630-466-1600

160 S. Municipal Dr. Suite 100, Sugar Grove, IL 60554

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upfront fees, foreclosure, loan modification, Illinois real estate lawyerIn the wake of the mortgage and foreclosure crisis that has plagued the nation over the past several years, you may have noticed an increase in advertisements for mortgage counseling services. These companies, which target not only homeowners but mortgage bankers and brokers as well, promise to help homeowners who are delinquent on their mortgage modify the loan’s terms to avoid foreclosure. In exchange for these services, homeowners are asked to pay an upfront fee. The only problem? Requiring payment of upfront fees is illegal in Illinois.

What is a Loan Modification?

Loan modifications alter the terms of an existing mortgage to make payments more affordable for a homeowner who is in danger of defaulting. In most cases it is done prior to a scheduled rate increase, for example when a five-year adjustable rate mortgage (ARM) is about to end, but can also be done when the mortgage holder’s circumstances have made it impossible for him to continue to make payments under the current terms of the mortgage.

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deficiency judgment foreclosure, Illinois real estate lawyerMillions of Americans have lost their homes to foreclosure since the 2008 subprime mortgage crisis. And for thousands of former homeowners–including in Illinois–the foreclosure nightmare is ongoing.

After a homeowner defaults on his mortgage payments, the lender files a foreclosure action. The house then becomes subject to a foreclosure sale, the proceeds of which go to the bank. However, a foreclosure sale will not necessarily generate enough proceeds to cover the bank’s expenses (i.e., what the homeowner owes to the bank). Such was the norm after the recent housing crisis.

Now, years later, some lenders are pursuing deficiency judgments to recoup borrowers’ old debts. Specifically, the “deficiency” is the difference between how much the property sold for at auction and the amount that was still due on the loan. Lenders can freeze the borrower’s bank account, garnish his wages and seize his assets in order to recover that difference, or at least a portion of it.

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630-466-1600

160 S. Municipal Dr. Suite 100, Sugar Grove, IL 60554

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