Foreclosure is a time in one’s life when everything feels like it is out of control. It is a time when the experienced advice of a good attorney can make a huge difference. While it can feel hopeless to try to avert the foreclosure in many cases, there are both legal and equitable defenses to foreclosure, though it can be difficult to formulate a proper plan of attack entirely on your own.
Understanding Judicial Foreclosure
Illinois is a judicial foreclosure state, which means that the courts govern the foreclosure process, as opposed to states where the foreclosure process is handled between the lender and the borrower themselves. It also means that the exclusive remedy for foreclosure and mortgage issues is found in the Illinois Mortgage Foreclosure Law (IMFL), which also covers real estate installment contracts if they fit certain requirements.
Some of the major differences between judicial and nonjudicial foreclosure primarily have to deal with how one is served notice, as well as the time frame of each proceeding. Judicial foreclosures can take far longer, given the redemption periods built into most states’ foreclosure laws (Illinois’s included). Also, the loan document involved in a nonjudicial foreclosure is most often a deed of trust containing a power of sale clause, rather than a mortgage.
Defenses To Judicial Foreclosure
Many judges in Elgin tend to assume that if a borrower is in default, they must be there justifiably, with no defenses. This is often not the case. There are many different defenses available to those in foreclosure, many of which originate in the Truth In Lending Act (TILA). Predatory lenders can and do cut corners that can run afoul of state and federal regulations that govern lending.
A major defense is that the mortgage itself is subject to challenge or attack under TILA or under state regulations. Subprime lenders in particular can cause serious issues – despite the bad press, many still operate, and sometimes they can succeed in getting a good person into serious financial trouble. The statistics are significant – according to the most recent relevant data, almost one-third of borrowers with subprime loans defaulted within the first 18 months.
Other common defenses include both legal and equitable attacks on the mortgage. Legal defenses are when it is argued that a specific law was violated or not adhered to, such as the Illinois Fair Debt Collection Practices Act. The FDCPA must be observed by both lender and borrower, and it is at least a partial defense if the lender has violated its tenets. Equitable defenses are rooted in public policy, such as the question of standing (that is, whether or not a lender has standing to initiate foreclosure in the first place), alleged fraud, or any other claim that would make it inequitable or unfair to proceed with the foreclosure.
Seek Experienced Legal Assistance
The skilled Elgin foreclosure defense attorneys at the Jackson Abdalla Law Group have many years’ experience in helping ordinary people get through a process that can be both frightening and complex. Contact our offices in Elgin to discuss your case. We also serve the people in the greater Chicagoland area including South Elgin, St. Charles, Carpentersville, Bartlett, and Streamwood.