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How foreclosure works

On Behalf of | May 4, 2022 | Foreclosure Defense

Foreclosure is a scary word for homeowners in Illinois that are still paying their mortgages off. If you miss enough mortgage payments, your lender could potentially initiate a foreclosure action and take your home. However, foreclosure is typically the last resort after other avenues to collect payment are exhausted.

Typically, your lender will try to work with you to get your mortgage payments up to date before initiating a foreclosure. If it doesn’t do this, they might be breaking the law.

Foreclosure process

Depending on the details in your mortgage contract, your lender will usually wait until you are four months behind, or at least 120 days, before initiating a foreclosure proceeding.

Your lender must submit a Notice of Default with the County Recorder’s Office, at which time you will enter pre-foreclosure. During this grace period, you will be given an opportunity to get up to date on your payments or sell your home. If you don’t do either of those things, your lender will set a foreclosure auction date, and you may have to look into strategies for foreclosure defense.

Foreclosure rules

The Consumer Financial Protection Bureau enforces rules to protect borrowers from losing their homes in foreclosure. One of those rules is that your lender must have provided you with an alternative payment option after you missed two consecutive payments. Your lender must also have used the foreclosure action as a last resort after exploring all other options.

Defense against foreclosure

If you were blindsided by a foreclosure notice after receiving no communication from your lender, chances are your lender violated CFPB rules. Even if your lender acted legally, you may still have options to contest a foreclosure. One option is to file for bankruptcy and another option is to file a motion to halt the foreclosure proceedings.