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, with the lender’s agreement, or other loan modifications that could help you.
Apply for a Reverse Mortgage
A reverse mortgage is a mortgage loan. It will help you borrow money based on what you have already paid on your home. If the lender has not yet foreclosed, they may be willing to give you this option to settle your debt. The borrowed money pays off your arrears. There are several stipulations. For example, some banks offer this option only to people aged 62 and older. Also, there are requirements regarding the amount of equity in your home, which your lawyer can explain.
Seek a Personal Loan
If you have otherwise good credit, a lender other than the one holding your mortgage may be willing to lend you money to save your home. You can also seek a personal loan with a relative or friend, with your attorney drawing up a contract with terms and conditions to repay that amount. Be sure to use a lawyer for any loan option. Nonreputable companies and individuals may offer to help you but with unfair or even illegal terms.
Use Government Help: COVID-19 and CARES
In times of a national crisis, the federal, state, or local government may offer assistance to homeowners at risk of foreclosure. During the COVID-19 pandemic, the United States government created the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Under this program, the government gave homeowners with federally backed mortgages up to a year or more forbearance on their mortgage payments. With CARES forbearance, homeowners could pay their mortgage at a lower payment or pause payments fully.
A foreclosure defense lawyer can help you apply for relief under these types of programs. They can also use the programs to defend you against lenders who violate government regulations.
What If I Do Not Want to Take Action?
Sometimes homeowners feel that they have no viable options to save their homes or choose not to save them. Even then, it would be best if you had an attorney, as they can help you review bankruptcy and deed in lieu of foreclosure avenues.
Based on your overall financial situation, bankruptcy might allow you to address all of your debt. In addition, a bankruptcy court judge can enable you to keep your home as part of their ruling. If you do not want to keep your home, your lawyer can try to negotiate a deed in lieu of foreclosure. With this deed, you will voluntarily transfer your home to your lender to settle your mortgage debt.
Both of these actions have long-lasting effects on your credit, lifestyle, and homeownership. It is best to work with an attorney before pursuing either.
Your situation may seem daunting. However, there is always a way for an experienced attorney to help you in potential foreclosure situations. Hire a reputable foreclosure defense attorney who can explain your options.
Vantage Group Legal Services: Your Chicago Foreclosure Defense Team
Vantage Group Legal Services can assign you an attorney who is an expert in foreclosure defense. With our service, you will have high-quality legal representation and support staff. For a free consultation, give us a call at (773) 938-4747, and we will handle all aspects of your case. Contact Vantage Group Legal Services today.