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When you develop a definite plan of action with well-timed, well-informed steps, you can stop the foreclosure process and save
your home. We have outlined the foreclosure process for the state of Illinois.
Judicial Foreclosure Available: yes
Non-judicial Foreclosure Available: yes
Preferred Method of Foreclosure
Judicial. Illinois does not allow power of sale non-judicial foreclosures. They are explicitly banned by statute. Instead, foreclosure is
done by filing a lawsuit. The suit may seek either strict foreclosure or a foreclosure under the Illinois Mortgage Foreclosure law. The
latter approach is much more common that strict foreclosure. A new procedure also exists to speed up the judicial foreclosure
under the Illinois Mortgage Foreclosure Law called "consent foreclosure." The Illinois Mortgage Foreclosure law spells out in detail
what must be included in the lender's lawsuit (petition) for foreclosure. If the lender strictly observes the requirements for proper
petition, then it is possible for the lender to win the lawsuit by motions without having to go to trial.
Consent Foreclosure
A consent foreclosure will vest all the borrower's rights and title and the lender free and clear of all claims (except liens of the U.S.
Government) including rights of reinstatement and redemption of any junior lien holder who was properly joined and who failed to
object. Upon objection, the court may hear such evidence as required and enter an order that title vests subject to the lien, or if the
junior lien holder pays the balance on the mortgage plus any additional interest, within 20 days of the entry of a court order
commanding the same, then the junior lien holder can redeem the property. The final judgment in a consent foreclosure must recite
the lender's waiver of right to any personal judgment for a deficiency and will bar a deficiency against not only the borrower, but
any co-borrower or other person who is liable for the mortgage.
Parties
Illinois has rather elaborate requirements about who must and who may be party to the lawsuit. A person who must be party to the
lawsuit is a necessary part, a persona who may be party is permissible party., The borrower and any other person obligated on the
note are necessary parties. Permissible parties include the owner of the loan note and any trustee. A few others such as tenants or
other persona in possession, guarantors, the State of Illinois, the U.S. government, a mechanic's lien claimant, an assignee, and
any other mortgagee or person with any claim to title may be joined. Any person joined retains any lien or claim. A non-record
claimant must come forward or lose out. Other complicated rules govern interventions, or entry of outside parties to the lawsuit.
Plaintiff's Complaint (Lender's Lawsuit)
The lender must begin the lawsuit by filing a plaintiff's complaint (also sometimes called a petition) and having it served on the
borrower. The complaint must include the following:
The nature of the instrument on which foreclosure is sought, whether it is a mortgage, a trust deed or another instrument.
The date of the mortgage, the lender's and borrower's names, the date and place of recording and the book and page number or
document number.
The ownership interest subject to the mortgage, such as fee simple, etc.
The amount of the original indebtedness, including subsequent advances.
A legal description of the property.
A description of the default, including the balance due, the date of the default and any further information on the default.
The name of the present owner
The names of the persons who are joined as defendants and whose interests are sought to be terminated.
The names of any persons who are to be personally liable for a deficiency.
Any facts that justify a shorter redemption period than seven months from the service (or publication) of the summons or three
months from the entry of judgment of foreclosure. (The statute suggests a shorter period would be justified if the real estate had a
value of less than 90 percent of the amount owed on the loan.)
A statement that the right of redemption has been waived, if it has been
Facts to support attorney's fees
Facts to support the appointment of a receiver, if desired by the lender.
A statement that the right of redemption has been waived, if it has been
The lender should conclude by asking for a judgment of foreclosure and sale, an order shortening the redemption period (if
requested), a personal judgment of a deficiency (if requested), a personal judgment for a deficiency (if requested) and an order
granting possession. If these allegations are made, as described above and supporting documents such as copies of the note and
deed of trust are attached, then the lender's complaint will be deemed to include the allegation necessary for a foreclosure.
Special Matters
Special matters can be included in judgment, if requested in addition to the allegation previously described. These would include a
request for a sale by sealed bid, a manner of sale other than a public auction, any fees to a broker or auctioneer, any signs to be
placed on the property, the newspaper or newspapers in which the notice of sale shall be published, the formats of the ads, the
requirements that title insurance be provided at the foreclosure sale and such other matters as the court approves to ensure the
most favorable commercial price for the type of real estate involved.
Regular Sale
If requested and agreed to by the parties, the property can be sold to the first person who offers in writing to buy the real estate for
such commercially reasonable terms as the parties may agree to, and the court shall then offer the sale in such a matter , subject to
its subsequent confirmation after it is closed. The advantage of this procedure is that a broker could be employed to find a buyer at
a decent price, which would be better than what the property would get at a sheriff's auction. The court must confirm the sale.
Notice of Sale
If the property is to be sold by sheriff's auction, then a notice of sale must be published and include the following:
The name, address and telephone number of a person who can be contacted regarding the purchase of the real estate.
The real estate must be described in terms of its common address (other than a legal description), its legal description, and its
improvements.
The times the property can be inspected prior to the foreclosure sale.
The date, time and place of the foreclosure sale including the terms of the sale.
The case title, case number and court in which the foreclosure lawsuit is filed.
Any other information required by the court.
The notice must be published in the usual newspaper for legal notices in that county once a week for three consecutive calendar
weeks, the first such notice must be 45 days prior to the sale and the last notice not less than seven days prior to the sale.
If the sale is to be adjourned more than 60 days, then notice must be republished, if less than 60 days, the person conducting the
sale can announce the date, time and place for the adjourned sale.
Sale Procedures
After the sale, the borrower gets a receipt that the property has been sold. Once the sale price is paid, certificate of sale shall be
issued to the buyer. A duplicate of the certificate must be recorded. Upon confirmation of the sale by the court, a deed may be
given to the buyer at the foreclosure sale. The confirmation hearing can also provide for a deficiency.
Redemption
The right to redemption may be waived by the borrower in the mortgage instrument, or after the commencement of foreclosure by
written consent filed with the clerk of the court, but only if the lender thereupon waives the right to a deficiency. However, waivers
signed prior to July 1, 1987, may still be valid. Otherwise, the borrower has the right to redeem the property within seven months
from the date the lawsuit to foreclose was filed, or three months after the date the judgment was entered by the court. Other
creditors have six months to redeem. The redemption period may be extended by the court. If a bankruptcy court stays (delays) the
redemption, then under Illinois law, the redemption runs to 30 days after the stay expires, or the normal period minus the period of
the stay whichever is longer. In any case, whether bankruptcy is involved or not, a notice of the intent to redeem must be filed with
the court 5 days before the redemption rights are exercised. The amount to redeem the property shall be that specified by the court
in its judgment ordering foreclosure. The redemption amount shall be paid to the court clerk. If there is no objection, the clerk will
give a receipt for the redemption amount, and the lender must then furnish the borrower with a release of the mortgage or
satisfaction of the judgment. If there is an objection, the court will promptly hold hearing and rule on the objection. A special right to
redeem exists if the lender attempts to sell the property at foreclosure for less than the court-specified amount. The borrower can
then redeem at the price for which the lender tried to sell the property.
Reinstatement
The borrower has the right to reinstate the loan within the first 90 days after being served with the lawsuit.
Possession
One of the most frightening features of the Illinois foreclosure law is that the lender can obtain physical possession of the premises
during the foreclosure lawsuit and prior to entry of a final judgment. In fact, at an early stage in the lawsuit, upon request of the
lender and for good cause show such as damaging the property or abandonment, the court can put the lender in possession of the
property and evict the borrower. The court must be satisfied there is a reasonable probability that the lender will prevail upon a final
hearing of the case. However, an existing tenant cannot be evicted, but the lender can collect the rents. A receiver may be
appointed to take charge of the property and the rents. Foreclosure buyers can obtain possession within 30 days. Otherwise, a
lender can obtain possession from the borrower 30 days after the confirmation of sale. |
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House Payment Rescue 5458 Longley Lane Suite A,
Reno, NV 89511
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Office Phone: 775-824-9002 Cell Phone: Fax: 775-824-9015 |
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Copyright ©
2007 House Payment Rescue |
All rate, payment, and area information are estimates and approximations
only. |
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