If you live in Illinois and fall behind on your mortgage loan, your lender can attempt to repossess your home through foreclosure. Although repossession is a frightening proposition, the lender must follow a specific procedure to let you know your loan is in default.
Know your rights to help avoid foreclosure
Your lender cannot suddenly show up on your doorstep and tell you you must vacate the premises within a specified number of days. Such scenarios are grounds for a strong foreclosure defense, as lenders may sometimes use illegal tactics to repossess homes. Understanding your rights can help you navigate the foreclosure process and in some cases, may even help you avoid losing your home.
In a foreclosure, the loan servicer, which may or may not be the company that issued the mortgage, must attempt to contact you within 36 days after a missed payment to talk about loss mitigation. This step can help you keep your home. Within 45 days of a missed payment, your servicer must notify you about loss mitigation options and refer you to agencies that can help. In most cases, your lender cannot start the foreclosure process until you are at least 120 days behind on payments.
Avoiding foreclosure may be viable
Many homeowners think that once they default on a loan, foreclosure is inevitable. The truth is you shouldn’t listen to harassing phone calls and threatening debt collectors. Any institution seeking foreclosure must follow the process outlined in your mortgage documents as well as Illinois state law rules on debts.
In many cases, you may be able to work out an agreement with your lender so you can catch up on payments. Solutions like loan modification, refinancing or a detailed repayment plan can help you out of debt and restore your good standing with the lender.