Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (normally a house) that secured the loan. This is done when the Chicago Heights, Illinois debtor has repeatedly failed to make their payments. When a house is foreclosed, it is normally sold at auction shortly thereafter. This is because banks normally want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an simple way to do this.
In all states in the U.S., including Illinois, foreclosure by judicial sale is allowed. Under this system, the sale is overseen by a court of law, to ensure that the bank makes a good effort to get a reasonable price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take possession of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the borrower for the remaining balance once it sells the house. You should consult an attorney in Chicago Heights, Illinois to find out if this is the case here. This normally does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Illinois?
Most importantly, you must not dismiss the problem. Doing so will not make it go away, and will probably make it worse. You should stay in close contact with your bank, and be straightforward with them. You should keep in mind that banks normally don't want to take your Chicago Heights home. They aren't in the real estate business, and expect to make money through interest on the loan, not by selling your house. If you are up-front with them early on, they will probably make a reasonable effort to accommodate your financial system if it will prevent you from defaulting.
If you believe that foreclosure is imminent, there are some other avenues. For example, you may be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can receive, give the proceeds to the lender, and walk away free of your mortgage debt, even if the sale netted less than the balance of the mortgage. You may also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A Chicago Heights, Illinois Attorney Help?
If you are faced with the possibility of foreclosure in Chicago Heights, Illinois, an lawyer may be able to help. At the very least, he or she can advise you of your legal options.