The Illinois Foreclosure Process

Illinois Foreclosure Process
Average time in Illinois is 321 days
THE ILLINOIS FORECLOSURE PROCESS

Illinois is a judicial state requiring court actions to foreclose a mortgage. A typical foreclosure action requires anywhere between 210 to 270 days to completely take away the homeowner’s ownership of the property. An important point to remember is that the only way a bank becomes the actual owner of the property is when the entire foreclosure process takes place and a deed is issued to the bank. Until that happens, the borrower is still the legal owner of the property.
Below is a timeline of what typically happens from the time a borrower defaults on a note to when the bank acquires the property.
 

Pre-Foreclosure Process

 
• The borrower defaults on the promissory note. (The term “default” is defined in both the promissory note and the mortgage.)
• After default, either immediately or after a period of trying to work out the default, the lender is required by the terms of the mortgage and note to give a “Notice of Default” and acceleration letter to the borrower calling for the entire loan to become due.
• Before the foreclosure process begins, the lender orders a title search (called Minutes of Foreclosure) to see if any liens are ahead of the lender’s mortgage.

Court Process
• The lender files a Complaint to Foreclose Mortgage.
• The Complaint is served to the borrowers and any other defendants

• All junior lien holders must be named as defendants in the Complaint to ensure title is free and clear of all liens at the time of the foreclosure sale. Keep in mind that property taxes and certain municipal liens cannot be extinguished through foreclosure. So lenders will closely monitor tax liens during default because a tax lien can jump ahead of a valid mortgage lien and terminate it when the tax redemption expires.
• If a defendant can’t be located—Illinois allows a lender to serve through publication
• The plaintiff (lender) records a Lis Pendens (notice of foreclosure) with the county where the property is located.
• Upon being served, the defendant has 30 days to file an Answer with the court.
• If the defendant fails to file an Answer, the court will enter an Order of Default.
• If the borrower or other lien holders file an Answer contesting foreclosure, the parties can take the issue to trial.
• If the defendants do not contest, then a Judgment of Foreclosure and Sale is entered. The Judgment includes the following:

1. The amount due (including principal, interest, attorneys’ fees, costs of filing/service, title expenses, paid taxes)
2. The redemption period;
3. Identification of the property;
4. Service and default against the defendants; and
5. The statutory foreclosure sale process.

Redemption Period

• The borrower’s right to redeem the property ends:

1. 7 months after the date of service of the Complaint if the borrower is living in the home,
2. 6 months after the date of service of the Complaint if the borrower is not living in the home, or
3. 3 months after the Judgment is entered, whichever is later.

• To redeem the mortgage, the borrower must pay the entire amount as stated in the Judgment.
• If the property is abandoned, the court can shorten the redemption period to 30 days after the Judgment is entered (the plaintiff would sign an affidavit stating an investigation was made to support the conclusion that the property is abandoned).

Sheriff’s Sale

• The Sheriff’s Sale must occur after the redemption period.
• Notice of the Sheriff’s Sale is published in a local newspaper in the county where the property is located once a week for 3 weeks (Cook County requires publication in two separate papers).
• After the final notice of Sale is published, seven days must pass before the Sheriff’s Sale is held.
• The highest bidder receives a Certificate of Purchase.
• A Motion to Confirm Sale must be filed and the sale must be confirmed by the court.
• After the court confirms the Sale, the Sheriff’s Deed is issued.
• If the residence is occupied, there is an automatic 30-day stay of possession from the order confirming the sale.  After 30 days, the county sheriff can evict anyone still living in the house.