Foreclosure is the legal process 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 Creve Coeur, 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 easy 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 reasonable effort to get a decent price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In many states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the borrower for the balance, if the sale nets less than the amount due. You should consult a lawyer in Creve Coeur, Illinois to learn the details of the law here. You should also know that this rarely applies to loans which have been refinanced.
How Can I Avoid Foreclosure in Illinois?
First, and most importantly, you should not ignore the issue. Failing to respond to foreclosure calls from your lender will not make a problem go away. You should stay in touch, and be straightforward with, your creditor as much as possible. You should keep in mind that banks normally don't want to take your Creve Coeur 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 keep you from defaulting.
If no deal can be worked out, or the mortgage payments have become prohibitive, you might consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders typically treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency might be forgiven. You may also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.
How Can A Creve Coeur, Illinois Attorney Help?
If you are facing the possibility of foreclosure, a good Creve Coeur, Illinois real estate attorney can help. At the very least, they will be able to inform you of your legal options.