A foreclosure can be a sprint or a marathon.    It is contingent on whether the homeowner will allow the bank to run its race (“aka the foreclosure process”) with opposition and hurdles or with a clear lane to the finish line.  In Illinois, the bank is required to go through the foreclosure process to obtain lawful possession of real estate after a homeowner has defaulted on its mortgage.

 In foreclosure, a bank is required to file a complaint, obtain a judgment, conduct a sale, and have a judge confirm and approve the sale. While the minimum requirements may appear to be an unobstructed path to the finish line, often the journey may transform into a new destination due to the options available to the homeowner.

Unfortunately, the vast majority of homeowners fail to evaluate their options, evaluate where they are in the in the foreclosure race, and evaluate whether they can assert their rights in this process.  This article and blog allows homeowners to be more than spectators.  It can be used as a tool to gain some limited general knowledge when faced with a foreclosure.  Nothing in this blog can replace an attorney’s personal evaluation of a foreclosure case or individual factual circumstances surrounding your case. In fact if this blog could be summarized in one phrase it would be “SEEK THE ADVICE OF AN ATTORNEY.”   The bank has a team of attorneys, law firms, lobbyists, and advisors that know the rules of the race and train daily to protect the bank’s interest.  A foreclosure defense attorney protects the homeowner’s interest and ensures the bank jumps over every hurdle and considers every path that is advantageous to you.

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            The United States has two methods to foreclose on a property depending on the state where the property is located.  Either a state is a judicial foreclosure state or a non-judicial foreclosure state.  The different between the two methods is whether the bank has to go through the judicial process to obtain lawful ownership of the property after a homeowner has defaulted on mortgage payments.  In Illinois, a judicial foreclosure state, the bank must prove the homeowner/ borrower defaulted on the terms of their mortgage and that the bank is entitled to possession.  On the other hand in a non-judicial foreclosure state, such as Tennessee, the bank does not have to go through the judicial process and it would be incumbent on the homeowner to seek judicial intervention to assert rights before a court. 

As a result of Illinois being a judicial foreclosure state, the homeowner has an advantage because a default in mortgage payments is treated as a breach of contract between the lender and borrower.  In Illinois, first the bank must file and serve a foreclosure complaint.  A foreclosure complaint typically is a form court document that includes the amount the homeowner is delinquent and generally attaches a copy of the mortgage and note to prove its case.  The complaint is usually served, meaning physically given to the homeowner, by a sheriff or special process server.   The lack of proper serve does not bestow the court with the authority to rule in a case.  If a Court finds that service was not proper the foreclosure complaint will be dismissed, and the bank will have to start the process over.

In my experience, banks hire third party independent contractors as process servicers to serve their foreclosure complaint on homeowners.  The process servicer may serve the wrong person, dishonestly lie about serving the proper person, or serve a family member under the age of 13.  In one of my cases, a process server claimed to have personally served my client.  However, at the time of the alleged service my client was on vacation in Mexico.  Alternatively, if after several attempts at personal service a bank can serve a homeowner via publication.  Service via publication is providing notice through a local newspaper.  If service is a question in your foreclosure case you should consult an attorney because this tool can be waived with an appearance in court or through other means. 

            The foreclosure process can be split into two stages the prejudgment stage and the post judgment stage.  The majority distinction between the two periods is that the first stage (the prejudgment stage) has no official timeline.  The second stage has a definite timeline.  The bank’s goal is to obtain a judgment so they know when the process will conclude.  Homeowners benefits most from the prejudgment stage because the windows of opportunity to pursue lost mitigation options such as loan modification or forbearance are at their peak when the bank does not know when the process will conclude.  It takes an extraordinary length of time on average a year to litigate an uncontested case.  Therefore, a homeowner maximizes their opportunity to save their home by engaging an attorney early in the process.

The first court hearing is called a Case Management hearing.  A case management status dates are tools for judge’s that helps them manage their court calls.  Nothing relevant or dispositive occurs at these status hearings.  However, the judge often attempts to ascertain if service has been obtained, it the homeowner intends to pursue a loan modification, and inform the homeowner that they are in a judicial process and have the right to answer the complaint that was filed by the bank. A judge generally gives a homeowner 28 days to Answer the Complaint and otherwise plead. 

The next substantive court hearing is the summary judgment or default judgment hearing.  This is the bank’s opportunity to prove its case and dispose of any potential affirmative defenses.  If the Motion for Summary Judgment is granted the official time line begins. The period after a judgment is entered is called the redemption period.  The redemption period is the time the law allows a homeowner to repay the amount awarded the bank in a default or summary judgment.   In Illinois, the redemption period is 90 days. After the redemption period expires the bank has the legal authority to proceed with a foreclosure sale.

A foreclosure sale is an auction of the subject property.  The bank provides notice of an auction date to the public but often is the only party to bid on the property.  After the foreclosure sale the bank has only one final step, which is called the approval or confirmation of sale. 

The confirmation of sale is the final judgment in a foreclosure case. The judge reviews that amount the property was sold at the auction determines the amount the homeowner owes, transfers property rights, and establishes a possession date that is a minimum of 30 days that the homeowner can stay in the property without the bank initiating an eviction lawsuit. 

            Viewed broadly, the foreclosure process is streamlined and routine.  However, with an attorney and knowledge of the process a homeowner can maximize the multiple windows of opportunity to use the process to their advantage.