Stop Foreclosure Elgin Lawyer IL – ASM Law
Foreclosure Attorney Elgin IL – What Happens When You Default On Your Mortgage
Basically, the law considers homeowners who fail to follow the terms of their mortgage to be in default. There are various types of contract violations that constitute being in default and the consequences that follow.
Different Ways of Defaulting On a Illinois Mortgage Loan
The most frequent kind of default is getting behind on monthly home loan payments. However, failing to comply with other terms in a loan contract are also a form of default. For example, default typically occurs if:
-You do not pay your home’s property taxes. This assumes that you do not hold an escrow account.
-You don’t stay current on your homeowners’ insurance costs. This also assumes that you do not have an escrow account.
-If you permit your residential property to fall into disrepair or cause damage that diminishes the property’s value.
-You transfer the property’s deed to a new owner, but do not get permission from the lender.
Consequences of Defaulting On a Mortgage – Stop Foreclosure Elgin Lawyer IL
After you default on a home loan, the lender can demand immediately payment of the whole remaining balance. This is known as accelerating the debt. In some cases, though, you might receive notice of this before the loan accelerates. This provides you an opportunity to resolve the default.
Failure to pay the total amount of the loan means the lender can proceed with the foreclosure process. Nevertheless, there are certain circumstances when the loan servicer must wait for a certain length of time until doing so.
Talk To a Lawyer About Alternatives to Foreclosure
If you are facing a potential foreclosure after defaulting on your mortgage loan, call ASM Law. We can advise what your legal options are and whether you will be able to remain in your home.
A Look at Judicial and Non-Judicial Foreclosure Procedures
To foreclose a property, the lender must file suit. Then, the court determines the circumstances relating to the default through hearings and documentation that both parties file. In addition, the homeowner gets an opportunity to negotiate alternatives to foreclosure. If the court does decide that foreclosure should proceed, it enters a judgment that is against the homeowner. Subsequently, a foreclosure sale follows next.
A judicial foreclosure is typically quite lengthy, often lasting for a few months or even years.
In this form of foreclosure procedure, the court does usually not play as big a role.
In fact, a non-judicial procedure typically takes place outside of court overseen by a trustee. The homeowner has an amount of time to catch up on the mortgage or negotiate an alternative. The trustee also may need to send a notice about the foreclosure sale. The lender might:
-Send a notice of sale only, or a dual notice of sale and default.
-Illinois law may require the lender to publish notice in a news publication or somewhere on the physical property.
-In the event, the homeowner cannot resolve the default or prevent foreclosure, the trustee proceeds with the foreclosure sale.
In general, non-judicial foreclosure moves along faster and costs less than a judicial proceeding. The process lasts a few months or less in most cases.
Stop Foreclosure Lawyer Elgin IL – ASM Law – We Fight for Your Rights
In most transactions, a mortgage or bank issues a loan to a buyer so they can purchase a home. As part of the agreement, the buyer promises to make payments each month. Also, the agreement holds that the lender may sell the home through foreclosure if the buyer doesn’t make payments.
If you are looking at foreclosure on your home it’s important to not panic. A Stop Foreclosure Lawyer Elgin IL can help protect your rights, which stem from federal and state law. Please continue reading to learn more about your rights in a foreclosure.
Loss Mitigation Rights
According to federal law, the loan servicer has to contact via phone to review your loss mitigation options. They should do this no later than 36 days following a missed a payment. Also, the servicer must contact you again within 36 days after the next late payment.
Furthermore, the servicer must inform the homeowner in writing about mitigation options within 45 days after a delinquent payment. However, there are a few exceptions to these legal requirements. For example, if the homeowner files for bankruptcy. Talk to a Stop Foreclosure Lawyer Elgin IL for more information.
Additionally, the loan servicer cannot officially start a foreclosure until the mortgage payments are over 120 days overdue. This provides the homeowner with some time to apply for loss mitigation with the loan.
The Fundamentals of Loan Modification
A loan modification is an alteration that your loan servicer makes to the terms of your home mortgage. Generally, this happens as a result of fiscal hardship. The purpose is to lower your monthly house payment to something more affordable. Typically, it entails the lender calculating a new, lower payment based on changes they make to your original mortgage contract.
ASM Law – Foreclosure Lawyers Serving the Elgin IL Community
Why Lenders Permit Mortgage Modification
Modifying a home loan tends to cost less and take less time for lenders. In addition, it can mean less of a financial impact on homeowners too. A Stop Foreclosure Lawyer Elgin IL can advise on whether this is a possibility for you.
Alternatives to Foreclosure – Loan Modification
Without considering a loan modification, the options available to your loan servicer are not very appealing. For that reason, modifying the loan is certainly worth thinking about as an alternative to foreclosing. Options available to a loan servicer include examples like:
-Close on the property. A loan modification is in some ways less attractive to a bank than foreclosure.
In foreclosure, the bank takes possession of a home and proceeds to evict the borrower. Then, the bank sells the property.
-Proceed with a short sale. A short sale is when the home sells for less than what the borrower owes on the mortgage. It does still mean that the borrower loses the home.
-Try to collect the overdue payments through a collection agency, wage garnishment or a bank levy. For example, with wage garnishment the creditor must obtain a court order. The order allows part of your paycheck to go toward paying down your debt.
-Charge the loan. In place of a foreclosure, a loan servicer may choose to write off the loan as a loss. This is an option when the loan servicer determines that it will be difficult to collect the debt.
-An inability to recover the overdue payments. In the event you file for bankruptcy, it can serve to temporarily stop a foreclosure. Consequently, the bank might not be able to recover the funds.
Learn More About Alternatives to Foreclosure – Call ASM Law
These foreclosure options will usually result in the loss of the home or a hit to your credit rating. However, loan modification can permit the homeowner to remain in their home. Also, it may potentially mean a lesser impact on their credit rating than a foreclosure typically causes.
Foreclosure is not something any homeowner wants to face. However, a Stop Foreclosure Lawyer Elgin IL can help you remain in your home. Contact ASM Law today to schedule a free consultation.