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 Western Springs, 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 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 numerous 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 debtor for the balance, if the sale nets less than the amount due. You should consult an attorney in Western Springs, Illinois to learn the details of the law here. You should also know that this rarely applies to loans that have been refinanced.
How Can I Avoid Foreclosure in Illinois?
First and foremost, you should not dismiss the possibility of foreclosure. Failing to respond to collection calls from your lender will not make the problem go away. As unpleasant as this may seem, you should stay in contact with your creditor, and be forthright with them. It is essential to remember that the bank does not really want your Western Springs house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
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. 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 Western Springs, Illinois Attorney Help?
If you are facing foreclosure, a good Western Springs, Illinois real estate lawyer can help. While keeping your home might not always be possible, an attorney can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.