If I lose my home to foreclosure in Illinois, can I get it back?

Question

My wife and I own a home in Chicago, Illinois. A few months ago my wife lost her job and we fell behind in our mortgage payments. I'm a stay-at-home dad. The house is now in foreclosure. We love living here and would like to hold on to the house. Neither of us is currently working, but I'm expecting a big inheritance soon. Is there any way for us to get the house back if we lose it to foreclosure?

Answer

Maybe. You'll get some time before the foreclosure sale, and perhaps after, to "redeem" your home. To redeem before the sale, you'll have to pay off the full amount of the loan, plus various costs. To redeem afterwards, you'll have to pay the foreclosure sale price plus interest and costs.

In a nutshell, here are the rules for redeeming the home, which are explained in more detail below:

• General right to redeem. You can redeem the home up until seven months after you receive the foreclosure summons or three months after the court enters a judgment of foreclosure, whichever is later.
• Special right of redemption. If the lender (or subsequent owner of the loan) purchases the home at the foreclosure sale and the sale price was less than the total amount you owed, then you have 30 days after the court confirms the sale to redeem.
• Reduced redemption period for some situations. The court can reduce the redemption period under certain circumstances, such as if you abandon the home.

When You Can Redeem Your Home Before the Foreclosure Sale

Illinois foreclosures are judicial, which means the lender must file a lawsuit in court to foreclose your home. After the lender gets a judgment for foreclosure from the judge, your home will be sold at a foreclosure sale.

In Illinois, you can redeem your home until the later of:

• seven months after you receive the summons of the foreclosure action (or are served by publication if the lender is unable to serve you the foreclosure papers personally) or
• three months after the date that the court enters the judgment of foreclosure. (735 Ill. Comp. Stat. 5/15-1603(b)(1)).

The foreclosure sale may not be held until after this redemption period expires.

To redeem, you must pay the amount specified in the judgment, including principal, interest, fees, and costs, plus any additional expenses incurred between the date of judgment and the date of redemption. (735 Ill. Comp. Stat. 5/15-1603(d)).

When You Can Get Your Home Back After a Foreclosure Sale in Illinois

You get a special right to redeem for 30 days after the court confirms the foreclosure sale if:

• the lender (or subsequent loan holder) purchases the home at the foreclosure sale, and
• the sale price was less than the total amount you owe, including principal, interest, fees, and costs. (735 Ill. Comp. Stat. 5/15-1604(a)).

To get your home back through the special right of redemption, you'll have to pay the foreclosure sale price plus interest and costs. (735 Ill. Comp. Stat. 5/15-1604).

Redemption Period for Abandoned Homes

If the court finds that you abandoned the home (left it), the redemption period expires 30 days after the foreclosure judgment date. (735 Ill. Comp. Stat. 5/15-1603(b)(4)).

Other Circumstances When the Redemption Period Can Be Shortened

The redemption period can also be shortened if:

• the value of the home on the judgment date is less than 90% of the amount required to redeem, and
• the lender waives the right to a deficiency judgment. (735 Ill. Comp. Stat. 5/15-1603(b)(3).)

Under these circumstances, the redemption period will be reduced to 60 days after the foreclosure judgment date, or the expiration of any reinstatement period, whichever is later.

How to Redeem Your Home

The procedures for redeeming the home in Illinois are complicated—you'll have to give a written notice of intent to redeem to the lender's attorney that meets specific requirements, file a certification with the court, and you'll have to meet certain deadlines. Talk to a local foreclosure attorney to find out the exact procedures you must follow.

If Possible, Don't Wait Until the Redemption Period to Save Your Home

In most cases if you want to keep your home, it is better to take action before the redemption period. This will give you more options to save the property. For example, you could pay off the past-due amounts to reinstate (catch up on) the loan. Illinois law says that the borrower may reinstate the loan up to 90 days after the borrower has been:

• served with a summons or by publication, or
• has otherwise submitted to the jurisdiction of the court.

Also, the mortgage contract might give you a certain amount of time to reinstate. Also, as a practical matter, many lenders allow the borrower to reinstate at any time prior to the sale. To find out if you can reinstate the loan and the deadline to do so, call your loan servicer.

Foreclosures in Illinois take a long time to complete so you should have sufficient time to explore alternatives to foreclosure before the sale.

Finding Illinois' Redemption Laws

To find the statutes that discuss your right to redeem the home in Illinois, go to Chapter 735 (Code of Civil Procedure), Article XV, of the Illinois Compiled Statutes.