As an Illinois Bankruptcy Lawyer I have definitely noticed that mortgage companies have not been moving nearly as fast as they use to, when they foreclose on home.
The reason for this slow down is that with the burst of the housing bubble a huge number of homeowners have fallen behind in their mortgage payments and the volume of problem loans to deal with has slowed down those who process the collection actions. Banks of course lose money on most foreclosures, and while you would never realize it from dealing with their collection departments or their loss mitigation departments financial institutions would prefer to avoid a foreclosure if possible. Thus it is not surprising that with so many loans going bad, which are costing the mortgage companies tremendous losses, the lenders in many cases are postponing court action.
Under Illinois law a foreclosure sale cannot take place for at least 210 days after the bank serves the homeowner with a summons for the foreclosure law suit. After the sale date the mortgage company needs to obtain a possession order from the court, and the possession order allows the owners to remain in their home for another 30 days. The service of the summons only occurs after the mortgage holder files a foreclosure suit in court. Up until the last couple of years my advice as a bankruptcy lawyer has been to assume that the bank will file the lawsuit after the homeowner has missed three monthly mortgage payments. Thus we would figure a homeowner had about a year after he or she stopped making payments before they would have to leave the home.
For most homeowners this is no longer the case though, and I am encountering numerous individuals who are still in their homes well over a year after they have quit making mortgage payments. In fact according to the Wall Street Journal mortgage companies have not yet foreclosed on a quarter of homeowners who have gone for two years without making a mortgage payment.
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