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Committee addresses improvements to Illinois foreclosure system

Homeowners in the Chicago area have been particularly hard-hit by the foreclosure crisis. But they are part of a larger troubled housing market where one out of every two homes sold at a loss in March. That rate was even higher in some of the outlying suburbs. To address the foreclosure difficulties in Chicago and Illinois, the state formed a committee last year to develop potential improvements to the system. The committee held a meeting last month that was open to the public.

Some of the committee's suggestions would benefit homeowners who are facing or are in foreclosure. Under a proposed rule, homeowners would receive a notice from the court when a lender has obtained a foreclosure and sale order. But the notice would go further and explain the solutions available at that stage of the foreclosure process. In addition, a person whose home has been sold in foreclosure would receive notice if the sale yielded any excess money.

Other potential changes include requiring more forms to complete foreclosure. Adding more paperwork to the process would attempt to provide additional oversight and better protection for homeowners. Lenders generally opposed such measures as burdensome, however. In addition, the committee proposed that once the redemption period ends, a 45-day window would start, during which the foreclosure sale should take place.

The foreclosure process can be long and complicated. According to the Treasury Department, Illinois courts complete a foreclosure in approximately 575 days. But there are options that can help a person deal with and even halt a foreclosure action, and some of the proposed rules may give additional help to homeowners.

The next meeting of the committee will occur on June 8.

Source: Chicago Tribune, "Exploring changes in state's foreclosure process," Mary Ellen Podmolik, May 4, 2012.

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