Illinois Rules on Foreclosures

When a house is foreclosed on, it becomes the property of the lending institution. The laws legislating foreclosures vary by state. In Illinois, foreclosure is a judicial process, meaning that it can only be carried out through court proceedings. When faced with a foreclosure, it is necessary to be aware of your rights and the rights of the lender.

Title Search

A lender must do a title search on a borrower's note and/or mortgage to ensure that there are no senior liens on it. If there is a senior lien (another lender that has primary rights to the note and/or mortgage), it must be settled, or the purchaser of the defaulted home will have to agree to take the property subject to the senior lien. All junior or secondary liens must be named as defendants in the foreclosure proceedings against the borrower to ensure that the title is clear of all liens and the lenders get some recompense.

Reinstatement Period

Under Illinois foreclosure laws, there is a 90-day reinstatement period when the loan agreement can be reestablished between the homeowner/borrower and the lenders. In some cases, the parties can work out an agreement that will avoid foreclosure on the property. Most times, there is a reason the homeowner is in default on the mortgage payments (unemployment, medical reasons, recent divorce, a death, etc.), and a reworking of the mortgage agreements can forestall foreclosure. Due to this 90-day redemption period, the court cannot enter a judgment of foreclosure until 90 days after the first issuance in court. However, this period can be shortened to 30 days if the property is abandoned.

Foreclosure Process

Although a foreclosure can take place in as little as 90 days, the proceedings usually last about 210 days. Once the applicable redemption period is over, a Notice of Sheriff's Sale is published in the local newspaper, once a week for three weeks. A Sheriff's Sale is held less than seven days after the final sale notice is published, and the property is auctioned off, with the lender opening the bidding with the amount owed. The person with the highest bid gets the property and a Certificate of Purchase.

References

• Foreclosure Law: Foreclosure Law in Illinois
• Realty Trac: Illinois Foreclosure Laws