After a foreclosure auction in Illinois, foreclosed homeowners may have the chance to redeem (repurchase) their home—but you must move swiftly.
Question
In Chicago, Illinois, my wife and I own a house. My wife lost her job a few months ago, and we fell behind on our home payments. I am a stay-at-home father. The home is now under foreclosure. We like living here and want to keep the house. We’re both unemployed right now, but I’m anticipating a large inheritance shortly. Is there any possibility for us to reclaim the home if it goes into foreclosure?
Answer
Maybe. You’ll have some time before and maybe after the foreclosure auction to “redeem” your house. To redeem before the sale, you must pay off the whole loan amount plus other fees. You must pay the foreclosure selling price plus interest and charges to redeem later.
In a nutshell, below are the rules for redeeming the house, which are further discussed below:
General redemption right. You have seven months after receiving the foreclosure summons or three months after the court files a foreclosure judgment to redeem the house.
Special redemption right. If the lender (or future owner of the loan) acquires the house at the foreclosure auction and the selling price is less than the total amount you owed, you have 30 days to redeem after the court certifies the sale.
Some scenarios have a shorter redemption time. Under specific conditions, like as abandoning the residence, the court may shorten the redemption term.
When You Have the Option to Redeem Your Home Before the Foreclosure Sale
Foreclosures in Illinois are judicial, which means the lender must file a lawsuit in order to foreclose on your house. Your house will be auctioned in a foreclosure sale once the lender obtains a foreclosure judgment from a court.
In Illinois, you may redeem your house until the later of the following dates:
Seven months after you get the summons in the foreclosure case (or are served by publication if the lender is unable to serve you personally) or three months after the court issues the judgment of foreclosure. 5/15-1603(b)(1) (735 Ill. Comp. Stat. 5/15-1603(b)(1)).
The foreclosure sale may not take place until the redemption period has expired.
You must pay the amount mentioned in the judgment, including principal, interest, fees, and charges, as well as any extra expenditures incurred between the date of judgment and the date of redemption, in order to redeem. 735 Illinois Comp. Stat. 5/15-1603(d)).
When Can You Reclaim Your Illinois Home After a Foreclosure Sale?
You have a particular right to redeem for 30 days after the foreclosure sale is confirmed by the court if:
The lender (or future loan holder) buys the house at the foreclosure auction, and the selling price is less than the entire amount owed, including principle, interest, fees, and charges. 735 Illinois Comp. Stat. 5/15-1604(a)).
You must pay the foreclosure selling price plus interest and charges to reclaim your house under the unique right of redemption. (5/15-1604, 735 Ill. Comp. Stat.).
Period of Redemption for Abandoned Homes
If the court determines that you abandoned (left) the residence, the redemption period ends 30 days from the foreclosure judgment date. 5/15-1603(b)(4) (735 Ill. Comp. Stat. 5/15-1603(b)(4)).
Other Situations in Which the Redemption Period Can Be Reduced
The redemption time may also be cut short if:
The lender waives the right to a deficiency judgment if the value of the residence on the judgment date is less than 90% of the amount necessary to redeem (735 Ill. Comp. Stat. 5/15-1603(b)(3).)
In certain cases, the redemption term will be limited to 60 days from the foreclosure judgment date or the expiry of any reinstatement period, whichever comes first.
How to Restore Your Home
In Illinois, the processes for redeeming the house are complicated—you must provide a written notice of intent to redeem to the lender’s attorney that fulfills specified standards, submit a certification with the court, and satisfy specific deadlines. Consult with a local foreclosure attorney to determine the specific processes you must follow.
If at all possible, save your home before the redemption period begins.
In most circumstances, if you want to retain your house, you need act before the redemption time. This gives you additional alternatives for saving the property. You might, for example, pay off the past-due sums in order to restart (catch up on) the loan. According to Illinois law, the borrower may renew the debt for up to 90 days after being:
issued with a summons or by publication, or has otherwise surrendered to the court’s jurisdiction.
In addition, the mortgage contract may provide a time frame for reinstatement. Furthermore, many lenders enable the borrower to restart at any point prior to the sale. Call your loan servicer to find out whether you may resume the loan and what the deadline is.
Foreclosures in Illinois take a long time to complete, so you should have enough time before the sale to consider alternatives to foreclosure.
Discovering Illinois’ Redemption Statutes
In Illinois, refer to Chapter 735 (Code of Civil Procedure), Article XV of the Illinois Compiled Statutes to locate the statutes that describe your right to redeem the house.