Illinois Foreclosure Law
Judicial Foreclosure Yes
Non-Judicial Foreclosure No
Time Frame Average 210 days
Security Instruments Mortgage
Deficiency Judgments Varies
Right of Redemption Yes, limited
Foreclosure In The State Of Illinois
Foreclosure of a Mortgage is a four step process in the state of Illinois.
First the lender must sue the defaulting property owner (usually 3 - 4 months following the first missed payments, although sometimes earlier) and give legal notice of that suit ( called Lis Pendens ).
The second phase is when the lender obtains a judgment for the amount due. Depending on how efficient the attorneys handling the foreclosure are, this step can take place anywhere between 4 and 6 months following the initial filing. Bankruptcy and negotiations for deals can sometimes also delay this step. During these critical first steps is the ideal time for you to negotiate a favorable deal, or to offer your services. For example, realtors could offer to list the property ; attorneys could explore bankruptcy options; lenders could offer financing packages; investors could offer to purchase the property.
The third stage of foreclosure in Illinois occurs after the redemption time for the homeowner has expired the (later of either ) 7 months following the day the defendant is served or 3 months following the day of judgment. This is the foreclosure sale, or the Sheriff's sale. Commercial property owners have only 6 months following service or 3 following the judgment to redeem. Of course, bankruptcy and other workout plans can delay the process.
Properties are auctioned beginning with the opening bid submitted by the foreclosing lender. In Illinois, investors at the sale are required to put 10% down at the time of sale and the balance within 24 hours. This means that, in our state, investors must have CASH to take advantage of the deals on auction day. This is different from most other states and makes for a very high percentage rate of R.E.O. (Real Estate Owned) properties. If there are no successful bidders at the auction , the property is awarded to the plaintiff and becomes an R.E.O. property. This is the most common fate for a property that actually hits the auction block. Investors can then try to deal directly with lenders after the foreclosure sale to purchase R.E.O.'s at discounted prices.
Illinois process is long compared to most other states. Only a few other states have their entire redemption period prior to the foreclosure sale. It is for this reason and because bidding requires cash that many deals are made at the pre-foreclosure stage in our state.
The Foreclosure Report of Chicago is the best source for fast, accurate, easy to read information on foreclosures in Chicago land. We do the research for you so that you can spend your time negotiating your deals.
