Foreclosure attorney explains: 7 steps to solve foreclosure in illinois

Foreclosure Attorney Explains – 7
Steps to Illinois Mortgage Foreclosure
Law
by JAbdilla | Jun 8, 2020 | Foreclosure, Litigation, Real Estate, Transactional | 0
comments
As of May 25, 2020, Illinois attorneys estimated that 605,000 Illinoisans will enter
into eviction or foreclosure this year. To be sure, those numbers do sound bleak.
But, the process is easily navigated if you have a great foreclosure attorney. We
have over 200 foreclosure cases of experience with approximately $20,000,000 in
total homes rescued since our !rm began. As foreclosure lawyers, we have
practiced in all 7 collar counties handling cases before every judge on the bench.
Since this is our community, we want to help. Therefore, I’ve written this series of
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articles explaining foreclosures, short sales, and court procedures in Chicago. The
advice is always free.
Step 1 – Missed a Payment? Have Your
Foreclosure Attorney work on a Loan
Modi!cation
I know that many of us are struggling to pay our bills this year with the economic
downturn. However, the good news is that most mortgages won’t be foreclosed
on the !rst missed payment. Typically, after your !rst missed payment, the Bank
targets your loan for pre-foreclosure and gets the paperwork together. If your
servicer recently changed, and you’re sending checks somewhere else, that might
be why. But, even though one missed payment won’t be a foreclosure, it does
mean you should call your foreclosure attorney and act to prevent a loss!
Although your !rst missed payment won’t trigger foreclosure, your second missed
payment starts the chain for certain. After you’ve missed two payments, the Bank
Table of Contents
I. Step 1 – Missed a Payment? Have Your Foreclosure Attorney work on a Loan
Modi!cation
I.I. 2020 Loan Modi!cation Guidelines
II. Step 2 – Grace Period Notice in Illinois Mortgage Foreclosure
II.I. Notice of Intent to Accelerate
III. Step 3 – Consider Your Exit Strategy with a Foreclosure Attorney
III.I. Deed-in-Lieu of Foreclosure under the Illinois Mortgage Foreclosure Law
III.II. Consent Foreclosure
III.III. Short Sale
III.IV. Courtroom Strategies with Foreclosure Attorneys
IV. Step 4 – The Foreclosure Summons
V. Step 5 – Court-Sponsored Mediation with a Foreclosure Attorney
V.I. Where to Go for Foreclosure Mediation
V.II. Foreclosure Mediation Outcomes
VI. Step 6 – Using your Foreclosure Attorney in Court
VI.I. Illinois Foreclosure Motions to Dismiss
VI.II. Defending a Foreclosure Summary Judgment
VII. Step 7 – Reinstatement, the Last Chance to stop an Illinois Foreclosure
VIII. Conclusion – Foreclosure Attorneys Provide Value!
VIII.I. Resources:

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will send you a 30-day ultimatum to catch up. As a foreclosure lawyer, at this
point, we advise our clients to speak to a HUD-approved housing counselor.
Usually, that helps them get another 30 days to get current.
Credit – StevePB on Pixabay
2020 Loan Modi!cation Guidelines
Sadly, the best programs we ever had, HAMP and HAFA, are no longer funded.
Now, we must use Freddie Mac Flex Modi!cations in 2020. These modi!cations
look just like the “Streamline” loan modi!cations and really aren’t for everybody.
However, there is a chance they can help you if you’re only temporarily falling
behind. The eligibility guidelines for this program are strict, and include:
The Homeowner being less than 90 days past-due.
Projected payment amounts of no more than 40% of the Homeowner’s income.
The loan is not “under-water.” The Loan to Value Ratio doesn’t exceed 100%.
Further, if the homeowner does not have 20% equity in the property, she cannot
bargain the interest rates at all.
If you have missed a payment and do not qualify for one of these loan
modi!cations, never fear. I can walk you through the harder processes of pre-
foreclosure. After all, a competent foreclosure attorney should be able to answer
these questions!
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Step 2 – Grace Period Notice in Illinois
Mortgage Foreclosure
In Illinois, you’ll !rst learn that you should contact a foreclosure attorney when
you receive the Grace Period Notice (GPN). The GPN is a statement that your
account is past due. Therefore, it is the !rst real step in the foreclosure process.
Previously, Banks couldn’t even begin foreclosure proceedings without sending
the GPN. Sadly, that law at 735 ILCS 5/15-1502.5 is now repealed. Still, a common
practice is to send a grace period notice just like what was in the law before. You
can !nd that quoted it for you here:
Your loan is more than 30 days past due. You may be experiencing !nancial
di"culty. It may be in your best interest to seek approved housing counseling.
You have a grace period of 30 days from the date of this notice to obtain
approved housing counseling. During the grace period, the law prohibits us
from taking any legal action against you. You may be entitled to an additional
30 day grace period if you obtain housing counseling from an approved
housing counseling agency. A list of approved counseling agencies may be
obtained from the Illinois Department of Financial and Professional
Regulation.
Former law, 735 Illinois Compiled Statutes 5/15-1502.5
If you receive a GPN, you should absolutely call a Foreclosure Attorney to explore
your options. Speci!cally, the Bank only sends you the GPN once you are behind,
and when they’re preparing the steps to foreclose. I’ve heard that in 2020, the
Plainti#’s Bar for Illinois is estimating 605,000 foreclosures and evictions! So,
they’re ready to go and you should be too.
Notice of Intent to Accelerate
Following the Grace Period Notice, you may receive a document called a “Notice of
Intent to Accelerate” (NIA). Once you receive the NIA, the Bank has placed you into
a foreclosure pool. Speci!cally, the bank is deeming the entirety of the loan as
presently due. That means they want you to pay o# the whole home, within 30
days, or face foreclosure. But, there’s an alternative option in Illinois Foreclosure
called Reinstatement that we’ll discuss in Step 7.
So, whether you reached this article looking up your NIA or GPN, know that a
foreclosure lawyer can help you. If you bring your documentation to us at this
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step, things usually turn out favorably for the homeowner. Therefore, I encourage
you to call an Illinois foreclosure attorney if you get any notices from your bank.
We’re experts and can help decipher the complex legalese and make sense of the
!nances for you. At the very least, the consultation is free!
Credit – AlexanderStein on Pixabay
Step 3 – Consider Your Exit Strategy with a
Foreclosure Attorney
Once you’ve received the Grace Period Notice you should be aware the Bank is
reporting you as behind. Still, don’t panic! You have approximately 7 months to
think about your exit strategy before the foreclosure can complete. There are
many great exit strategies from foreclosure. They include deed-in-lieu, consent
foreclosure, short sales, reinstatements, loan modi!cations, and, !nally, accepting
the foreclosure and moving on. Good Illinois foreclosure lawyers will help keep
you in control of all exit strategies. So, we’re going to make sure you understand
all your options.
Deed-in-Lieu of Foreclosure under the Illinois
Mortgage Foreclosure Law
The simplest option in Illinois is the Deed in Lieu of Foreclosure. When the
homeowner and the bank decide to accept a deed in lieu, the homeowner just
quit-claim deeds the property to the bank. The bank takes the home, and in
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exchange waives the entirety of foreclosure proceedings. Further, the Bank cannot
try to collect any money from the homeowner in a de!ciency judgment.
E#ectively, the foreclosure is over and the homeowner agrees to move on. As
Illinois foreclosure attorneys, we often examine these deals, but they’re rarely our
!rst option to recommend to our clients.
Consent Foreclosure
Consent Foreclosures are very similar to deed-in-lieu of foreclosure proceedings
but di#er only in how the Bank receives the home. In Deed-in-Lieu transactions,
the homeowner titles the property to the bank, but in a consent foreclosure, the
homeowner allows the sheri# to sell the home. So, it’s like a short-cut to the end
of a foreclosure case, where the foreclosed home is sold by public auction. Similar
to a deed-in-lieu, the bank can’t sue the homeowner for the extra money if the
home is underwater. A good Illinois Foreclosure Lawyer could help you negotiate a
consent foreclosure in some circumstances. However, we typically only
recommend these settlements to help prevent the homeowner (our client) from
!ling bankruptcy.
Short Sale
On the other hand, we see Short Sales as the single best opportunity to rescue
homes from foreclosure. Short sales are quite easy to pull o# if you have any
equity in your home whatsoever. Your foreclosure lawyer will be invaluable in
helping you navigate this process. Remember, you should disclose the foreclosure
when listing! Even so, there are only three common requirements that your
foreclosure lawyer can help with! First, you must provide a “letter of hardship” to
your lender. This letter explains why you can’t pay the mortgage anymore and
need to get out from under it. Second, you will need to list the property with a real
estate agent. You will need the bank’s approval on a listing price and commissions.
Third, the bank will need to approve the terms of the sale. This includes the !nal
sales price, commissions, and cash returned to you at closing.
Afterward, once you have closed, your foreclosure attorney will appear in Court to
make sure the case is dismissed. This is normally the best option for our clients.
We !nd our clients typically walk away from the foreclosure with something in
their pockets from a Short Sale. Further, the usual credit score hit is only around
100 points. In fact, many buyers even look for foreclosed homes to turn a quick
pro!t and help others. A competent Illinois Foreclosure Attorney will almost
always recommend short sales. We !nd they are the single best way to
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rehabilitate your credit during foreclosures.
Courtroom Strategies with Foreclosure Attorneys
Finally, if we can’t solve the foreclosure before Court, we will have to solve it in
Court. Many of these options still exist during a courtroom foreclosure case in
Illinois. While Illinois Foreclosure Lawyers would prefer an out-of-court solution,
sometimes going to court is inevitable. When we must attend Court of behalf of
our clients, we look to challenge procedure, payment history and the Bank’s title
to the Note. Often, this is a last ditch attempt to gain leverage for a settlement.
However, we are aware many attorneys do o#er a “show me the note” type of
foreclosure defense. But, we try to avoid this as it often just racks up meaningless
bills for our clients. When you’re in an active foreclosure case, you pay for both
your attorney and the Bank’s attorney. Therefore, it is critical to keep the case
moving quickly and the costs low. I have personally seen a client charged $36,000
in legal fees during a foreclosure! Our particular practice involves only doing what
is cost e#ective for our clients. More on this in Step 6.
Step 4 – The Foreclosure Summons
When the Bank !les a Mortgage Foreclosure Complaint, they must send you a
summons and serve you a copy of that Complaint. This summons informs the
homeowner that they must !le an answer to the claims in the lawsuit. Summons
are issued to everyone who borrowed on the loan and everyone in the home.
Also, in Illinois, each other lienholder on the property, as well as a catch-all party,
called “Unknown Owners and Non-Record claimants” are named. Your foreclosure
lawyer can read this document and tell you the amount of money the bank is
after.
In Illinois, your Summons gives you have 30 days from the time of receipt to
appear, answer or otherwise plead. Moreover, you will likely get a notice to appear
for court-sponsored mediation at that time. If you live in Kane County, Cook
County, Will County, or Lake County, you should absolutely use the mediation
programs. In DuPage County, the programs are run through the Dupage Housing
Authority, and you can still reach out to them.
When you receive your summons, it is absolutely necessary to contact an Illinois
foreclosure attorney. The Summons is the beginning of serious legal action
against you! It could cost you hundreds of points of credit score and thousands of
dollars. Only a lawyer is quali!ed to represent you in Court on all these issues.
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There is no housing counselor or forensic foreclosure auditor that can appear in
Court in Illinois without a law license. So, if you have received this document, you
absolutely need a lawyer!
Credit – AJEL on Pixabay
Step 5 – Court-Sponsored Mediation with a
Foreclosure Attorney
Mediation is a program where the homeowner and the Bank work together to
help resolve the foreclosure outside of Court. We spoke about many of the ways
that we can prevent a total loss as foreclosure lawyers, and mediation is the best
avenue to !nd these settlements. Whether you’re looking for a loan modi!cation,
short sale, deed-in-lieu, or consent foreclosure, mediation programs help you
collaborate for a quick settlement. Importantly, mediation is con!dential and the
mediator cannot force the parties to come to an agreed result.
Where to Go for Foreclosure Mediation
To start, the mediation session includes a preliminary examination of your
!nances and your ability to possibly repay the loan. As we stated in Step 1, it really
helps to call a HUD Approved Housing Counselor to see what documents help
demonstrate your !nances. Moreover, your foreclosure attorney will help you
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understand these documents and calculate the numbers for your ability to repay.
You should bring your tax returns, pay stubs, and your monthly bills. Your
foreclosure lawyer will need to show how much monthly money you have to pay
your home loan (or how you can no longer pay it).
Cook County gives access to housing counselors and foreclosure legal
assistance at each judge’s respective help desk and from time to time on the
7th $oor of the Daley Center. Call (877) 895-2244 for details. Kane County has
a mandatory opt-out mediation program. You will be given a mediation date,
and as long as you appear, you can participate in the court-sponsored
mediation. Will County is similar to Kane County’s program, but your date to
appear is listed on the Complaint itself. Lake County‘s program is an opt-in
program where homeowners can use the Court Sponsored mediation
program so long as they attend an education session o#ered by the A#ordable
Housing Corporation within 35 days of receipt of the summons. They can be
reached at (847) 796-8050.
The Step-by-Step Guide to Foreclosure – Justin Abdilla (own work) on avvo.com
Foreclosure Mediation Outcomes
If mediation succeeds, you will have reached an agreement with the bank on
whether you will receive a loan modi!cation and retain your home with either a
new HAMP modi!cation or a trial payment plan. You might also come to terms
regarding short sale !gures, or a consent foreclosure and could agree to give up
your home to either a new buyer or back to the Bank. A good Illinois Foreclosure
lawyer can help you put together a plan to come to a settlement at this stage.
If mediation does not resolve the issues, the court will give you a status date for
your foreclosure. This is the return date and might be the date printed on your
original summons. Your foreclosure attorney should make your !rst response to
the court will typically be 30 days after the mediation program sends you a letter
saying mediation terminated. If you did not participate in mediation, you owe the
Court a response 30 days after you receive the summons.
Step 6 – Using your Foreclosure Attorney in
Court
Please note, your obligation to the Court will be to !le an Appearance (which is the
form that has your address on it) and another pleading. To begin, you can !le an
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answer, which goes line by line through the Complaint and admits or denies the
allegations, including implied allegations. But, you could also !le a motion to
dismiss, which states that the Complaint is defective for some reason. However,
you should absolutely utilize the services of a foreclosure attorney to !le these
documents. Simply put, you can lose a lot of your rights by doing these documents
incorrectly.
Illinois Foreclosure Motions to Dismiss
All homeowners stepping into a courtroom should !rst consult an attorney about
any defects in the service of the Complaint or any defects apparent from the face
of the Complaint itself. These motions to dismiss are “use it or lose it.” You need to
raise them on the !rst opportunity or you waive them. These kinds of motions to
dismiss, the 2-615 motions, are only procedural.
However, there are certainly other kinds of motions to dismiss that state claims
like “This is the wrong bank” or “I got rid of this loan in bankruptcy.” If you have
one of those kinds of motions to dismiss, your foreclosure attorney will spot it and
!le it for you. These motions, the 2-619 motions, are very factual in nature. You
must prove them with your evidence.
No matter what, we have to get going on your response within 30 days of the
mediation date. I don’t want any of my foreclosure clients to not get the help they
deserve. As knowledgeable and experienced Illinois Foreclosure lawyers we will
help !ght foreclosure either in court or through a collaborative settlement. You
can contact us for any speci!c questions on your case.
Defending a Foreclosure Summary Judgment
While a later article will contain a guide to what your foreclosure attorney does for
you in Court, I want to make it clear that we really can save you a lot of money. I
have many responsibilities in defending your case. To begin, I pull your payment
history and examine every month’s fees and payments to see if the Bank charged
you interest correctly. Then, I can force the Bank to show me your original signed
documents to prove that they own your loan. Further, I can !nd out who to call
and bargain with to get you out of this loan. Finally, I can also extend your sales
dates if you are having hardship. Foreclosure attorneys are extremely valuable to
your family’s exit strategy and can make the !nancial hardship much less severe.
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Credit – AnnCA from Pixabay
Step 7 – Reinstatement, the Last Chance to
stop an Illinois Foreclosure
If all else fails, your foreclosure lawyer will recommend one !nal step that you can
take to resolve the foreclosure without a judge. In Illinois, you have an absolute
right to reinstate your loan within 90 days of the foreclosure complaint. While this
can often cost upwards of $10,000 it is the only guaranteed way to get out of the
courtroom. Keep in mind you will have to pay all your back-owed mortgage
principal, the interest, the escrow fees and the attorney fees. While it certainly isn’t
cheap, certainty is often worth it. If you ever do wish to reinstate the loan, your
Illinois foreclosure attorney will know exactly which number to call to get an up-to-
date !gure.
Conclusion – Foreclosure Attorneys Provide
Value!
I hope this article has demonstrated the dozens of ways that a foreclosure
attorney will give you a soft landing from your !nancial problems. While we can’t
always save the home, we can often help it not hurt so much. Whether we’re
getting a short sale to minimize the credit score hit, or a consent foreclosure to get
you more time, we’re always working for our clients. The service is very a#ordable
and often generates a positive return on investment for our homeowner clients. If
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you are facing foreclosure in Illinois, give me a call today and I’ll tell you everything
I can do for you.
Resources:
Hud Approved Counselors, Illinois – Retrieved June 8, 2020
AOIC Foreclosure Approved Forms – Retrieved June 8, 2020
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