Foreclosure is the process 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 Monmouth, Illinois has repeatedly failed to make their payments. Foreclosure normally involves a forced sale of the house at auction. Banks normally 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 conducted 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 can 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 Monmouth, Illinois lawyer to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans which have been refinanced.
How Can I Avoid Foreclosure in Illinois?
Most importantly, you must not ignore 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. One should remember that banks typically don't want to take your house in Monmouth. 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 straightforward with them about your financial situation, they are likely to make reasonable accommodations to prevent you from defaulting.
If you can't work things out with your lender, there are other options. You could try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still gets those proceeds, but the remainder of the loan will be forgiven. You might also try a "short refinance" which allows a piece of the debt to be forgiven, and the rest refinanced. This allows the bank to wash its hands of the matter, while taking a relatively small loss, and allows the homeowner to keep their home.
How Can A Monmouth, Illinois Attorney Help?
If you are facing foreclosure, a good Monmouth, Illinois real estate attorney can help. While keeping your home might not always be possible, a lawyer can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.