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Foreclosure Defense

All You Need to Know About the Foreclosure Process in Texas and Illinois

By May 2, 2022No Comments

Homeowners facing foreclosure are often unaware of their legal rights and worry about the long-term consequences of the event. While the prospect of foreclosure comes with inevitable uncertainty, it does not necessarily mean there are no effective relief solutions you can use to go out of the situation.

Different states have different rules, policies, and procedures for foreclosures. An in-depth understanding of how the foreclosure process works can help eliminate some of this uncertainty. Here is all you need to know about the foreclosure process in Texas and Illinois.

The Foreclosure Process in Texas

In the past, the Texas foreclosure process used to favor the lender. However, the foreclosure crisis of 2010 triggered several changes in the Federal and State laws. Today, most laws protect homeowners and offer several relief options to help them navigate the situation.

Since Texas is a non-judicial foreclosure state, lenders have the right to start foreclosure without going to the court if the deed of trust contains a “safe clause.”

Foreclosures are a three-step process in Texas. The entire foreclosure process in Texas can take place in just 41 days, and the commissioner’s office typically designates the location for the process.

However, if the lender has no deed of trust, a court order is vital to carry out the foreclosure sale. This is called a “quasi-judicial” foreclosure process.

Even if you face foreclosure in Texas, you do not have to move out on the sale date. Homeowners will get an eviction notice allowing them three days to vacate in case of eviction.

  1. First, the lender sends you a “demand letter” or “Notice of Default,” giving you 20 days (or 30 days in specific cases) to pay off the loan or get current on loan.
  2. The homeowner receives the “Notice of Sale” at least 21 days before the date of sale. The notice is posted, mailed, and filed. Note that ignorance of the message or failure to collect it will not stop the sale.
  3. The actual foreclosure sale will occur at the county courthouse if you do not control the foreclosure. It is held on the first Tuesday of every month. Interested parties will bid on your property, and the highest bidder wins.

Rights Available to People Facing Foreclosure in Texas

If you face foreclosure in Texas, you will have access to the following rights:

  1. The right to receive foreclosure notices, the preforeclosure breach letter, and information (the lender is required to send you two notifications)
  2. Pay off the loan or get current on the loan to stop the foreclosure sale
  3. The right to file for bankruptcy to avoid foreclosure
  4. The right to apply for loss mitigation options like loan modification, repayment plans, and forbearance
  5. The right to receive any excess money after the foreclosure sale

Foreclosure Process in Illinois

Unlike Texas, Illinois is a judicial foreclosure state. Lenders in the state can initiate foreclosure proceedings if you have been a delinquent for 120 days or more. The court has control over all foreclosure proceedings.

Since Illinois is a judicial state, the suit has to be filed and notified to the homeowner and all possible property tenants. It should also be served on anyone who has any lien on the property. The Illinois foreclosure process involves the following steps.

  1. Your loan is typically considered “in default” if you fall behind by 90 days. If you are delinquent by 120 days, your lender can start with the foreclosure.
  2. Your lender will notify you of the perspective foreclosure through breach letters or demand letters. This notice or letter typically gives you a deadline by which you should resolve the issue.
  3. Once you receive the complaint or summons, you have 30 days to respond to it. Failure to respond to the notice will give more power to the lender.
  4. The property is typically sold to the highest bidder or the lender. The actual foreclosure will take place in court. However, Illinois law demands that the homeowner be notified at least ten days before the sale.

How to Stop Foreclosure in Illinois

There are a few ways in which you can stop foreclosure. They include:

  1. Illinois borrowers have the right to reinstate the loan by up 90 days after receiving the summons.
  2. Borrowers can repay the principal and interest during the redeeming period to reclaim the property. Borrowers even have to right to redeem the loan 30 days after the sale date is confirmed. The foreclosure proceedings cannot be initiated till the redeeming period is over.
  3. Filing for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy is another effective way to stop foreclosure. The proceedings go into “automatic stay” when you file for bankruptcy.

What to Do if You Face Foreclosure in Texas or Illinois

Evaluate the Situation

Regaining your home from a foreclosure involves winning against the lender or highest bidder for your property. Thus it’s essential to have clarity of what you’re up against. Read all foreclosure-related mail and notices you’ve received. Go through the information in detail and keep track of important dates, figures, and other vital data.

Seek Immediate Legal Help

If you face foreclosure, the best thing to do is to seek immediate legal help. An expert lawyer can guide you through the legal process and help you gain awareness of relief options. Your lawyer can also help you discuss loss mitigation options with your lender.

For instance, Texas homeowners can ask for a loss mitigation application packet. If you apply for this at least 37 days before the sale date, the lender should put all foreclosure activities on hold. If the lender goes forth with the foreclosure process, you have the right to file a suit to stop it. Non-experts may not be able to grasp the concepts accurately and can benefit significantly from expert legal advice.

Our legal experts at Vilt Law, P.C can help you here. Whether you are facing a foreclosure or lost your home in a foreclosure sale, we can help you take action. Visit our website for more information.

Note: The firm doesn’t advocate filing for bankruptcy and our process allows you to keep your home without filing bankruptcy.