What is the deed in lieu of foreclosure process for Illinois?

For a homeowner, deed in lieu of foreclosure means that they are giving up any right to the home that they are purchasing prior to the lender foreclosing on the property due to the failure of the homeowner to maintain current payments.  In Illinois, deed in lieu of foreclosure not only returns the property to the lender, but it offers the homeowner some specific relief.

Deed in lieu of foreclosure process

When a homeowner is notified by their lending institution that they are in arrears on their property and are facing foreclosure, the homeowner must make certain decisions. One possible solution is to offer the lender back the title to the home. The mortgage contract must be reviewed to ensure that this is possible.

For a deed in foreclosure to be enforced, a lender must have requested the foreclosure process begin by filing for relief under Illinois foreclosure statutes in court.  Once the court agrees that the lender may begin the foreclosure procedure, the homeowner may then offer the lender a deed in lieu of foreclosure.

Benefits of deed in lieu of foreclosure

While homeowner's who use the deed in lieu of foreclosure option for their home will not protect their credit rating, there are some benefits.  Lender's who accept a deed in lieu of foreclosure may not file a deficiency judgment against the homeowner in the event that the home is later sold for less than the outstanding mortgage balance. For the homeowner, this means that once they have transferred the property to the lender, they are under no further obligation to that lender.

Competent legal advice

Illinois homeowner's who are behind on their mortgage should contact a qualified real estate attorney who understands the foreclosure laws in Illinois.  No homeowner should risk losing their rights under foreclosure statutes and risk owing a deficiency judgment.