Facing foreclosure is stressful, legally complex, and a danger to your credit. If you have missed mortgage payments or your lender has filed a Notice of Default (NOD), you might feel like there is nothing you can do to prevent the loss of your home. But you are not without hope. In Illinois, there are legal avenues an experienced foreclosure lawyer can use to help you save your home. Negotiating with the lender, using government relief avenues, and taking the lender to court are just some of the methods the lawyer can use to help you. If you have received or expect to receive a foreclosure notice, you should immediately contact an attorney. Let’s look at just a few ways an attorney can help you save your home and protect your credit. Negotiate with the Lender to Resume Payments If you can pay the money you owe to the lender due to missed mortgage payments, now or shortly, you may be able to save your home. Your mortgage is a loan. A bank is usually the lender of the mortgage. Foreclosure is the lender’s process for taking a homeowner’s property because the homeowner failed to make agreed-upon payments to pay back their loan. The lender forecloses to take the property and sell it. The sale of the foreclosed property is the typical way the lender gets its money back. But suppose you can demonstrate your ability to pay the lender the money you owe and stay current with future payments. In this case, your lawyer may be able to negotiate with the lender to stop your foreclosure. There are a couple of ways to do this. Pay the Amount Past Due in Full Now Your attorney can call your lender and determine precisely how much you owe the lender. If you can pay that full amount, the attorney will contact your lender immediately. They will make an offer for you to pay the full amount in arrears (the payment amount you are behind) and your next mortgage payment due in a timely manner. In return, they will ask that the lender end the foreclosure process. For instance, if the amount in arrears is $3,000 on a mortgage payment of $1,000 per month, you must be able to fully pay the lender $4,000 (the $3,000 past due and the next due mortgage payment of $1,000) immediately. It would be best if you considered the impact this may have on other bills before your lawyer makes this offer to the lender. Also, be sure that you are prepared to continue and pay the standard monthly mortgage from now on. Get on a Payment Plan Another option is to catch up on the arrears over time. Your lawyer can work with you to determine what amount you can pay beyond your standard mortgage amount. They can then negotiate with the bank for you to pay this additional amount until you catch up on your past due amount. Let’s say you are behind $1,600 on a mortgage of $800 a month. You advise your attorney that you are now in a position to pay your full monthly mortgage of $800 a month, plus another $400 each month. The lawyer could negotiate a $1,200-a-month payment for four months. Under this agreement, you will be caught up on your mortgage at the end of four months and no longer at risk of foreclosure. If you are in a position to pay off your arrears and continue making your current payments, you could be able to avoid foreclosure. Remember, the lender wants their money. Hiring an attorney who can show the lender a reasonable way to receive the money they are due is usually the fastest and easiest way to stop a foreclosure. Request A Loan Modification If you have had an unexpected change in financial circumstances, a loan modification may be your best option. In this situation, your attorney will contact the lender and explain your circumstances and how they impacted your ability to make timely mortgage payments. Standard hardships lenders may consider, which often affect homeownership and finances, include: A recently contested divorce proceeding; An accident that caused significant injury or disability; Income decline due to an unexpected job loss; A salary reduction at a long-term current job or new job; Being the victim of fraud or another financial crime; A national crisis, such as a pandemic; Child support and custody issues; or A sudden death in the family. Lawyers will gather facts and proof of the incident(s) that relate to your financial change. They will then ask the lender for your loan to be modified (lower payment for a time, refinance to a longer mortgage term, or another option that will reduce your payments). They may also ask the lender to forgive the past due amount or add it on to the end of the mortgage. With either approach, you will need to show that you now have a source of income and can make the agreed-upon new payments. A lender’s automated email and phone banks do not analyze or recognize hardships. However, specific workers for the companies can do so, especially if you have had a strong payment history up until this time. Your attorney will know to whom and how to make the case for a hardship loan modification. Seek Special Relief: CARES Act And COVID-19 Your local, state, or federal government may issue a mandate that will protect you from foreclosure in rare circumstances. Times of a nationwide recession, health crisis, or natural disaster may initiate laws to help homeowners. The relief may come in the form of: Forgiveness of missed payments; Forbearance (suspension) of payments; or A ban on foreclosures for a period of time. During the pandemic’s national health crisis (COVID-19), the United States government created the Coronavirus Aid, Relief and Economic Security (CARES) Act. One purpose of the act was to help homeowners keep their homes during the pandemic’s health and financial crisis. The CARES Act: Gave a...Keep Reading
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If you are fearing foreclosure, an experienced Chicago foreclosure defense attorney can analyze whether you are at risk. If you are, they can help prevent foreclosure and protect your credit. Do not let the fear of foreclosure paralyze you. Be proactive by understanding your rights and using available courses of action. Let’s answer some questions you may have about foreclosure and prevention. What Are the Terms and Conditions of a Mortgage? Your mortgage loan comes with terms you must follow. As you know, paying your mortgage bill is the primary term. However, other terms often include: Paying property taxes on time; Maintaining adequate homeowners insurance; Keeping your property in habitable (safe living) condition; and Complying with payments with your homeowners association (HOA) and any other organizations that could claim an interest in your home. Lenders require your home to stay in decent condition and free of financial claims. The house is the collateral for your mortgage loan. As a result, failure to abide by any of the terms in the mortgage contract puts you at risk of foreclosure. How Do I Know If I Have Violated the Terms of My Mortgage? Whether you are violating your mortgage terms is not always clear. We suggest that you consider each of the following questions to help determine whether you may be at risk of violations: Has the lender sent you a notice regarding missed or late payments? Do your financial records reflect that you have missed mortgage payments? Are you behind on your property taxes? Has your homeowners insurance lapsed, or have you missed payments? Is your HOA threatening legal action against you? Is your house in poor condition, to the point that it is perhaps unlivable? Has the local government, your insurance company, or the lender contacted you regarding the condition of your home? Have you received any correspondence mentioning foreclosure of your home? If the answer is yes to any of these questions, you may be at risk of violating your mortgage terms. As a result, you are at risk of losing your home. What Should I Do If I Am Violating HOA, Tax, or Insurance Mortgage terms? If your HOA, local tax board, or homeowners insurance agency has contacted you, the time to act is right now. Here is how you can prevent foreclosure, depending on the reason you are at risk. Make Arrangements to Comply with Your HOA If you are behind on HOA payments or have unpaid fines for violating HOA rules, you should contact a lawyer to help you negotiate a payment plan for past due fees and fines. You may be out of compliance with your mortgage if you do not do so. Also, you want to prevent the HOA from taking further action. Past due HOA fees can lead to foreclosure by your lender and a lien on your property by the HOA. In Chicago and throughout Illinois, if a homeowners association has a lien on a property, it has the legal right to foreclose on that property. Address Back Taxes with Your Local Government Local governments are often willing to work with property owners who are delinquent on tax payments. But if you do not act, Illinois law allows the local government to seize your home if your property taxes remain delinquent. A foreclosure defense attorney can contact the property tax office and negotiate a way for you to catch up on past-due taxes. Your foreclosure defense lawyer can also address the potential mortgage violation with your lender, based on your tax issue. Repair Your Property and Maintain Homeowners Insurance If you have received a letter regarding home upkeep, you will need to clean up your property to a satisfactory level. These letters may come from your insurance company, lender, or local government. Work to correct the issue (i.e. greatly overgrown lawn, caving in roof, etc.) as soon as you can. If you are not living at the property, it still must be corrected. If you are unable to perform the upkeep immediately, contact a Chicago area attorney. They will advise you on options to prevent foreclosure and contact the sender of the letter(s) for you. You also must keep your homeowners insurance coverage up to date to stay in compliance with the mortgage terms. Your lawyer can analyze your mortgage coverage requirements. They will then contact your provider to ensure your coverage is adequate. The attorney can negotiate payments toward the arrears (the back money you owe) and help you renew or reinstate your policy if it has lapsed. Taking steps to prevent foreclosure is necessary even before the lender gets involved. Start the process of correcting the issues today by hiring an attorney. Don’t wait, or any of these violations could quickly turn into home foreclosures in Illinois. What If My Lender Is Threatening Foreclosure for Non-Payment? If your circumstance is one where your lender is involved and you are behind on payments, the situation is even more urgent. You need an attorney to immediately reach out to the lender and request time to address the problem. There are options, but in most cases, they must be approved by the lender. Here are the primary ways you can still save your home. Make Catch Up Payments An experienced foreclosure defense attorney may negotiate with the lender for you to pay the money past due and stop the foreclosure process. They can arrange for you to make one payment of the full amount in arrears. Another option is to pay off the amount over time. You may be able to overpay your standard payment by a small amount each month until you pay off the arrears. Make Lower Payments Your attorney may also advocate for the lender to forgive some of your debt or give you more time to pay. This generally is an option only in exceptional circumstances such as a death in the family or a sudden injury or illness. These circumstances could also lead to a reduced mortgage payment,...Keep Reading
If you are making payments during foreclosure, it is important to understand whether the lender can accept those payments. In addition, you should evaluate your reasons for making payments. Depending on why you are making the payments during foreclosure, there are likely other options to meet your goals. In Foreclosure, Will the Lender Still Accept My Payments? The short answer is yes. In most states, including Illinois, a lender has to accept your payments until near the scheduled foreclosure sale. Usually, homeowners in foreclosure make payments in an effort to: Save their home; Avoid negative impacts on their credit; Buy time until they can get other help to stop the foreclosure; or Stay in compliance, because they believe they must make the payments. With each of these reasons, making payments during foreclosure may not be the only or best option to meet the goal. Sometimes making payments during a foreclosure can do more harm than good. If I Make Payments During Foreclosure Will I Save My Home? Though the lender does have to accept your payments during foreclosure, the payments do not guarantee you will save your home. Illinois law has redemption and reinstatement laws. These allow a borrower to reclaim their property if the borrower complies with certain payment requirements. Reinstatement involves bringing your mortgage current by paying all missed payments as well as any costs or fees required by the mortgage. In Illinois, the borrower has the right to reinstate the loan up to 90 days after the borrower: Has been served with a summons or by publication, or Has otherwise submitted to the jurisdiction of the court. If you comply with the reinstatement requirements, the foreclosure will be dismissed. You can keep your home and continue paying your mortgage as before. If you have passed the time to reinstate the loan, you may be able to keep your home through redemption. Redemption requires you to pay off the total debt, including the principal balance, plus any additional costs and interest. Under redemption, the borrow has until the later of either: Seven months after the complaint is served, or Three months from the date of judgment. So if you are making payments and can pay the full amount you owe, you may be able to keep your home. Both redemption and reinstatement have massive costs and require legal action on your part. But if you cannot pay the full amount you owe and are far along in the foreclosure process, making payments during foreclosure may not help you save your home. Meet with a Chicago area attorney so that they can review your case and determine the likelihood of keeping your home by making payments during foreclosure. How Else Can I Save My Home? If the goal is to keep your home, hire a foreclosure defense lawyer as soon as possible. There are many ways you still could get out of foreclosure and save your home. The attorney can address options available to you, including: Reverse mortgage, Loan modification, Government relief, and Court action. An attorney will need to consult with you and gain a full understanding of your circumstances to provide you with the best legal advice. Hire an attorney for the support and guidance you need. Should I Make Payments During Foreclosure to Save My Credit, Even If I’m Not Keeping My Home? If not trying to keep your home, continuing to make mortgage payments during foreclosure may not be a wise use of money. The foreclosure will still be on your credit. A better option could be a deed in lieu of foreclosure. With this deed, you agree to give your home to the lender. The lender then agrees to settle your mortgage and not foreclose. During this process, your attorney will also try to negotiate a convenient time for you to leave your home. Stopping payments during foreclosure and turning over your home may sound irresponsible. But in fact, sometimes it is the best option to get a clean slate. With the help of an attorney, you can complete the deed transfer, move on from the foreclosure legally and responsibly, and protect your credit. If I Make Payments While in Foreclosure, Won’t I Get COVID-19 Relief? During COVID-19, Illinois law mandated only that lenders try to work with homeowners and understand the stress the pandemic caused. Making payments does not force Chicago banks to protect or work with you in a new way due to the pandemic. The federal government offered the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. There is no part of the act that says if you make payments while in foreclosure, CARES will protect your home. But there are parts of CARES that may help you for other reasons. A foreclosure defense attorney in Chicago can see if your mortgage lenders followed other aspects of the COVID-19 relief programs that may have helped you. If you are entitled to relief, don’t assume making payments during foreclosure will give you that relief. If the Lender Is Threatening Me, Don’t I Have to Make Payments During Foreclosure? A lender has no right to harass you. If the lender is addressing anything beyond their right to foreclose, their actions may be illegal. Also, reputable lenders rarely use hostile tactics. There are fraudulent businesses that prey on people in foreclosures. Sometimes they offer to save your home if you make payments to them. Never make payments to a third party that has no right to receive any money from you. You should not feel threatened, harassed, or in fear of your lender or anyone else contacting you about your foreclosure. Contact an attorney so that they can review the correspondence and protect you from unlawful tactics. How Can I Know Whether to Make Payments During Foreclosure? To decide whether you will make payments during a foreclosure, hire a Chicago attorney. Look for an attorney with foreclosure defense experience. They can determine if the lender will still accept your...Keep Reading