What is Foreclosure? What is Pre-Foreclosure? What Can I Expect From the Process?

After the financial crisis and housing market crash we have all become familiar with the term “foreclosure.” However, it can be helpful to have a clear understanding of the term because confusion still exists, largely in part due to the use of the term “pre-foreclosure.”

Many people who are in the process of foreclosure do not understand that they are in foreclosure because certain websites list their property’s status as in pre-foreclosure.

Pre-foreclosure is understood to mean the state in which the foreclosing entity (Bank) has begun the legal process of foreclosure, but the property is still legally owned by the homeowner.

Contrast that with foreclosure, which is a more generalized term meaning that the bank is in the process of taking possession of a homeowner’s property (usually through a legal proceeding).

For 99% of people, the terms mean the same thing. The term pre-foreclosure trips people up because it seems less bad than foreclosure. But do not be confused by it. If your property is listed in pre-foreclosure on websites, you are in foreclosure.

What Can I, the Homeowner, Expect From the Process?

The first event that occurs will be the Bank notifying the homeowner that the homeowner has missed mortgage payments, and if the homeowner does not make those missed payments, the Bank will file the foreclosure. When those payments are not made, the Bank files its Complaint, and attempts to serve the homeowner. If successful, this entails a person coming to the homeowner’s residence, ringing the doorbell, asking a few questions, and handing the homeowner the Summons and Complaint. If the Bank makes multiple attempts but is unable to locate or speak with the homeowner, the Bank serves notice of the lawsuit via publication, meaning that it will run an advertisement in the local newspaper telling the public generally that this property is being foreclosed. Once that is set, the Bank will proceed with foreclosure.

In Northern Illinois (Cook County, Lake County, DuPage County, McHenry County, Kane County, Kendall County, Will County) the process can take awhile. The reason for this is twofold. First, there are still many foreclosures taking place in this region and the Courts have a backlog. The amount of foreclosures are down over prior years, but there is still an enduring stream of new foreclosures occurring. The second reason, which extends to all of Illinois, is that Illinois has some good homeowner protections in place that prevents banks from running as many foreclosures through as they like.

On average, homeowners in foreclosure who do not participate in their case, and who have not abandoned their property, can expect the foreclosure process to complete within 5 to 8 months. This means that a homeowner can literally do nothing, and still stay in the property for a considerable amount of time without making payments (theoretically, a good legal defense by an experienced attorney can extend this time tremendously, and more importantly, can result in the Court denying the bank’s foreclosure lawsuit altogether).

The foreclosure will generally conclude with a “Confirmation Hearing” a/k/a “Motion for Order Approving Sale (OAS),” which is a hearing held after a foreclosure auction where the Court verifies that the foreclosure auction was held in accordance with the law. This is really the final judgment on the merits of the case, and can be appealed to the Appellate Court within 30 days. The Court will provide the homeowner at minimum 30 days to leave the property before the Sheriffs come and evict. This amount may be extended at the Court’s discretion.

What Should I do if I am in Foreclosure?

If your property is being foreclosed upon, you have many options available. It is best to speak with a foreclosure defense attorney such as the Libertyville and Gurnee attorneys at Johnston Tomei Lenczycki & Goldberg LLC today at (847) 549-0600. We will review your particular situation and propose alternative courses of action to make sure you are aware of all of your options and choose the one that will be best for your future. Call a Lake County foreclosure defense attorney today at (847) 549-0600 to save your home.