Illinois is still suffering from the worst housing market crisis in history;
in fact, areas of Chicago are still experiencing a record number of
foreclosures. Many homeowners feel helpless and trapped as they struggle to make mortgage
payments - while banks seem as if they can't process foreclosures
fast enough. However, not all is lost for Illinois homeowners, as they
possess something known as the "right to redemption." This ability
to redeem real estate subject to foreclosure can even be exercised after
a bank has obtained a foreclosure judgment against them.
Right to Redemption
Under Illinois' statutory right of redemption, only the owner can exercise
the right to redeem. Moreover, the amount required to redeem can include
not only the principal and interest owed on a mortgage, but also the costs
associated with collection, attorney's fee, court costs and additional
per diem interest.
Unfortunately for homeowners, the right to redemption cannot be enforced
following the judicial sale of the property. Consequently, under Illinois
law the right of redemption can generally be exercised during the following periods:
- When the property subject to foreclosure is residential real estate, the
borrower may redeem the property within seven months of being served with
summons or by publication, or within three months after the date of entry
of judgment of foreclosure, whichever is later.
- When the property subject to foreclosure is NOT residential real estate,
the borrower may redeem the property within six months of being served
with summons or by publication, or within three months after the date
of entry of judgment of foreclosure, whichever is later.
However, the redemption period can be shortened in the following circumstances:
- When the value of the real estate on the date of judgment is less than
90 percent of the amount required to redeem AND the lender waives any
and all rights to a deficiency judgment against the borrower, the redemption
period will be shortened to 60 days after the date of judgment of foreclosure
or the expiration of any reinstatement period, whichever is later.
- When the court deems a property abandoned, the redemption period expires
30 days after the date of judgment for foreclosure.
Under Illinois law, this right of redemption is guaranteed for residential
properties - if fact, statutory language states that any attempt to waive
this right for residential properties is void. However, this same restriction
is not available for commercial properties, and often commercial mortgages
contain an expressed provision that does waive redemption rights.
A property owner - regardless of whether they own residential or commercial
real estate - needs to be vigilant in protecting their property rights
during foreclosure proceedings. An experienced foreclosure attorney in
Chicago can help navigate Illinois' complex foreclosure laws and advise
you of your rights and options.