In recent news, the attorney generals of all the states around the country have launched joint investigations into the foreclosure proceedings by some banks. According to this article, the probe is based upon Chase and Bank of Americas halt of all their foreclosures nationwide. The problem with the foreclosures is that it has been revealed that many banks used "robosigners" or individuals who did not review actual payment histories regarding the necessary affidavits of default in foreclosures in many states. These affidavits are required for a foreclosure proceeding to go forward. In Illinois a default is required for a foreclosure lawsuit to be initiated. It appears from news reports and public records that the affidavits filed in court were not properly reviewed by the banks employees who signed the documents. Other problems that have been reported has been the failure to attach the proper mortgages regarding the property, foreclosing on the wrong property, etc.

From my experience many of the foreclosures in Illinois are properly initiated by foreclosing banks; however, it is difficult to assess whether a foreclosure is defective without hiring an attorney in the the foreclosure suit. Generally speaking, a borrower would not be aware if the banks affidavits, records etc. are what they appear to be without having an attorney review the documents or at the minimum filing an appearance in the case. In addition, most borrowers do not file an appearance in a foreclosure because the court charges an appearance fee and many feel it is a fruitless endeavor.

One of the problems that I recognize is that the foreclosure law firms are under strict guidelines to meet deadlines in order to foreclose on a property. The foreclosure firms are even graded on how fast they proceed in a foreclosure against their competitor law firms. There is an incentive to cut corners and the firm can be penalized by moving to slow or being to careful. The mortgage industry has in the past cut corners in foreclosure proceedings in order to make the process quicker and more streamlined. Failure to review affidavits and have personal knowledge of the default is just one of the many problems that have plagued the industry.

The most common issue I am seeing currently is the borrower is speaking with the mortgage company in order to obtain a loan modification and has filled out paperwork with the mortgage company while at the same time the foreclosure is going forward. While the borrower is trying to get an answer on the loan modification the foreclosure is going further and further down the process. In some instances the borrower is even in a trial period modification making a lower payment amount when the property goes for a sheriff sale. Any money that they have paid for the trial period payments goes out the door and the borrower is eventually evicted from the property. In some rare instances I will see a fully executed loan modification and the mortgage company does pull the foreclosure from the court.

It is important to note that a Chapter 13 will stop a foreclosure dead in its tracks by curing the mortgage default for up to five years and repaying any other creditors in addition to the persons mortgage. However, to save a property in Illinois a person must file a Chapter 13 before there is a sheriff sale or court appointed auction of the property. The foreclosure sale normally is 6-9 months after the initial foreclosure complaint. In addition, a Chapter 7 eliminates a persons personal liability on the mortgage and note and protects a person against any potential deficiency after the foreclosure sale. No matter what the mortgage company is telling you over the phone you should speak with an attorney once a foreclosure is started against your property.

My office has saved numerous homes from foreclosure and if you have a foreclosure suit filed against you it is imperative that you speak to a Chicago Bankruptcy Attorney as early as possible so you can go through your options regarding the foreclosure and resolving any other debts including credit cards. I want you to lose your debt and still maintain your dignity! If you have questions please call my office at 312-489-8182.

Marc