Understanding the Home Foreclosure Process
Basic Stages of Foreclosure
There are a few stages that are important to any foreclosure process.Foreclosure works differently in different states around the country.The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Illinois homeowners in foreclosure can get help with our free guide or through our contact page to have us walk you through your specific foreclosure process.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many alert notices that you are in arrears beforehand.
- Mortgage lender files suit incourt.
- Court send letter demanding payment.
- You’ll have 30 days to bring payment to court to avoid foreclosure (extension vary).
- If no payment is made, a judgment will be entered and the lender can request the sale of your property.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate.
Power of Sale (Non-Judicial Foreclosure):
- The mortgage lender serves you notice demanding payment, the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.Sometimes, if the sale of the property isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank after the foreclosure sale.Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.