Illinois had one of the highest foreclosure rates in 2012
Despite that fact that the nation as a whole experienced a 3 percent drop
in foreclosures last year, Illinois saw its foreclosure activity spike
a whopping 33 percent in 2012 when compared to 2011, according to a recent
report by RealtyTrac, an online foreclosure tracking organization.
In fact, 2.58 percent of all Illinois homes received a foreclosure filing
in 2012 - giving it the fifth highest rate in the entire United States.
Also, there were 135,858 homes that were bank-owned or at some point in the
foreclosure process at the end of the year.
In Cook County alone, 70,233 homes received a foreclosure filing in 2012
- with DuPage County properties receiving 10,443, Lake County with 10,555
and Will County properties receiving 9,591 foreclosure filings.
Given that Illinois is a judicial foreclosure state - meaning foreclosures
have to go through the local court system - a foreclosure currently takes
697 days to complete. Interestingly, 20 of 25 states that experienced
an increase in foreclosure activity in 2012 were judicial foreclosure states.
Options when facing foreclosure in Chicago
Homeowners in Chicago - or throughout Illinois - facing foreclosure need
to know that several options exist. For example, a Chapter 13 bankruptcy
may be a viable choice if the goal is to save the home.
However, if the homeowner is more concerned with simply protecting credit
and unloading the home without any continued liability, an option such as a
deed in lieu of foreclosure may be a better choice.
Generally, a deed in lieu of foreclosure (DILF) is when the a bank and
a homeowner agree that the bank will accept the deed to the home in exchange
for the bank not foreclosing, meaning that no formal foreclosure actually
occurs; this helps preserve a homeowner's credit score. A DILF also
protects the homeowner from deficiency judgments, which would otherwise
occur if the bank sold the home at a foreclosure sale for less than what
the homeowner still owned on the mortgage.
For instance, picture a couple that bought a home in 2006 for $750,000.
The couple - Blake and Crystal - obtain a $600,000 mortgage on the property
at the time of purchase. Unfortunately, the value of Blake and Crystal's
home drops dramatically during the housing market crash until it is only
valued at $400,000 in 2013, but, they still owe over $450,000 on their
initial mortgage - meaning their home is severely underwater.
Making matter worse, Blake and Crystal fall upon hard economic times and
find that their mortgage payment is now unsustainable. If the couple can
convince their bank to agree to a DILF, they will no longer be responsible
for the $450,000 mortgage, not to mention that the bank will not be able
to pursue them for a deficiency judgment if the bank ends up selling the
home for less than $450,000.
A DILF is simply one option that homeowners facing foreclosure may take
advantage of, but each situation may have a different ideal alternative.
Accordingly, if you are currently facing foreclosure, it is advisable
to speak with an experienced foreclosure defense attorney to discover
with your options may be given your circumstances.