Foreclosure is the procedure through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in Lake Zurich, Illinois has consistently failed to make their payments. Foreclosure typically involves a forced sale of the house at auction. Banks typically want to rid themselves of ownership of the home as soon as possible, collect as much money as they can, and then move on.
In all states in the United States, including Illinois, foreclosure by judicial sale is an option. This allows the sale to be done under the supervision of a court, to ensure that the bank makes a good faith effort to get a fair price, and that the proceeds above and beyond the balance of the mortgage (if there are any) go back to the debtor. In some states, original mortgages are "non-recourse loans," meaning that the lender may only recover ownership of the house in the event of default. If the house is now worth less than the balance of the mortgage, the lender has to take the loss. You should speak with a Lake Zurich, Illinois attorney to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans that have been refinanced.
How Can I Avoid Foreclosure in Illinois?
First, and most importantly, you should not dismiss the issue. Failing to respond to foreclosure calls from your lender will not make an issue go away. You should stay in touch, and be forthright with, your creditor as much as possible. One should remember that banks usually don't want to take your house in Lake Zurich. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are forthright with them about your financial situation, they are likely to make reasonable accommodations to keep you from defaulting.
If no deal can be worked out, or the mortgage payments have become prohibitive, you may 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 usually 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 may be forgiven. There is also the option of a "short refinance," which forgives a substantial portion of your mortgage debt, and refinances the rest.
How Can A Lake Zurich, Illinois Attorney Help?
If you are facing the possibility of foreclosure, a good Lake Zurich, Illinois real estate lawyer can help. At the very least, they will be able to inform you of your legal options.