Understanding the Foreclosure Process in IL

Gaining a thorough comprehension of the foreclosure process within IL is crucial for effectively navigating the challenging journey of home foreclosure on your own.

Prior to delving into the topic at hand…

What is foreclosure anyway?

Foreclosure refers to the legal procedure employed by lenders to reclaim property used as collateral for a loan when the borrower ceases to make regular payments.

Foreclosure is undoubtedly a challenging experience, but it’s essential to remember that it does not signify the end of everything. When you acquire a comprehensive understanding of how foreclosure operates in IL, you empower yourself with the knowledge to navigate the process effectively and strive for a favorable outcome.

The Basic Stages of A Foreclosure

Several pivotal stages play a significant role in any foreclosure process.

Foreclosure procedures vary across different states throughout the country.

States employ two primary methods to foreclose on a property: judicial sale and power of sale.

To receive personalized guidance on the specific foreclosure process in your local area of Belleville, we invite you to connect with us by calling (314) 467-8137 or reaching out via our contact page. Our team will be happy to assist you and provide a detailed walkthrough of the foreclosure process tailored to your location.

In both scenarios, foreclosure proceedings usually do not reach the court until 3-6 months have passed with missed payments. Typically, though not always, lenders will issue multiple notices to inform you of your overdue or delinquent payments.

Under Judicial Foreclosure:

The foreclosure process typically involves the following steps:

Your mortgage lender initiates legal proceedings by filing a lawsuit in the court system.
You will receive a letter from the court, known as a demand for payment, which requires you to settle the outstanding amount.
Assuming the validity of the loan, you generally have a 30-day period to bring the payment to the court in order to prevent foreclosure. In some cases, this timeframe can be extended.
If you fail to make the payment within the specified period, a judgment will be entered against you, allowing the lender to proceed with the sale of your property, often through an auction.
Once the property is sold, the sheriff will serve an eviction notice, compelling you to vacate the premises immediately.
It’s important to note that specific details and timelines may vary depending on your location and the applicable foreclosure laws.

Under Power of Sale (or Non Judicial Foreclosure):

The mortgage lender serves you with legal documents demanding payment, and while court involvement may not be mandatory, the foreclosure process could potentially be subject to judicial review.
Once the designated waiting period has expired, a deed of trust is created, and the control of your property is transferred to a trustee.
Subsequently, the trustee is authorized to conduct a public auction to sell your property on behalf of the lender, after providing the necessary notice as required by law.

During either type of foreclosure, it is crucial to notify anyone who has a stake or interest in the property. This includes contractors or banks that hold liens against the foreclosed property, as they have the right to seek compensation from the proceeds generated through the auction process.

What Happens After A Foreclosure Auction?

After a foreclosure is complete, the loan amount is paid off with the sale proceeds.

Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.

A deficiency judgement is where the bank gets a judgement against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.

Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.

Here’s a great resource that lists the state by state deficiency judgement laws, since every state is different.

Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Cardinal Creek Properties to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.

Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.

If you need to sell a property near Belleville, we can help you.

We buy houses in Belleville IL like yours from people who need to sell fast.