Real Estate Attorney Elgin IL – ASM Law
Welcome to ASM Law! We serve homeowners in the Elgin community and through Kane County. Our practice areas include foreclosure, bankruptcy and short sales. If you are struggling with debts and are at risk of losing your home, contact our firm today. Our lawyers can recommend the best way for you to protect your assets and regain your financial footing.
Fighting Foreclosure and Alternatives to Foreclosure
The possibility of foreclosure and leaving one’s home is, naturally, not a pleasant thing to face. But foreclosure in some cases is preventable. Our firm helps people in situations just like yours to find alternatives and remain in their home.
First, let’s take a look at some fundamentals of mortgages and the foreclosure process:
Missing a Mortgage Payment – What Happens When You Fall Behind
In the event a borrower misses a payment, there is usually a grace period of fifteen days to catch up. After that, the loan servicer assesses a late fee, which is typically five percent of the overdue amount. Read your promissory note to see the details on your grace period and late fee amounts. Or, you can usually locate this information on your mortgage statements.
When borrowers fall behind on their mortgage payments, the loan servicer often sends a reminder letter to request payments. Additionally, they may make collection phone calls. It’s beneficial to reply to the letters and calls rather than ignore them. They present an opportunity to learn your options for loss mitigation. During this period, it’s possible to reach an agreement such as loan modification, payment plans or a forbearance agreement. All of these are alternatives to foreclosure that can mean you’ll stay in your home.
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The Review Period for Loss Mitigation
According to federal law, the loan servicer typically must wait until the borrower is 120 days late on payments. After that, they can file in court to initiate the foreclosure process. This waiting period grants the borrower valuable time to look at loss mitigation options. In the state of Illinois, the foreclosure process is judicial. This means the lender must file the suit in a state court.
The court serves the complaint to the borrower. In addition, this includes a summons that provides 30 days for the borrower to reply. In the event the borrower doesn’t respond in time, the lender can obtain a default judgment from the state court. If the borrower does file a response, on the other hand, the lender cannot obtain a default judgment. Rather, the lender may either file for a motion to obtain summary judgment or proceed to trial:
Reinstatement Before a Sale
Reinstatement occurs when the borrower repays the overdue balance along with costs and extra fees. Illinois state law allows for the borrower to reinstate the home loan up to 90 days after receiving a summons. However, the majority of loan servicers permit the borrower to do this at any point before the sale.
There is also a “redemption period.” This is the time during which the borrower facing foreclosure can pay down the full debt. The payment must include the principal along with additional fees and interest. In Illinois, the sale cannot occur until after the conclusion of the redemption period.
The redemption period for properties expires either seven months after serving the complaint or three months after the judgment. Although, in the event the borrower abandons the property, the redemption period reduces to 30 days after the judgement date.
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Deficiency Judgments in the State of Illinois
In foreclosure proceedings, the borrower’s full debt on occasion exceeds the foreclosure selling price. The difference is known as a “deficiency.” The lender might pursue a deficiency judgment against the borrower to recover this deficiency. Typically, after a lender obtains a deficiency judgment, they can collect from the borrower.
In the state of Illinois, lenders can win a deficiency judgment as a part of a foreclosure proceeding. However, only when the borrower receives personal notice.
Late Fees When Behind on Mortgage
Most home loans enable the lender to charge fees for late payments, property inspections and foreclosure costs. The loan servicer – the company handling the management of your home loan for the lender – charges the late fees to the borrower’s account.
When behind on a mortgage payment, you’ll probably see extra charges at the end of your grace period. Many home loan agreements feature a grace period of ten to fifteen days. After that, the loan servicer applies the late fees. They can only asses the fees, though, in specific amounts according to the mortgage documents. You can typically find the late fee information in the promissory note.
The late fee amount is often four or five percent of the past due payment. However, state law sometimes limits the chargeable late fee amount. If the limit is less than what the loan documents state, that is the amount that applies.
Unfortunately, it doesn’t take long until late mortgage payments fees start to add up. Before long, it adds significantly to what you owe your lender.
Many mortgages permit the lender to take certain steps to protect their rights with respect to the property. For instance, property inspections are ways to help confirm that the property is receiving appropriate care.
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Inspections typically occur automatically after a loan enters default. The cost of the inspections are then part of the overall debt. The amount for each of the inspections is usually quite minimal, but can add up if they are done monthly.
Some courts will find that continual inspections are unnecessary when the loan servicer is in regular contact with the homeowner.
Broker’s price opinions are simply property valuations that real estate brokers conduct after a borrower defaults. Some of the factors that a valuation takes into account are:
-Sources from public data.
-Drive-by exterior inspections.
-Comparable recent sales.
A broker’s price option serves as an alternative to a complete appraisal. Like an inspections, they assess the current condition and value of a property.
Property Preservation Expenses
A loan servicer also may charge the costs of preserving a property’s value to the borrower. A property preservation service usually performs this regular maintenance. Loan servicers have a wide range of discretion when it comes to charging for preservation services. This can include:
-Taking photographs to document the property’s condition.
-Replace locks to secure a vacant property.
-Snow removal in winter and lawn care in the warmer months.
-Repair damages to the property.
-Winterize a vacant property. Remove trash and debris.
In the event a loan servicer charges excessive or incorrect fees to your account, you may challenge them. This can be done prior to or even during a foreclosure proceeding. If you’re going to face a foreclosure and you believe the servicer is charging incorrect fees call ASM Law. Our law firm offers considerable experience in all aspects of the foreclosure process.
Call for a private, free, no-obligation consultation with an experienced Real Estate Attorney Elgin IL. There are alternatives to foreclosure that can allow you to remain in your home.