In response to the ongoing foreclosure crisis in this country, two counties in Illinois -- Cook County and Will County -- have have implemented mediation programs to assist borrowers in finding ways to avoid foreclosure. Read on to learn more about these two county mediation programs, how the mediation programs work, and how you can benefit from the process.
(To learn about other options for dealing with foreclosure, visit Nolo's Foreclosure section.)
What is Foreclosure Mediation?
Foreclosure mediation is a process that is used to help homeowners avoid foreclosure by coming up with an alternate solution that benefits both the borrowers and the lender. Mediation consists of a meeting between:
- the borrowers
- their lender, and
- an impartial third-party (the mediator).
At the meeting, the parties discuss the borrower's financial situation and try to negotiate a way for the homeowner to keep the home or give up the property without going through a foreclosure. By working together, the parties are often able to reach an agreement.
Potential outcomes of mediation include (often called loss mitigation options):
- loan modification
- forbearance agreement
- short sale, or
- deed in lieu of foreclosure.
(To get information about each of these options, see our Alternatives to Foreclosure area.)
How Foreclosure Works in Illinois
In Illinois, foreclosures are judicial, which means the lender must foreclose through the state court system. The lender initiates the foreclosure by filing a complaint (sometimes called a petition) and having it served on the borrower, along with a summons to appear in court. To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see Will Your Foreclosure Take Place In or Out of Court?
To learn about the specific foreclosure laws in Illinois, see Summary of Illinois' Foreclosure Laws.
County Foreclosure Mediation Programs in Illinois
If you have received a foreclosure summons in Illinois, there are two counties that have mediation programs: Cook County and Will County.
Cook County Foreclosure Mediation
Cook County’s mediation program gives homeowners who have received a foreclosure summons access to housing counseling and legal assistance to explore ways to keep their home or negotiate a better way to give up the property.
Eligibility for Cook County Foreclosure Mediation
To participate in the mediation program, homeowners must:
- reside in Cook County
- have received a foreclosure summons from the Circuit Court of Cook County, and
- occupy the property that is being foreclosed on (the property can be a single-family home, single-family condominium, or an apartment building with four or fewer units).
Starting the Mediation Process
If you have received a foreclosure summons, you can schedule a free meeting with a housing counselor (the first step in the mediation process, which is then followed by a consultation with an attorney) by calling a toll-free help line at 877-895-2444 (312-836-5222 TDD) or by filling out an online appointment request form. There is no charge to participate in the Cook County mediation program.
If you are have not yet received a summons, but are in danger of foreclosure, you can go to www.regionalhopi.org/help to help identify available options to avoid foreclosure.
Will County Foreclosure Mediation
Homeowners in Will County who have been served a foreclosure summons receive a form explaining the mediation program along with the summons.
Eligibility for Will County Foreclosure Mediation
Anyone receiving a foreclosure summons for a residential mortgage foreclosure filed in the Will County Circuit Court after August 1, 2010 may participate in the program. Commercial foreclosures are not eligible.
The mediation program is free of charge for the borrowers. (An additional $150 fee is charged to the lender for every foreclosure filed in the county to cover the costs of the program.)
Starting the Mediation Process in Will County
Along with the foreclosure summons, borrowers are automatically given a pre-mediation meeting date and a financial questionnaire. The meeting is typically scheduled between 42-60 days from the date that the foreclosure case is filed with the court. On the given date, you must go to the location provided. Mediation participants will wait in a room until the mediator calls their case.
If you cannot attend the pre-mediation meeting, there is no procedure for rescheduling the meeting. If you do not show up for the meeting, the court will be notified and the foreclosure will proceed. If you want to reschedule your mediation at that time, you must request permission from the court, which has the discretion to allow or deny the request.
Documents Required for the Meeting
At the meeting, the mediator makes an initial assessment of your case based on your responses in the questionnaire. In addition to bringing the completed financial questionnaire, it would also be a good idea to bring supporting financial documentation such as:
- most recent tax return
- current bank statements, if available, and
- most recent W-2 and paystub (if employed).
If a loan modification or other loss mitigation solution appears possible, the mediator will schedule a full mediation conference. A representative of the lender must appear in person at the mediation conference to evaluate the borrowers for a solution to keep the home (such as a loan modification) or other loss mitigation solution to give up the property (such as a deed in lieu of foreclosure or a consent judgment waiving any deficiency judgment against the borrowers).
The Will County program’s goal is to complete the mediation process within three months. However, the process may take longer depending on the number of foreclosures being filed and how many parties elect to participate in the program.
Should You Participate in the Foreclosure Mediation Programs?
Even though participating in the Cook County or Will County foreclosure mediation program does not guarantee that you can avoid foreclosure, it doesn't hurt to participate in the programs. No court action will be taken against you while the mediation process is ongoing and the lender may be more likely to agree to a nonforeclosure solution at a mediation than if you approach it outside of the program. Or you might qualify for a loss mitigation option that you hadn’t previously considered.