Foreclosure Rates Drop, But Empty Chicago Homes Remain

According to recent data, foreclosure rates are dropping nationwide. Despite this news, the time it takes for a property to be foreclosed upon and then clear the market is taking longer. According to a recent Chicago Sun-Times article, the longest foreclosure process in the country takes place in Chicago, where it takes almost 2 ½ years from initial filing of a foreclosure through the auction of the home. Part of the reason for the delay, the article notes, is the large backlog of foreclosure cases still going through the Illinois court system.

Foreclosure Defense

The law allows for several strategies to defend against foreclosure. One strategy involves seeking an alternative to the foreclosure process. Some alternatives to foreclosure include deed in lieu of foreclosure, short sales, and loan modifications. Each case is different and, therefore, an experienced and aggressive foreclosure defense attorney should be retained. Don’t take the risk of trying to protect your home without qualified assistance. If you or someone you know is facing foreclosure, contact an experienced Illinois foreclosure defense attorney right away.

Another strategy involves finding out whether or not you’ve been a victim of fraud. During the economic recession, thousands upon thousands of homeowners in America lost their properties to banks and service companies who were “robo-signing” foreclosures. Due to a prevalence of individuals with little to no training in the field, documents were rushed through the foreclosure process with false signatures, inaccurate information, and minimal (if any) document review.

Still, another strategy used in foreclosure defense is challenging the bank’s right to retake ownership of the property. Before a lender can foreclose on a residence, they must be in possession of certain items relating to the loan. Specifically, the bank must present the original note to the court. Because of the mortgage-backed securities market, many loans were sliced into multiple parts and resold to third parties as investment opportunities. As a result, many notes were separated from the actual loans.

We Are Here to Help

An experienced Illinois foreclosure defense attorney can provide a homeowner with legal advice on rights and obligations relating to the property at issue and find options still available under the law. Contact the Law Offices of Gilbert C. Schumm for help with foreclosure defense. Our firm services clients in Arlington Heights, Mt. Prospect, Hoffman Estates, and Hanover Park areas. With over 35 years of experience, our firm’s attorneys will be adamant in protecting your rights during the foreclosure process. Contact (847) 559-9109 to schedule your initial consultation.

Hanover Park Real Estate: Types of Property Deeds and How They Differ

All real estate transactions for the purchase or sale of property require a conveyance of title, which is facilitated through the valid execution of a deed. A deed is a legal document that transfers some property right in real estate. Three major types of deeds are often used in real estate transactions to convey title, or ownership of the property, although other types of deeds exist. Those commonly used in real estate contracts include the general warranty deed, special warranty deed, and quitclaim deed. Each deed contains some or all of the covenants, or promises, connected with the subject real estate, which are passed from the previous owner (grantor) to the new owner (grantee) of the property.

Deed Covenants

There are covenants, or warranties, that a grantor /seller may convey to a grantee/buyer in a real estate transaction, depending on the type of deed that is used to transfer title. A grantor who conveys property is legally bound by the warranties of title, whether expressly written on the deed or implied by law, and a buyer may have recourse if a breach occurs.

• Covenant of seisin – a grantor warrants having possession (seisin) of the property and, therefore, has the legal right to convey the real estate to another.
• Covenant against encumbrances – a grantor warrants the real estate, unless specifically stated otherwise in the deed, is free of any liens or encumbrances.
• Covenant of conveyance – this is a promise by the grantor that he or she has the right to convey, or transfer, the title property.
• Further assurances – a grantor promises to deliver any and all documents or instruments necessary to convey good title.
• Covenant of quiet enjoyment – the grantor promises to protect the grantee in the event a disturbance occurs with the buyer’s right to possess or use the property.
• Covenant of warranty – this promise is a covenant not only to defend the grantee’s mere right of possession to the land, but also the land itself and the estate within it.

General Warranty Deed

A general warranty deed is the highest caliber of deeds a buyer can receive because it contains all of the present and future covenants. Even more, the covenants contained in a general warranty deed cover not only the period during which the present seller held title to the property, but these covenants go back to the origin of the property itself. Consequently, the present seller would be liable for any defects in title before and through owners of the property.

Special Warranty Deed

The second best type of deed a buyer can receive, a special warranty deed contains the covenant of seisin and the covenant against encumbrances. The main difference between a general and a special warranty deed is that in the latter the seller only warrants against any acts or omissions that occurred while holding title. In other words, no issues in the title are warranted against prior to the seller taking ownership of the property.

Quitclaim Deed

Offering the least protection for the buyer, a quitclaim deed only conveys the rights and interest the grantor has in the property and nothing else. No warranties or covenants are provided to the buyer and, as a result, the seller is not liable for any issues that may arise regarding title. More often than not, quit claim deeds are used to cure defects in title and can be seen in property transfers between family members.

Contact a Hanover Park Real Estate Attorney

The purchase and/or sale of real estate is an important decision and often one of the largest transactions in one’s lifetime. As such, both the buyer’s and seller’s interest should be protected during all stages of a transaction. If you or someone you know is interested in purchasing property, contact a Hanover Park real estate attorney today to learn about rights and obligations associated with real property. The Law Offices of Gilbert C. Schumm has provided legal advice to clients regarding real estate for over 35 years and services the areas of greater Chicago including Hanover Park, Mt. Prospect, Arlington Heights and Roselle, among others. Call (847) 559-9109 today to schedule your initial consultation.

Elk Grove Village Foreclosure Defense: Does the Lender Have Standing to Sue?

According to recent foreclosure statistics, 1 in every 747 homes in the state of Illinois is undergoing foreclosure. Although a notice of foreclosure from a lender may seem like all hope is lost, there are legitimate legal defenses to a foreclosure. If you or someone you know is facing the possibility of losing a home, contact a Chicago foreclosure defense attorney today to assert your legal rights and intervene on your behalf.

Lack of Standing

A defendant attorney’s first line of defense when a client is facing the loss of a home is to challenge the lender’s right to foreclose, known in the legal field as “lack of standing.” One of the most often asserted affirmative defenses in foreclosure litigation, the legal doctrine of standing requires the party bringing suit in court to have an interest in the case or controversy. As a result, standing only permits those with an injury in fact and a legally cognizable interest – in other words, a real interest in the outcome of the case – to file a claim. In foreclosure cases, the debate between parties regarding standing revolves around whether or not the plaintiff had sufficient interest in the mortgage and note in order to initiate a lawsuit.

As a result of the mortgage backed securities dealings that occurred during our nation’s housing boom, many home loans were divided, sold, and resold by the original lending institution to other financial organizations. In order to establish standing, a plaintiff in a foreclosure proceeding must prove that it is the proper holder of the note and mortgage, which can be shown by producing the original note and mortgage. If a borrower’s mortgage loan has changed ownership since the original purchase of the home, it is more likely than not that the third party does not have the original note and/or other documentation required to prove a full and proper transfer of interest.

Burden of Proof and Timing

The burden of proof to establish that the plaintiff in a foreclosure case lacks standing to bring the suit is placed on the defendant, according to cases decided by the Illinois Supreme Court .  Moreover, the statutory form complaint used by foreclosure plaintiffs complies with Section 1504(a) of the Illinois Mortgage Foreclosure Law (IMFL) and, as such, contains all of the necessary allegations to establish standing. That being said, the Illinois Supreme Court ruled that lack of standing is an affirmative defense which means that a successful challenge to standing results in a dismissal of the case.

In addition to proving lack of standing, a foreclosure defendant must assert lack of standing and other affirmative defenses within a certain time frame during the proceeding or forfeit the ability to raise them later. In foreclosure litigation, the point in time in which a waiver of affirmative defenses by a defendant occurs is the entry of a judgment of foreclosure and sale, which occurs at the end of the proceedings.

Foreclosure Defense in Elk Grove Village

Buying a home is a large financial decision and, sometimes, life can get in the way of keeping up with mortgage payments. If you or someone you know is facing foreclosure, contact an Elk Grove Village foreclosure defense attorney today for assistance with defending your home.  A skilled and experienced foreclosure attorney can advise you about the rights and obligations associated with property ownership in Illinois. The Law Office of Gilbert C. Schumm has provided legal advice to clients regarding real estate for many years, servicing the greater Chicago areas including Elk Grove Village, Hanover Park, Hoffman Estates, Mt. Prospect and Rolling Meadows. Call (847) 559-9109 today to schedule your initial consultation.

The Impact of Foreclosure on Chicago Area Renters

Thanks to an Illinois law passed last fall by Governor Quinn, tenants residing in an Illinois home that is undergoing foreclosure can have more time to make a move. If you are a renter in Rolling Meadows whose landlord is facing the loss of a home, it is important to know your rights under state law.

How Foreclosure Works

Illinois is one of 22 states that requires judicial foreclosures, which means a lender must go through the state court system and its judicial process in order to foreclose on a property and obtain relief on the debt owed. A lender initiates the proceeding by filing a complaint to foreclose on the property laying out the claims of the suit. The complaint will describe the promissory note, mortgage, default, amount due on the loan, property to be foreclosed, and the defendants, along with whatever interest they hold in the property. The complaint may also seek a deficiency judgment that allows the lender to file a separate suit against the borrower after the foreclosure if the proceeds at the sale do not fully cover the total debt owed. In addition to filing the complaint with the court, the lender will properly and effectively serve the complaint and a summons to appear in court on the defendants. The lender also files a lis pendens in the county records providing notice to the borrower - as well as the public - that a suit is underway relating to the property.

How Illinois Law Protects Renters

In August of 2013, Illinois Governor Pat Quinn signed a new state law protecting renters living in foreclosed properties, Senate Bill 56 (SB 56), requiring those who acquire real estate through the foreclosure process to honor existing leases through the end of their term or provide sufficient notice allowing the tenants to find new living accommodations. In particular, in a foreclosure a landlord may terminate a bona fide lease that was in effect prior to the sale only if: 1) in the case of a month-to-month or week-to-week lease, with no less than 90 days’ written notice; or 2) at the end of the term of the lease, with no less than 90 days’ written notice. If the buyer intends for the home to be the primary residence, then the lease can be terminated with 90 days’ written notice and the new owner is not required to honor the lease through the end of the term.

A bona fide lease is a residential lease that includes all of the following elements:

1.         The borrower is not the tenant under the lease, nor is the borrower’s child, spouse or parent the tenant. If the child, spouse or parent of the borrower is a tenant, it may be proven by a preponderance of the evidence that a bona fide lease exists;

2.         The rental amount stipulated in the lease is not substantially lower than the fair market value of comparable rentals or it is reduced because of local, state or federal subsidies;

3.         The lease was entered into before the date of the lis pendens, or after the date of lis pendens but before the date of the judicial sale of foreclosure and the lease term is for one year or less;

4.         The lease was the result of an arms-length transaction, which means there was no special relationship between the parties and the agreement was made freely and independently.

Law Offices of Gilbert C. Schumm

If you are considering purchasing a home that is in foreclosure or are renting a home facing foreclosure proceedings, contact an Illinois foreclosure attorney today to learn about your rights and obligations. Don’t navigate this complex process alone. With over 35 years of experience fighting for clients’ rights, the Law Offices of Gilbert C. Schumm can provide real estate advice, and serves the Chicago area including Rolling Meadows, Des Plaines, and Streamwood.  

Insights from a Chicago Loan Modification Lawyer

Loan Modification in the Schaumburg Area

New rules recently took effect that change how home mortgages are serviced and modified. These new rules can help mortgage holders whose homes have dropped below the outstanding loan amount or who are no longer able to afford monthly payments under their current mortgage.  The new rules, issued by the federal Consumer Financial Protection Bureau (CFPB), took effect on January 10, 2014, and provide several new protections for mortgage holders who are having trouble making their mortgage payments.

Notification of Workout Options If You are Having Trouble Making Payments

Under the new rules, if you have missed a payment, your mortgage servicer must try to contact you within 36 days after the payment was due and talk to you about why payments are late or missing.

Within 45 days of a missed payment, your mortgage servicer must notify you in writing about mortgage workout options that may be available to you. Once your payment is 45 days late, your mortgage servicer must assign personnel to help you determine your options, but personnel can be assigned sooner if you request help.

You Can Request Foreclosure Prevention Options From Your Mortgage Servicer

If you are having trouble paying your mortgage, you can request information about how to apply for mortgage protection assistance from your mortgage servicer.

Mortgage protection assistance involves filling out a loss mitigation application. Additional documents and information will be required to establish your precise financial situation. It is important to return the application and supporting documents to the mortgage servicer by the date specified in order to get the most protection available under the new federal rules.  The mortgage servicer uses the loss mitigation application to make a list of your foreclosure prevention options. These may include:

- Temporarily suspending or reducing your payments (forbearance);

- Permanently changing your loan terms to an amount you can afford (modification); or

- Allowing you to leave your home without repaying the full amount you owe (short sale or other foreclosure alternatives).

The mortgage servicer must evaluate your eligibility for all of these foreclosure prevention options as long as your completed loss mitigation application was received by the mortgage servicer at least 37 days before any scheduled foreclosure sale.

Generally, within 30 days of receiving a completed application, the mortgage servicer must inform you in writing of your foreclosure prevention options. It also must tell you which options, if any, you did not qualify for and why you did not qualify for the option(s).

Two Options After Receiving Foreclosure Mitigation Options

1.    Accept Or Reject The Foreclosure Prevention Offer

The time for accepting or rejecting a foreclosure prevention offer depends on how far before the foreclosure sale it was submitted. For example, if you submitted a completed mortgage assistance application at least 90 days before a scheduled foreclosure sale, you have 14 days to accept or reject the foreclosure prevention offer. If you submitted the application at least 37 days prior to a scheduled sale, you have 7 days to accept or reject the offer.

2.    Appeal the Offer

If the mortgage servicer denies your loan modification request, you have the right to ask for a review of the decision if the mortgage assistance application was submitted at least 90 days before any scheduled foreclosure sale.

The appeal must be submitted within 14 days of the receipt of the mortgage servicer’s denial of your request.

You Can Call An Experienced Loan Modification Attorney For Help

Even with the new governmental rules helping borrowers, loan modifications can be tricky. Thus, as explained by one advisor, “If you do have some type of track record, and you have some time and you are savvy about these things, then you could tackle it yourself.” However, he also adds, “It’s always nice to have someone help you.”

In the Schaumburg area, you can get help from the Law Offices of Gilbert C. Schumm. We have over 35 years of experience helping people with obtaining loan modifications in Schaumburg, Illinois and the surrounding areas, including Elk Grove Village, Palatine, Chicago and Arlington Heights. If you are in Cook, DuPage or Will County, please call (847) 559-9109.

Available Defenses when facing Foreclosure

Foreclosure Defense Options in Schaumburg

The State of Illinois continues to experience a foreclosure rate that is over one-and-a-half times greater than the national average. According to the University of Illinois at Urbana-Champaign, the most common circumstances that cause foreclosure are medical problems, job loss, divorce, and death of one of the spousal owners. However, regardless of what caused the foreclosure, there are defenses available for Chicago area owners who want to fight a foreclosure action.

Illinois Mortgage Foreclosure Law and Foreclosure Defense

Illinois Mortgage Foreclosure Law (IMFL) governs the rules for foreclosures in Illinois. However, state and federal law can come into play when determining how to fight a foreclosure action.  There are types of defenses and counterclaims that can be raised in a foreclosure action. The choice of which avenue or avenues to pursue are very fact specific and depend upon the type of mortgage being foreclosed upon, the interest rate of that mortgage, and whether the lender made required disclosures when the loan was originated. The choice of defenses also depends on whether the homeowner’s goal is to keep the property or dispose of it prior to the foreclosure.

If The Homeowner Wants To Keep the Property

If a homeowner wants to keep his or her property that has fallen into foreclosure, there are several defense options to consider, depending on the particular facts. Possible defenses include:

Violation of the Truth In Lending Act - The Truth In Lending Act (TILA) was enacted to ensure that consumers received full and accurate information when they enter into credit transactions such as a mortgage. Under TILA, certain things must be disclosed to a borrower, including the annual percentage rate (APR) of the loan, the finance charge associated with the loan, the amount financed, and the total amount the borrower will have paid after making all scheduled mortgage payments. TILA also requires that the lender clearly disclose the number of payments required under the loan, the amount of each loan payment, and when payments are due. A borrower also must receive a copy of the right to rescind.

If the lender failed to provide any of the required information connected to the loan, the borrower can seek monetary damages and/or loan rescission.

Violation of the Real Estate Settlement & Procedures Act - The Real Estate and Procedures Act (RESPA) is a law that ensures that borrowers are informed about loan closing costs and settlement procedures. RESPA requires that homeowners receive certain disclosures at various times in the loan transaction, including a standardized Good Faith Estimate (GFE) and a HUD-1 outlining actual closing costs. It also prohibits kickbacks that increase the cost of settlement services.

Damages for a RESPA violation may include monetary damages, as well as attorneys’ fees and costs.

Home Ownership And Equity Protection Act - The Home Ownership and Equity Protection Act (HOEPA) is an amendment to TILA. It was enacted to address abusive practices in the area of refinancing and closed-end home equity loans with high interest rates or fees. HOEPA applies to mortgage transactions where the loan application was received on or after January 10, 2014. The law prohibits balloon payments, negative amortization, default interest rates higher than pre-default rates, unfavorable rebates of interest on default, most unfavorable repayment schedules and prepayment penalties, and many due-on-demand clauses.

Penalties for HOEPA violations include statutory and actual damages, attorneys’ fees and costs, and loan rescission for up to three years.

Illinois Interest Act - The Illinois Interest Act governs the maximum rate of interest that can be charged on loans made in Illinois. It specifies that contracts with an interest rate greater than 9 percent are void.

Common Law Fraud - Mortgage fraud occurs where a lender intentionally encourages a borrower to enter into a mortgage loan when the borrower would not have done so if he or she had correct information. Common law fraud also looks at whether the loan terms or circumstances surrounding the loan are or were so unconscionable as to “shock the conscience,” including situations where the borrower was pressured to enter into a loan, did not understand the loan terms, was not represented by counsel when entering into the loan, and entered into a loan with outrageous terms.

Unclean Hands - The principle of “unclean hands” is an equitable one. It requires that the party complaining about a matter before the court did not contribute to the situation being complained of. If a lender has contributed to a borrower’s default or has not cooperated with reasonable borrower requests (such as providing pay off information upon request), the lender may be found to have unclean hands and not be allowed to proceed with the foreclosure.

Lack Of Jurisdiction - In order to initiate a foreclosure action, the entity filing the foreclosure action must actually have an interest in the loan being foreclosed upon. With the selling and packaging of loans, it is possible that the entity filing the foreclosure action may not actually own the note any longer. Thus, lack of jurisdiction may be asserted as a defense if the plaintiff in the action cannot establish that it owns the borrower’s mortgage note.

Lack Of Standing - Lack of standing addresses whether the lender is registered to do business in the state and whether the party complaining of a mortgage default is authorized to bring the foreclosure action.

The Law Offices of Gilbert C. Schumm is committed to working with homeowners in the Schaumburg, Arlington Heights, Palatine, Des Plaines, Mt. Prospect, Hoffman Estates, Bartlett, Streamwood, Hanover Park, Elk Grove Village, Rolling Meadows, and Roselle areas who have fallen behind on their mortgage payments and are facing foreclosure. We have extensive experience in real estate disputes and litigation, and we are dedicated to obtaining the best outcome for you. To schedule a free consultation to discuss your home retention options, please call us at (847) 559-9109.