Foreclosure Defenses Part II – The Process
One of the first things I try to do when beginning a foreclosure defense is to determine the expectations of my client. Some just want to buy time so they can consider their options. Others are interested in pursuing a short sale, or trying to keep their home at any possible cost. Right now, if a homeowner did absolutely nothing to defend a foreclosure, they could stay in their home, rent free for nine months to a year. If you consider that most mortgage payments average $1,200 to $2,500 per month, that could be a pretty solid amount saved over the course of the foreclosure. The process has a number of steps that amount to about 10 months from the first missed payment until the time a homeowner must give up their home. That’s more time than most of my clients think they have if they’ve fall behind on payments. From the first missed payment to the ability to evict is minimally 10 months and can be more.
Well, you have a lot more options than you might think. I’ve found that in the flurry of lending that went on in 2004 to 2007, there were some major errors made on the part of the lenders. Since these lending errors might release the borrower from his obligation to pay – or may render the property free of a mortgage, checking to see if there is a defense to a mortgage, rather than just assuming that nothing can be done, is important. But beyond defending a foreclosure, the mere fact that the case is filed, opens up a number of different solutions for the homeowner.
The standard way that a foreclosure in Cook County works is as follows:
1. After 30 days of default the lender is required to send a notice to a homeowner who resides in the property and has never filed a bankruptcy proceeding during the life of the loan advising them of their right to seek HUD counseling. If the HUD counselor advises the lender that they are working with the homeowner, there is an additional 30 days to see if a solution can be reach. (See 735 ILCS 5/15-1502.5). This time can run concurrently to the 3 months that most lenders wait before filing any foreclosure action.
2. At the end of thirty days, the foreclosure suit will generally be filed.
3. The sheriff has thirty days to serve the homeowner. Once the homeowner is served the homeowner’s “Appearance” (the document filed with the Clerk of the Court to initiate the homeowner’s involvement in the case) needs to be filed within 30 days. Of course, if the homeowner isn’t served by the sheriff in the first 30 day period, the time frames just get expanded.
4. If the Appearance is not filed, the lender can “default” the homeowner and seek the entry of a Judgment. At this point it is approximately 6 months since the first mortgage payment was missed. Of course, if the homeowner files an Appearance, that mere act can delay things an additional 30 to 60 days.
5. If the Judgment is entered, there is approximately a ninety day time period to “redeem” the property – that is, pay off the loan – and the Sheriff’s Sale or Foreclosure Sale can be conducted any time after that. (An amendment to the Mortgage Foreclosure statute will extend that time to 120 days once signed by the Governor). After the Sheriff’s Sale is conducted, the Court must approve the Sale and if the homeowner has not already moved, the Lender may seek an Order of Possession and have the homeowner evicted.
© Copyright Erica Crohn Minchella, 2009
Well, you have a lot more options than you might think. I’ve found that in the flurry of lending that went on in 2004 to 2007, there were some major errors made on the part of the lenders. Since these lending errors might release the borrower from his obligation to pay – or may render the property free of a mortgage, checking to see if there is a defense to a mortgage, rather than just assuming that nothing can be done, is important. But beyond defending a foreclosure, the mere fact that the case is filed, opens up a number of different solutions for the homeowner.
The standard way that a foreclosure in Cook County works is as follows:
1. After 30 days of default the lender is required to send a notice to a homeowner who resides in the property and has never filed a bankruptcy proceeding during the life of the loan advising them of their right to seek HUD counseling. If the HUD counselor advises the lender that they are working with the homeowner, there is an additional 30 days to see if a solution can be reach. (See 735 ILCS 5/15-1502.5). This time can run concurrently to the 3 months that most lenders wait before filing any foreclosure action.
2. At the end of thirty days, the foreclosure suit will generally be filed.
3. The sheriff has thirty days to serve the homeowner. Once the homeowner is served the homeowner’s “Appearance” (the document filed with the Clerk of the Court to initiate the homeowner’s involvement in the case) needs to be filed within 30 days. Of course, if the homeowner isn’t served by the sheriff in the first 30 day period, the time frames just get expanded.
4. If the Appearance is not filed, the lender can “default” the homeowner and seek the entry of a Judgment. At this point it is approximately 6 months since the first mortgage payment was missed. Of course, if the homeowner files an Appearance, that mere act can delay things an additional 30 to 60 days.
5. If the Judgment is entered, there is approximately a ninety day time period to “redeem” the property – that is, pay off the loan – and the Sheriff’s Sale or Foreclosure Sale can be conducted any time after that. (An amendment to the Mortgage Foreclosure statute will extend that time to 120 days once signed by the Governor). After the Sheriff’s Sale is conducted, the Court must approve the Sale and if the homeowner has not already moved, the Lender may seek an Order of Possession and have the homeowner evicted.
© Copyright Erica Crohn Minchella, 2009
posted by Erica Minchella at
9:24 PM
0 Comments:
Post a Comment
<< Home