So, you’ve missed some payments on your mortgage and you wonder “Now what?” You know that a foreclosure case is an inevitability, but when will it come. Here’s a brief timeline. Your case may be different.
The uncertainty of foreclosure making you look like this guy? Educating yourself about your options and what to expect is the best way to calm your fears.
Step 1: You actually miss payments.
After you miss one payment, your mortgage lender will probably send you a couple of notices. One, which is required by the loan you agreed to, is a “Notice of Acceleration.” Acceleration is the process by which the entire amount of the loan becomes due and payable immediately, and the bank no longer has to accept monthly payments. In order to accelerate your loan, the bank has to send you a notice telling you that they are going to do it unless you act to stop them (typically, by getting your payments current within 30 days).
Another notice your bank will send you is your Illinois Grace Period Notice. This notice is required by the law codified at 735 ILCS 5/15-1502.5. Under the Grace Period Notice law, your bank must inform you that housing counseling is available to you, and the bank can take no steps to foreclose within 30 days of the date they send the notice. If you take them up on the offer for housing counseling, the bank cannot foreclose for an additional 30 days.
Step 2: The lender files its foreclosure suit.
In about 90-120 days after you miss your first payment, the bank contacts its foreclosure attorneys and they file a lawsuit to foreclose. The foreclosure attorneys cannot file a foreclosure immediately because they must review title to the property to determine who they have to sue. Typically, they name everyone with an interest in the property–your condo association or HOA, the lenders for other mortgages, your spouse, anyone who has liened your house, etc. The big foreclosure law firms run these title reports in house, and they typically have results within a week or sooner.
Once the foreclosure attorneys know who they have to sue, they assemble and file a simplified foreclosure complaint in the form proscribed by Illinois law.
Step 3: You get served with the lawsuit.
Before any lawsuit can proceed, the court has to obtain “personal jurisdiction” over all of the named defendants. The typical way for this to happen is they send a process server of sheriff’s deputy to physically hand you or a resident of your house a copy of the lawsuit and a summons to come to court. If the process server has a difficult time serving you, the bank request that the court permit them to serve you by publishing a notice in the newspaper. While this is embarrassing, not to worry because another notice will be published in the newspaper down the line.
95% of foreclosure defendants are served within a month of the lawsuit being filed.
Step 4: Your first court date.
Most counties stamp a notice of the first court date in the case. Don’t think that you have nothing to do until that date. The summons the process server gave you probably commands you to file your appearance and answer with the Clerk of Courts within 30 days of being served. The foreclosure attorneys can technically ask for the court to enter a default judgment against you if you have not appeared and answered by day 31, but I have never seen this happen in routine foreclosure cases. However, if the person or company that filed the foreclosure complaint has an ax to grind against you, be aware that this is a possibility.
If you ever think it would be worthwhile to hire an attorney to help you defend your foreclosure case, talk with that attorney before filing your answer to the complaint. You probably don’t know what you’re doing, and if you answer the complaint wrong it will be used against you later in the case.
Assuming you have not answered by the first court date, if you show up most foreclosure judges are kind enough to grant you a 30 day extension to file your appearance and answer. They don’t have to, and if it appears that you’re only asking for more time to drag the case out they won’t, but this extension is routinely granted. Be polite in court, don’t anger the judge or give him/her a reason to think you have improper motives, and don’t disregard court orders. If you are ordered to answer in 30 days, you had better file an answer or other pleading directed to the complaint within 30 days.
Step 5: Judgment.
Foreclosure cases aren’t difficult to prove. The loan documents and mortgage speak for themselves. That said, it takes some time for national banks to mobilize their bureaucracy to assemble evidence sufficient to prove that your house should be foreclosed. This can take months, or it could happen very quickly. In my experience, the bank will move for summary judgment within 30 days of the filing of your answer. If you show up to court to ask for time to respond to the motion for summary judgment, you customarily will get 30 days to file a written response, the bank will get 14 days to file a reply to your response, and the court will set the motion for hearing at the next available date (typically 2 months after the motion for summary judgment is presented to the court).
Step 6: Redemption.
After judgment is entered, the case is not over. Under Illinois law, you have the right to “redeem” your property. You have 3 months where the bank cannot auction your house and if you come up with the money the bank is owed, you can keep your house. Although this option is nice, if you had enough money to pay off the loan in full, you wouldn’t be late on your mortgage payments. The bank will publish notice of the judicial sale of your property during this time in a local newspaper.
Step 7: Judicial sale.
Your house will be auctioned shortly after the period of redemption expires. The auction will take place in an office conference room, and typically the only people who attend are representatives of the banks themselves. Third-party buyers typically avoid these auctions because you have to put 25% of your bid down on the spot and have to pay the rest of the money within 24 hours. The bank will probably purchase your house and use the judgment it obtained against you at summary judgment to “credit bid” for the house. Money rarely changes hands.
Step 8: Approval of sale.
About a month after the auction, the bank will file a motion with the court seeking approval of the judicial sale. These motions are routinely granted, but the court will give you time to file a written response if you ask for time to file one. Unless the bank bought your house for a laughably small sum or there was a technical defect in the way the sale was conducted or published, the court will probably approve the sale. In the order approving sale, the court will give you 30 days (60 if you ask for it nicely) to move out.
Step 9: Eviction.
Some foreclosure attorneys will file a separate eviction suit to physically remove you from the property. Other foreclosure attorneys will deliver the order approving sale to the Sheriff and evict you with that order. In any event, if you are not completely moved out by the day the 30-60 day stay in the order approving sale expires, you should be very concerned that a sheriff deputy could show up any morning with movers to remove you from the house and move your possessions to the curb. Once you are evicted, if you re-enter the property you will be arrested for trespassing.
Total timeline: 12-18 months.
What can you do to delay your foreclosure?
You can do a number of things to delay your foreclosure. If you need time to pursue a loan modification, short sale or other form of loss mitigation, you can buy yourself some more time to accomplish these tasks. You have other options as well. The value of a foreclosure attorney is to sit down with you, review your options, and develop a strategy for you to accomplish your goals. There are no one-size-fits-all strategies or options.