Helping clients with mortgage foreclosure Lawyer Manual

General foreclosure process

Illinois is a judicial foreclosure state. That means the foreclosure process occurs in court. In Illinois, the foreclosure process is governed by the Illinois Mortgage Foreclosure Law (IMFL), 735 ILCS 5/15–1101 seq. The IMFL provides the exclusive method for foreclosing on all mortgages.

The IMFL also governs real estate installment contracts, commonly referred to as “contracts-for-deed” if:

• The contract was entered into after July 1, 1987;
• The contract is more than 5 years in length; and
• The remaining amount owed is less than 80% of the original purchase price. 735 ILCS 5/15-1106; 735 ILCS 5/15-1207

In Illinois, typically, the entire foreclosure process takes approximately 9 months. If the foreclosed property is not “residential” or is “abandoned,” the process can be shortened substantially. A valid legal defense in court may defeat the foreclosure action. Even if a valid legal defense does not defeat the foreclosure action, it may still greatly prolong the foreclosure process.

Why it matters: The foreclosure process can have substantial consequences for homeowners and their communities. As a result of foreclosure, homeowners obviously risk losing their homes, including any accumulated equity, but also risk a personal judgmentagainst them for the remaining debt. Because a foreclosure appears on credit reports, homeowners may also risk the loss of future credit.