FREQUENTLY ASKED QUESTIONS
Here are frequently asked questions that are helpful to assist homeowners in need of a short sale:
Frequently Asked Question on
Once the bank has filed a foreclosure suit, is it too late to save my home?
If I am served with Foreclosure paperwork requiring an Answer or Appearance, what should I do?
I have tried to work with my lender to prevent the Foreclosure suit from being filed. The lender has ignored my efforts. Do I have any rights or recourse because my lender has ignored my efforts?
My property is scheduled to be sold at a sheriff’s sale. Can I stop the sheriff’s sale?
I was never personally served with the Foreclosure law suit. Do I have any recourse?
Is it possible the bank made a mistake regarding the Foreclosure lawsuit?
I haven’t paid my mortgage for many months. Is there a way to determine whether a suit has been filed?
I have been served with a Notice of a Sheriff’s Sale, what does this mean and do I have to leave the home?
What is a short sale?
Can an owner profit from a short sale?
How do bankruptcies affect the possibility of doing a short sale?
What is the effect on the seller’s credit when they are approved for a short sale?
What information is required by the seller's lender to consider a short sale?
How do lenders determine what sale price to accept?
How late in the foreclosure process can you start a short sale?
Will the short sale create IRS consequences?
Will the lender make the owner legally responsible for the amount they forgive?
Will the owner have to bring any money to the closing?
Who pays the realtor's commission, attorney fee, title insurance and property tax pro-rations?
In Illinois, what happens if the owner just lets the property be foreclosed upon?
My lenders are trying to collect a deficiency judgment against me from a short sale or foreclosure, Now what?
The bad news is that some short sales don’t come with a full forgiveness of the balance owed to the lender. If your short sale was “lien release only” the lender reserved the right to sue you for the balance of the mortgage. They merely allowed you to sell the house by releasing their lien. When they released their lien, they didn’t release the balance of the mortgage. Also, some short sales required you to sign a “promissory note” to the lender for some or all of the mortgage/loan balance.
Worse yet, if you were foreclosed upon, the lender can take a “deficiency judgment” against you for the difference between your mortgage balance at the time of the foreclosure and the amount they netted after they sold the property as bank owned/REO property.
The good news is that an experienced short sale attorney can help you to negotiate these types of debts with the lenders. Since these debts are unsecured, we have had great success in reducing and resolving these matters for much lesser amounts.
The real estate purchasing process begins simply enough. After long hours of searching for the right home to buy; your real estate agent will write a contract that you will sign. This constitutes the “offer” to the Sellers. Hopefully, the Sellers accept the offer by signing the contract and inserting a date of acceptance.
No offer should be submitted without careful consideration of the attorney’s role in the transaction. Just about all “standard” real estate contracts contain “attorney approval” or “attorney modification” clauses. Significant differences exist among the approval and modification clauses in the many “standard” form real estate contracts commonly used in Northern Illinois. Some allow a buyer to easily “escape” a deal, while others can make the process much more difficult. It is an urban myth that Illinois law provides a “five day recission period” for real estate contracts. Each buyer’s contract will govern the ability of the buyer to terminate the contract. While an attorney would prefer to examine a contract prior to the submission of the offer, no offer should be submitted unless the contract at least contains an attorney approval or modification provision and the buyer understands the terms, rights, and limitations of such a clause.
The buyer’s attorney will review the contract to insure that the contract does not take advantage of the buyer as well as resolve any potential ambiguities. The attorney typically focuses on the purchase price and personal property included in the sale, the mortgage contingency clause, the inspection clause, and the clause that governs penalties for default. In addition, the lawyer will make sure that the various prorations (taxes, rents, association dues, etc.) are fair to the buyer, and that the seller has provided the required disclosures (as to the condition of the property, radon hazards, and in some cases as to the status of lead paint in the home) and warranties.
Normally, a contract will also contain the right to conduct a professional home inspection within five (5) business days of the date of acceptance. Inspection clause provisions vary from contract to contract. Some allow the buyer to request repairs be made to the property, some require that repairs exceeds a certain dollar amount and others merely allow the buyer to cancel the deal because the condition of the property is found to be unsatisfactory. The buyer’s attorney will assist the buyer in negotiating with the seller’s attorney regarding repairs.
Once the modification and inspection periods pass, the buyer’s attorney will help the buyer manage the mortgage/financing contingency. Most contracts contain a “mortgage contingency” clause, a provision which allows the buyer to lawfully cancel a transaction if the buyer cannot obtain a loan that satisfies the terms of the mortgage called for by the contract. The attorney will stay in contact with the lender to determine the conditions necessary to be satisfied to obtain the loan commitment. The attorney will also request an extension of the financing contingency if necessary.
The final tasks of a buyer’s attorney before the closing include negotiating any problems that arise during the final inspection/walkthrough, reviewing title company figures and insuring that the buyer knows everything necessary to bring to closing.
At the closing, the lender will generally email or deliver a “package” containing the loan documents to the title company. This package is comprised of many documents, including the note and mortgage and as many as sixty to one hundred pages of documents disclosures and agreements. The buyer’s attorney will review these document, point out important terms and protect the buyer’s rights against the lender.
The Seller will also come to the closing with a package of documents, including, most importantly, the deed to the property. The buyer’s attorney will scrutinize these documents to make sure that the buyer is purchasing and the seller is conveying the correct property, that all taxes and liens are paid, and that title is cleared and insured by the title company. This usually involves a review of the documents and a survey provided by the Seller. Mistakes made in this process may cause somebody else to end up owning legal title to the home just purchased by the buyer.
The services of an experienced real estate attorney greatly reduce the likelihood of problems, issues and delays and provide an experienced guide to this very long and complex process.
Most contracts used by the various real estate boards in the greater Northern Illinois area carry a five day attorney modification and approval clause. Once the attorney for the Seller receives the contract that has been signed by all parties, the attorney will conduct a thorough review. In reviewing a contract, a seller’s attorney will determine that the buyer’s earnest money is sufficient, the buyer’s mortgage terms and time frame to acquire a mortgage are realistic to ensure that the home is not off the market for too long. Additionally, the seller’s attorney will review the requested property tax prorations to confirm that the credit that the seller must give to the buyer at closing is calculated fairly.
Assuming all modifications are agreed to by the parties, the buyer will most likely conduct an inspection. The seller’s attorney will negotiate the inspection issues with the buyer’s agent or attorney keeping in mind that most contracts carry set parameters regarding inspection requests.
The next step in the process is confirming that the property is free of liens. This is accomplished by the seller’s attorney ordering a title search. The search will state if there are any liens on the property that must be cleared in order to close. An example of this could be a credit card judgment which would prevent a seller from closing unless it was paid. Other examples are requirements from municipalities such as transfer taxes and inspections and requirements of homeowner’s associations.
If required by the contract, the seller’s attorney will order a survey. The survey will disclose if there are any potential boundary issues or encroachments that need to be addressed in order to close. A common example of this is a storage shed that may be over a building line or on an easement. In most instances, the attorney for the seller can resolve this problem by working with the title underwriter so that the issue is “insured over” by the title company at closing.
The seller’s attorney will also monitor the buyer’s financing. This includes speaking to the buyer’s lender regarding any remaining conditions regarding the loan.
Once the buyer’s financing is in place and the title is clear, the attorney will prepare the various documents required to transfer title at the closing. This includes a deed, bill of sale, affidavit of title, ALTA statement, closing statement and any other various documents required. This list could include substantially more documents depending upon the nature of the transaction! It is not necessary for the seller to be present at the closing as seller’s attorney can arrange for a power of attorney and/or for all documents to be pre-signed in advance of closing.
The transaction will then be scheduled to close. At closing, the buyer’s attorney will make sure that all documents are properly executed by the seller, answer any questions or concerns of the buyer, and settle any contractual disputes or problems that arise. The buyer’s attorney will be checking the seller’s attorney’s work to determine if it accurately conveys title to the buyer.
Using an experienced real estate attorney greatly increases the likelihood of a smooth and issue free closing.
Landlords may evict tenants for various reasons including, nonpayment of rent, violations of lease terms, or for the improper possession of property after a tenancy has terminated. Eviction actions are strictly governed by the Illinois Forcible Entry and Detainer Act (735 ILCS 5/9-101).
If the tenant will not voluntarily vacate, the landlord may be forced to evict the tenant through a “forcible entry and detainer” lawsuit. Self-help is not an option for landlords in Illinois. The Forcible Entry and Detainer Act governs all eviction proceedings. If it is not strictly followed to the letter, you will not be able to successfully evict your tenant.
While landlords commonly face many issues when a good tenant goes bad; the most important issue is normally removing the tenant from the premises. This can only be accomplished by an “order for possession.” The “order for possession” is granted by the judge as a result of an action brought by the landlord for Forcible Entry and Detainer. When the order for possession is granted, the tenant is given a date that he/she must vacate the premises. If the tenant fails to vacate the premises by said date, the landlord must enlist the services of the County Sheriff to enforce the “order for possession.”
Generally speaking, judges will also enter a judgment for back rent, court costs and reasonable attorney fees concurrently with the entry of the “order for possession.” However, these items have to be requested in the appropriate manner or they won’t be granted.
Unfortunately, evictions can be lengthy. Because tenants have to be served all notices and lawsuits in the appropriate manner; delays sometimes occur due to the inability to serve the tenant. As the courts handle many evictions, getting a court date can also cause delays. If the tenant contests the eviction and/or requests a trial, more time will elapse until the matter can be resolved.
As evictions are procedurally intensive; they shouldn’t be undertaken by anybody not intimately familiar with the statute. Attempting to pursue an Illinois eviction matter without an attorney could lead to your case being dismissed and for you having to reinitiate the entire process from square one.
While we recognize that many tenants have legitimate disputes with their landlords; our evictions practice is strictly limited to the representation of landlords.
An experienced evictions attorney can make the eviction process smoother and hopefully, less frustrating.
Here are frequently asked questions that are helpful to assist homeowners facing foreclosure: