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How To Buy A Foreclosure In Illinois

Purchasing a foreclosure in Illinois can present a unique opportunity for buyers looking for a potential bargain or an investment property. Foreclosed properties are those where the homeowner has been unable to meet their mortgage obligations, leading the lender to take possession of the property and sell it to recover the unpaid loan amount.

This process can offer buyers lower prices compared to traditional real estate listings. However, buying a foreclosure involves specific steps, legal processes, and considerations that differ significantly from other real estate purchases. Understanding these can help buyers make informed decisions and potentially benefit from significant savings.

The process begins when a property is officially foreclosed and owned by the bank or lender, known as a real estate owned (REO) property. These properties are then typically sold through auctions or directly on the real estate market. Purchasing a foreclosed home requires thorough research, keen attention to legal details, and, often, the ability to act quickly. Potential buyers must navigate through various legal stages and comply with specific Illinois statutes that govern foreclosure sales. Awareness of these legal frameworks and potential risks associated with purchasing foreclosed properties is crucial in making a sound investment decision.

Opportunity In Buying Foreclosures In Illinois

Foreclosed properties in Illinois can often be purchased at prices below market value, which is the primary allure for many buyers. These properties, however, might come with their share of challenges, including neglect and damage, as they might need to be maintained adequately. It’s beneficial for buyers to conduct a comprehensive inspection and assess any property damage or issues that could incur additional costs. This assessment helps in understanding the overall value and potential expense of bringing the property up to standards.

Understanding The Legal Process

The legal process of buying a foreclosure in Illinois starts when a property enters foreclosure after a homeowner defaults on their mortgage. This legal action is initiated by the lender through the court system, resulting in a judgment and eventually an auction where the property is sold to the highest bidder. Buyers interested in foreclosures should track these auctions, which are typically published in local newspapers or online court records. Buyers need to prepare by arranging financing in advance, as foreclosure purchases often require quick payment.

Legalities And Risks

Buying a foreclosure involves several legalities that require careful attention. One primary legal consideration is ensuring the title is clear. This means the property must be free of liens, other claims, or encumbrances that could complicate the transfer of ownership. Buyers should invest in a thorough title search and consider purchasing title insurance to protect against any potential title issues. Additionally, buyers must be aware that foreclosed properties are generally sold “as-is,” which means the seller, typically a bank or lender, makes no warranties regarding the condition of the property.

Steps to Purchase a Foreclosure in Illinois

Research – Start by identifying potential foreclosure properties through online databases, real estate agents specializing in foreclosures, or public records.
Inspect the Property – Before bidding or making an offer, inspect the property thoroughly to assess its condition and estimate any necessary repairs or renovations.
Check Legalities – Conduct a title search to ensure there are no liens or other legal encumbrances.
Secure Financing – Arrange your financing beforehand, as foreclosure sales often require quick payment and generally do not qualify for seller financing.
Retain an Attorney – Consult with a real estate attorney skilled in Illinois foreclosure law to navigate the legal aspects of the purchase process. An attorney can assist with contract review, negotiations, and ensuring that all legal requirements are met.
Attend Auction or Submit an Offer – Participate in the auction if the property is being sold in this manner or submit an offer through a real estate agent if it is listed on the market.

Consulting With An Illinois Real Estate Attorney

Given the complexities and potential risks involved in buying a foreclosure, it is advisable to consult with a real estate attorney who understands Illinois foreclosure law. Our attorneys can guide you through the legal intricacies of the purchase process, from bidding at an auction to ensuring the final sale meets all legal requirements. Our firm can also assist in negotiating with the banks, managing the paperwork, and ensuring that your investment is secure.

While buying a foreclosure in Illinois can be a pathway to obtaining a property at a reduced cost, it comes with its set of challenges and legal considerations. Prospective buyers must approach these opportunities with diligence, thorough preparation, and, ideally, with experienced legal guidance to navigate the complexities of foreclosure purchases. This careful approach will help ensure that the investment is sound and that the property can be secured without unforeseen legal complications.

Contact Our Illinois Foreclosure Attorney For Guidance

Attempting to navigate the process of buying foreclosed properties without the assistance of an experienced legal advocate can significantly complicate and hinder your efforts. To ensure that your foreclosure purchase is handled with the highest level of experience and care, contact our Naperville foreclosure attorney at Covert Marrero Covert LLP. You can call us at (630) 717-2783 to schedule your initial consultation. Our firm serves clients in Warrenville, Naperville, and Schaumburg, Illinois.

Pros And Cons Of Buying Foreclosures

When a home is sold through a foreclosure auction, it means the owner could not keep pace with their monthly payments. After several missed payments, the lender can take possession of the home and sell it at auction. The purpose is to recover as much of the outstanding debt as possible on the home loan. Buying a foreclosed property for investment purposes means buying a home where the last owner did not pay mortgage payments, property taxes, or both.

If you are considering buying foreclosures for your next investment, the information in this blog post will be of interest. For help with buying foreclosures or other types of Illinois investment properties, our Illinois foreclosure attorneys can guide and advise you. Call today for a legal consultation at (630) 717-2783.

Pros Of Buying Foreclosures

There are several potential benefits of buying foreclosures as real estate investments. They are:

Lower Price

When the bank repossesses a home during a foreclosure, they are often motivated to sell it to reduce their losses. There may be an unpaid mortgage balance, outstanding property taxes, and other liens the lender had to pay off. Because the bank may want to recoup its losses quickly, you can purchase the asset at a lower price than similar homes in the community.

The price of the home also may be less than average because the property may not be in mint condition. Some foreclosed homes have not been kept up and may need substantial repairs. So, while you could get a lower price for the home, be prepared to spend money on repairs and renovation.

Investment Potential

Because the home is often cheaper, you can have a solid return on your investment. Foreclosure purchases are popular with house flippers who can purchase a home at a lower price and make the necessary repairs affordably. Then, they can sell it for a profit. But if you want to do this, it is vital to have a thorough understanding of the home’s condition, so make sure you pay for a complete home inspection before purchase.

Cons

Buying foreclosure can be a wise investment decision, but there are cons to consider. They are:

Timeframe Is Uncertain

Banks generally want to offload their foreclosed assets quickly, but the timeline to acquire a foreclosed can vary. Even if you are the only investor who makes an uncommon offer, the lender could have dozens of foreclosures. This means it could take weeks or months for the lender to sort through all of the information requests and offers. If you want to get the home quickly to turn a profit, you might need to wait longer than you prefer.

Home Condition

Foreclosed homes may not be in ideal condition. After all, if the owner could not afford the loan payments, they probably could not afford to keep the house in good repair. They also may not have had the time or energy to do the necessary upkeep and maintenance to keep the home in good condition.

Also, the home may have been vacant for months, so there could be even more run down. There also are the possibilities of squatters and vandalism. Ensure you understand the home’s condition and needed repairs before closing.

Investing In Real Estate? Our Illinois Foreclosure Attorneys Can Assist You

For assistance with investing in real estate, speak to one of our Illinois foreclosure attorneys at Covert Marrero Covert LLP today. Call (630) 717-2783 for a consultation about local real estate opportunities, including buying foreclosures. Our real estate attorneys have years of experience with all types of Illinois real estate transactions.

How Does A Deficiency Judgment Impact Illinois Foreclosure?

Are you facing foreclosure in Illinois? The foreclosure process is complicated, and it can have financial consequences that last for years. In addition to issues related to foreclosure, the lender can get a deficiency judgment against you for the outstanding balance when the foreclosure is done. Learn about deficiency judgments in this blog post, and speak to our Illinois foreclosure attorneys today if you need assistance.

Deficiency Judgment Overview

In Illinois, the lender can ask the court to approve a deficiency judgment if they want to pursue you for what you owe after the home forecloses. The outstanding debts are supposed to come from the foreclosure sale proceeds. But if the sale amount does not cover the outstanding debt, you must pay what is left according to the deficiency judgment. Two kinds of deficiency judgments can be ordered in Illinois:

In Personam

This type of deficiency judgment is issued against the borrower. In this situation, you would be personally liable for the debt, which means the lender could garnish your wages, levy your bank account, or even seize your non-exempt assets.

In Rem

This type of deficiency judgment is passed on the property. This means that the borrower redeems the home by paying the balance to the lender with extra interest and fees. In this situation, the lender could put a lien on the home for the remaining debt.

For example, suppose you owe $500,000, and the house sells for $300,000, so the deficiency is $200,000. If the mortgage lender sues you and obtains an in personam or in rem deficiency judgment, you must pay them back. If you do not pay the judgment by shutting your bank account or generally refusing to pay, your lender may send a collection agency after you.

Fortunately, there are options if you are hit with a deficiency judgment. For example, the best choice is to file for bankruptcy when you get an in personam deficiency judgment. Chapter 7 is usually best because all of the debt is wiped out. If you file for Chapter 13, you must repay part of the debt with a repayment plan. Regardless, you should have an experienced attorney advising you.

It is hard to say if a lender will come after you for the deficiency amount. The lender may want to avoid lawsuit expenses and forgive some or all of your debt. But if the lender mails you a Form 1099-C, you must include the debt forgiven as income on your next tax return.

How Do You Find Out The Deficiency Type In Your Case?

The deficiency judgment will come at the foreclosure sale confirmation after the foreclosure sale. This occurs when the foreclosure is over. You should review the order confirming the sale to determine which type of judgment was ordered. The document should have a paragraph that describes the judgment type and how much the deficiency is.

Contact Our Illinois Foreclosure Attorneys Today

If you face foreclosure and have legal questions, you do not have to face your situation alone. An experienced attorney can help you get the answers you need. Contact our Illinois foreclosure attorneys at Covert Marrero Covert LLP for help at (630) 717-2783.

What To Do If Your Property Is Going Into Foreclosure

If your home is going into foreclosure in Illinois, it is understandable if you are stressed and unsure about the future. However, be aware that if you are behind on your mortgage payments in Illinois, the loan servicer will eventually start the foreclosure process by filing a lawsuit in court. However, it can take 12 to 15 months in Illinois to complete a foreclosure, so you may have time to work things out.

In this article, you will learn what to do if your property is going into foreclosure. If you need help, you can count on our foreclosure attorneys in Illinois at Covert Marrero Covert LLP to help.

Notice Of Breach

The lender is required to send you a breach letter at least 30 days before the foreclosure is filed. It must contain the total due to cure the default. If you cannot pay the accelerated debt, the foreclosure process begins.

When Can Foreclosure Start?

US law requires the loan servicer to wait 120 days after the last payment to start foreclosure proceedings. However, the process can start sooner if you have violated a due-on-sale clause or the loan servicer is part of a foreclosure action with another lienholder.

How To Reinstate The Mortgage Before Foreclosure Sale

Even if the foreclosure process has started, there are ways you can fix the situation. Reinstating means bringing the mortgage current when you pay the delinquent payments, including principal, interest, and late fees. Once you complete the reinstatement process, the foreclosure stops.

Illinois law states you can reinstate the loan within 90 days after you get a summons regarding the foreclosure. However, many mortgage companies will let you reinstate the loan if you do so at least a few days before the foreclosure sale. It is usually in the loan servicer’s interest to avoid foreclosures if possible.

Be Aware Of Deficiency Judgments After Foreclosure In Illinois

If your home is sold in a foreclosure sale, it may not produce enough money to pay off the full loan. The difference between what the home is sold for and the total debt is known as a deficiency balance. Illinois law allows the mortgage lender to obtain a personal judgment – a deficiency judgment – for the amount owed.

Foreclosure Sale And Eviction

In the State of Illinois, before the foreclosed home is sold, a sale notice has to be put in the newspaper for three weeks. You also must be notified by mail at least 10 days before the foreclosure sale.

Call Our Foreclosure Attorneys In Illinois Today

Illinois foreclosure laws are complex, and lenders and servicers may make errors or skip steps. If you believe your lender or mortgage loan servicer did not follow the foreclosure process correctly, you could have a case that makes the company restart the foreclosure process.

Contact our foreclosure attorneys in Illinois at Covert Marrero Covert LLP at (630) 717-2783 if you are facing foreclosure. We may be able to help to save your home and provide other legal options available to Illinois residents.