Foreclosure is a legal action that mortgage lenders employ to take control of a property that is in debt.The borrowers try to ignore their lenders in order to evade legal action. What they don’t know is that the lenders are generally willing to work some ways around. They usually make adjustments to the loan structure. This is why borrowers who are about to face foreclosuresin Chicagoshould not ignore their lenders.
The effect of the Coronavirus Pandemic
The pandemic has created severe hardship for millions. To do their bit and help people in these hard times, the government has launched some relief options. If your mortgage is backed by the government, you are protected by the CARES (Coronavirus Aid, Relief, and Economic Security) act.
You should contact your contractor and explain your situation that has been affected by this pandemic. You should try all ways to pay the mortgage before you speak with your contractor. If you don’t do so, you are at the risk of being ineligible for future relief.
When does a foreclosure set in motion?
Before the procedure of foreclosurein Chicagobegins, borrowers go through a series of preliminary steps. When a borrower fails to make alternative payment arrangements for the property, the repayment agreement is broken. This is where the process of foreclosure begins.
The repayment agreement is contained in the contract you signed when the deal was made, as a part of the mortgage commitment. Before doing anything, recheck your agreement to find anything you can take advantage of.
Steps of Chicago foreclosures
1. Missed payments
When you failed to make a payment, your lender usually offers a grace period of up to 15 days to give you a chance to make the payment after the due date. If you fail, you could be charged a late fee.
When your lender considers that you have missed a payment, they’ll mark you as a defaulter. The number of days before you are marked as a defaulter depends on the lender; some do it in 15 days while others may extend it up to 30 days.
The next step of Chicago foreclosures depends on the type of foreclosure you have. When there is no “power of sale” in the mortgage agreement, a judicial foreclosure takes place. Judicial foreclosures are controlled by the state. In the presence of a “power of sale” clause, a non-judicial foreclosure happens but it depends on the law of the state. In this kind of foreclosure, the procedure is faster and cheaper.
3. The lawsuit
a) Judicial foreclosure: Your lender will file a lawsuit if it’s a judicial foreclosure. If you don’t respond, you’ll be considered a defaulter. Otherwise, the case will either go on trial or the judge may file a motion of summary judgment. When there is no proper dispute about the material facts regarding the foreclosure, the judge goes for a summary judgment.
b) Non-judicial foreclosure: In this case, the lender issues a notice of default (NOD) that is also documented on the county registrar. The notice contains the total outstanding amount including past dues, late fees, and the cost of foreclosure. After this, you’ll have about 90 days to come up with a payment procedure.
4. The interim period: Pre-foreclosure
To prevent the sale of the property, the borrower can pay the outstanding amount after they receive the NOD. This halts the process of foreclosure and the borrower doesn’t get evicted.
5. Notice of sale
If you fail to save your property during the notice of default period, the lender will issue a notice of the sale of your property. The notice of sale usually gets published in the local newspaper and also be posted on your property. Next, your home gets put up for auction and the time and date are allotted for sale.
Once your property is sold at the auction, you’ll have to move out. The period you’ll get to vacate the property is totally dependent on your state’s laws.