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 payments and whether making the payments will help you.
Contact Vantage Group Legal Services for Foreclosure Defense
Vantage Group Legal Services is based in Chicago. We make legal representation affordable and straightforward. We have experience in foreclosure law and offer a free, no-pressure consultation. When you subscribe to legal services through Vantage Group, we will assign you a reputable network attorney who can meet with you either in person or virtually to discuss your case. Learn more about our services, and contact us today.