Foreclosure is Common in Chicago
If you own a home in Chicago or the surrounding areas and are currently facing the threat of foreclosure, the first thing to know is that you are not alone. According to RealtyTrac, Illinois has one of the highest rates of foreclosure in the nation. In fact, only Florida, Nevada and California have higher foreclosure rates than our state, where nearly 11,500 properties - 1 in every 461 houses - are being foreclosed. In comparison, the nationwide rate is 1 in 810. Within Illinois, the highest concentration of foreclosures by far is in Cook County, followed by Lake County, Will County and Du Page County. The fact that foreclosure is common in Chicago does not mean that it has to happen to you. Follow the links below to learn more about strategies that a Chicago foreclosure defense attorney from Borden Law Firm, PC may be able to use to help you keep your home or to make a clean break while also avoiding negative consequences for your financial health.
Helping You Avoid a Foreclosure in Chicago
Second Mortgage Foreclosure
If the bank that holds the original mortgage to your home forecloses on the property, the lender for any second mortgage such as a home equity loan may not end up recovering any proceeds from the sale of the property, since the primary mortgage holder has priority in the action. Second mortgages are generally considered recourse loans, meaning that the lender may have grounds to sue you to recover the amount you still owe them.
When your property is "upside-down" or "underwater," meaning that you owe more on the loan than you would be able to get by selling the house to another buyer, the best option for avoiding foreclosure is often to negotiate a short sale. The goal is to get the bank to agree to allow you to sell the property for less than you owe and to forgive the balance of the loan.
Deed in Lieu
One of the fastest and simplest ways of avoiding a foreclosure is to contact the bank and to get their agreement to accept your offer to surrender the deed to the property in exchange for forgiving the balance of the loan. This is referred to as a deed in lieu of foreclosure, because it allows to essentially walk away from the mortgage with minimal consequences to your credit.
Short Sale Negotiation
Generally, a short sale is in the best interests of everyone involved: the bank gets to avoid the substantial costs of a foreclosure and you get to walk away from a home that you can no longer afford. This does not mean, however, that you should expect the bank to willingly agree to your request. Banks will typically put up considerable resistance to a short sale - otherwise everyone would seek this option as soon as they could - and it is best to have a skilled attorney on your side to negotiate the deal.
Waiver of Deficiency
One of the most crucial steps in negotiating a short sale is to obtain a waiver of deficiency from the bank. This document is essentially the bank's agreement that they will not hold you responsible for paying the difference between the amount you owe on the home and the sale price. Otherwise, you could be held as being delinquent for the remaining loan balance, leading to further credit damage and a court order to pay the remainder.
In some cases the best response for an impending foreclosure is to simply stop paying your mortgage. Many people will scrape and scramble up until the very last moment to continue to meet their obligation to pay, subjecting themselves and their families to severe stress and economic hardship only to put off the inevitable for another month. Strategic default allows you to wash your hands and walk away with a minimum of stress, and may even be necessary for a short sale or other strategy.
Having to give up your home in a short sale is bad enough, but to make matters worse you could still end up owing the bank money. A large percentage of home foreclosures involve properties that are underwater, with the result that the proceeds from the foreclosure sale will not be enough to satisfy the outstanding loan balance. When this happens, the lender may pursue the borrower to recover the remainder of the amount owed.
Do I need a Chicago foreclosure defense attorney?
You are not legally required to hire a lawyer to represent you in any aspect of the foreclosure or short sale process. You are entitled to represent yourself in any and all negotiations with the bank, as well as speaking on your own behalf in court when necessary. The question is, however, "Why would you want to?" Real estate and financial transactions are already complicated enough, without adding in the complexities of state and federal law. Even minor mistakes or omissions in handling the case could end up costing you greatly.
You could fail to prove your case against the foreclosure, the bank might deny your request to approve a short sale, or even if you are allowed to sell for less than the loan balance, you could be sued for the deficiency. There is simply too much at stake to take any chances with the outcome. We strive to make our services affordable to our clients, and in everything we do we always work to achieve the best possible results. Contact us now for a free consultation to learn more about your options and to get started on your case.