Deed in Lieu of Foreclosure Illinois

Guide to Deed in Lieu of Foreclosure: Illinois

What is a Deed in Lieu of Foreclosure?

There are many options a person has when faced with economic instability and trouble in paying their mortgage. Apart from actual foreclosure, a deed in lieu of foreclosure is an option a homeowner can choose in order to pay back collateral owed to a lender. The deed in lieu of foreclosure in Illinois is not always an option, but the lender will often approve the process. Most of the laws for a deed in lieu of foreclosure in California reflect procedures similar to other states, but some laws are unique within the state of Illinois.

The process involved in any foreclosure or deed in lieu of foreclosure in Illinois is a complicated and stressful process for any homeowner. It’s often in the best interest of the mortgager to hire an attorney in order help with the process and negotiate terms with a lender or mortgagee. You lawyer may suggest different options rather than a deed in lieu of foreclosure in the state of Illinois, so it’s best to consider your options before you proceed with a particular action.

General Laws Surrounding Deed in Lieu of Foreclosure

Some laws carry over from state to state because of statutes given under the U.S. Department of Housing and Urban Development (HUD). Some of these standard federal laws fall below:

1) If a mortgager has been approved for a deed in lieu of foreclosure in Illinois or any other state, they only have up to 90 days to complete the title transfer from the beginning of the approval. If a mortgager cannot complete the process within 90 days, economic disciplinary action may be taken against the mortgager.

2) Under HUD, a mortgager may be awarded up to $2,000 for junior liens and/or upon vacating the property. The limit is $2,000, and less money will be awarded in some cases.

3) It’s possible a mortgagee may decide to revert from the foreclosure process to the deed in lieu process. This decision is the ultimate decision of the mortgagee under their Quality Control Plan.

These federally mandated laws under HUD are not all of the laws that apply to a deed in lieu of foreclosure in Illinois and other states. You should consider researching the government website if you have any questions about any given law.

Important Laws for Deed in Lieu of Foreclosure in Illinois

May of the laws for a deed in lieu of foreclosure in Illinois compare similarly to other states. However, under the Illinois General Assembly’s compiled statutes and Section 15-1401 of Chapter 110, the state provides lenient provisions and forgiveness of the original mortgager in some cases. Under a paraphrased version, the law reads:

If a mortgagor and mortgagee agree to a deed in lieu of foreclosure in Illinois, the mortgagor’s interest will be terminated and shall relieve all personal liability of all persons who may owe payment secured by the mortgage unless a person agrees to not be relieve from certain interests.