Illinois Foreclosure Laws

By law, Illinois foreclosure proceedings follow only the judicial process; wherein, the foreclosure sale is conducted similar to that of a public auction where the property is awarded to the highest bidder. After sale redemption is not permitted. On the other hand, deficiency judgment may be obtained. Typical on court proceedings may take up to one year to complete.

If the borrower defaults on payments, the lender can choose to foreclose the distressed property. Under the foreclosure laws in Illinois, a title search must be conducted prior to foreclosure. This is done to address senior liens and ensure that the title is free and clear of liens in preparation to the public auction.

Illinois Judicial Foreclosure

Illinois foreclosure laws calls for judicial proceedings which means that out-of-court foreclosure is not permitted. The lender is required to file a formal complaint in court against the borrower who found to be in defaults on payment. This complaint is known as lis pendens or a legal notice stating that there is an impending foreclosure on the distressed property. Once filed, the borrower has 30 days to respond to the petition. Failure to do so, gives an advantage to the lender in pursuing a foreclosure sale on the distressed property in not less than 3 months after the court’s ruling.

In order to reclaim ownership of the property, the borrower or homeowner should pay the total defaulted amount owned to the lender. Also, the borrower has up to 7 months to redeem the property before the public sale happens.

In some instances, the borrower may voluntarily surrenders the property back to the lender. This is called a deed in lieu of foreclosure. If the lender accepts it, deficiency judgment will no longer be applicable.

A consent foreclosure shortens the foreclosure process. If legal process has already taken place, the borrower may call for consent foreclosure to prevent deficiency judgment. However, the owner of the property may be liable for attorney fees and court charges.

As stated in the foreclosure laws in Illinois, after sale statutory right of redemption is not permitted. Redemption right is applicable at a given period either the time the foreclosure complaint is filed or after the court ruling has entered.

Deficiency judgment is allowed. This occurs when the property in foreclosure is sold for less than the amount of mortgage loan; hence, the borrower should pay for the difference between amount of the property sold and the amount of the original loan. Consent foreclosure and deed in lieu of foreclosure do not allow deficiency judgment.

Illinois Notice of Sale

A Notice of Sale should be published once a week for 3 weeks in a local newspaper. First Notice should be published not more than 45 days before the public auction. Final Notice should be published not less than 7 days before the foreclosure sale. Contents on the Notice include the auction’s date, location, and terms/conditions, name and number of the contact person, information on the lis pendens, and the name and address of the court where the foreclosure is filed.