New rules for foreclosures in Illinois

February 22, 2013 3:19:52 PM PST
The Illinois Supreme Court has developed rules that require lenders to exhaust all efforts to help a homeowner before they can move forward with foreclosure.

Three rules could make a big difference as to whether you keep your home or not.

After seeing deceptive practices impacting homeowners, Supreme Court Justice Mary Jane Theis created a special committee.

After two years of gathering input, now there are mandatory rules regarding foreclosure which the judges, homeowners and lenders must follow. Judge Lewis Nixon has presided over hundreds of thousands of foreclosure cases. Stacks of documents behind the courtrooms are evidence of the pace at foreclosure court. Each packet represents someone's home.

There are currently 77,000 foreclosure cases pending in Cook County. So many that you'll find law students piled around tables, simply making sure each case is ready for court.

Judge Nixon says, unfortunately, in a lot of cases the homeowner doesn't show up. He says homeowners who appear in court have a chance, and new rules in Illinois give homeowners a fighting chance.

"If a judge sees that someone is being proactive and trying to save their home," said Nixon. "That judge is probably going to give them some more time."

The Illinois Supreme Court adopted three new rules Requiring, among other things, foreclosure counseling for homeowners, and requiring more from the lenders requesting foreclosure, like proof of the homeowner's debt and proof that a mortgage modification is not possible.

Judge chaired a special committee that recommended the new rules.

"The borrower deserves an answer, yes or no, and if the answer is yes, they can modify that loan, and if it's no, then the borrower knows where they stand, but at least when they are standing before the judge, the process is over," Nixon said. Friday, the U.S. Secretary of Housing and Urban Development and several state's attorneys general discussed a national settlement with lenders to help homeowners at Loyola University's School of Law.

So far, settlement has helped 20,000 Illinois homeowners.

Even after the settlement is exhausted, the new rules for Illinois courts remain.

"We need to do more and that starts in many cases with figuring out tools to keep people in their homes," said HUD secretary Shaun Donova. "That's why this foreclosure settlement is so important."

"For every family that we can keep paying their mortgage in their home, we stabilize that community, we turn around the housing market, and that's what we have to do," said Illinois Attorney General Lisa Madigan.

New rules in Illinois courts takes effect March 1.

Some counties will have until June to create a mediation program. Cook County already has that support in place for homeowners.


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