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...
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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,...
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