain housing counseling from an approved housing counseling agency. A list of approved counseling agencies may be obtained from the Illinois Department of Financial and Professional Regulation.
Service of SummonsApproximately 30 days after the Grace Period Notice (GPN) is sent to you, but no fewer than 120 days after your first missed payment, the Bank could file its foreclosure action.
The Sheriff, or a special process server, will serve you the foreclosure complaint. Typically they come to your home and hand you the papers. If the server comes to your home a few times and cannot find you, the notice of the lawsuit might go into the local papers.
Your time to respond to the Complaint begins 30 days after you are served unless you are in a mandatory mediation county.
Mediation CountiesCook County gives access to housing counselors and foreclosure legal assistance at each judge's respective help desk and from time to time on the 7th floor of the Daley Center. Call (877) 895-2244 for details.
Kane County has a mandatory opt-out mediation program. You will be given a mediation date, and as long as you appear, you can participate in the court sponsored mediation.
Will County is similar to Kane County's program, but your date to appear is listed on the Complaint itself.
Lake County's program is an opt-in program where homeowners can use the Court Sponsored mediation program so long as they attend an education session offered by the Affordable Housing Corporation within 35 days of receipt of the summons. They can be reached at (847) 796-8050.
What Is Mediation?Mediation is a program where you and the Bank should work together to attempt to solve your foreclosure without litigation and those fees involved.
Mediation is confidential and the mediator does not force the parties to agree to a result.
When you appear at mediation, you will be given the opportunity to explain to the Bank if you want a loan modification, short sale, deed-in-lieu or a consent foreclosure solution.
Because this mediation session will include an examination of your financial ability to repay the loan if modified, you should contact an approved housing counselor or your mediation program coordinator to see what documents you might need.
Mediation ResultsIf mediation succeeds, you will have reached an agreement with the bank on whether you will receive a loan modification and retain your home with either a new HAMP modification or a trial payment plan. You might also come to terms regarding short sale figures, or a consent foreclosure and could agree to give up your home to either a new buyer or back to the Bank if certain conditions are met.
If mediation does not resolve the issues, you will be given a date to appear in the courtroom for the start of litigation. Your date to make your first response to the court will typically be 30 days after the mediation program sends you a letter saying mediation terminated.
Please note, your obligation to the Court will be to file an Appearance (which is the form that has your address on it) and another pleading. You can file an answer, which goes line by line through the Complaint and admits or denies the allegations, or a motion to dismiss, which states that the Complaint is defective for some reason.
All homeowners stepping into a courtroom should first consult an attorney about any defects in the service of the Complaint or any defects apparent from the face of the Complaint itself. These motions to dismiss are "use it or lose it" and if they aren't brought up at the first possible opportunity, they are typically waived.
Before the 30 day period to file the response passes, the homeowner and her attorney should work together to file the proper response to the Complaint, and a proper appearance.
ReinstatementTo save the home without winning the foreclosure case, there are few options once litigation starts. The only guaranteed option is Reinstatement.
The homeowner has the absolute right to reinstate the loan within 90 days after receiving the foreclosure complaint. This does mean a sizable payment of missed payment, attorneys fees, court costs and all other fees from the escrow account that were incurred during the time that you missed payments.