Illinois is still suffering from the worst housing market crisis in history; in fact, areas of Chicago are still experiencing a record number of foreclosures. Many homeowners feel helpless and trapped as they struggle to make mortgage payments - while banks seem as if they can't process foreclosures fast enough. However, not all is lost for Illinois homeowners, as they possess something known as the "right to redemption." This ability to redeem real estate subject to foreclosure can even be exercised after a bank has obtained a foreclosure judgment against them.
Right to Redemption
Under Illinois' statutory right of redemption, only the owner can exercise the right to redeem. Moreover, the amount required to redeem can include not only the principal and interest owed on a mortgage, but also the costs associated with collection, attorney's fee, court costs and additional per diem interest.
Unfortunately for homeowners, the right to redemption cannot be enforced following the judicial sale of the property. Consequently, under Illinois law the right of redemption can generally be exercised during the following periods:
- When the property subject to foreclosure is residential real estate, the borrower may redeem the property within seven months of being served with summons or by publication, or within three months after the date of entry of judgment of foreclosure, whichever is later.
- When the property subject to foreclosure is NOT residential real estate, the borrower may redeem the property within six months of being served with summons or by publication, or within three months after the date of entry of judgment of foreclosure, whichever is later.
However, the redemption period can be shortened in the following circumstances:
- When the value of the real estate on the date of judgment is less than 90 percent of the amount required to redeem AND the lender waives any and all rights to a deficiency judgment against the borrower, the redemption period will be shortened to 60 days after the date of judgment of foreclosure or the expiration of any reinstatement period, whichever is later.
- When the court deems a property abandoned, the redemption period expires 30 days after the date of judgment for foreclosure.
Under Illinois law, this right of redemption is guaranteed for residential properties - if fact, statutory language states that any attempt to waive this right for residential properties is void. However, this same restriction is not available for commercial properties, and often commercial mortgages contain an expressed provision that does waive redemption rights.
A property owner - regardless of whether they own residential or commercial real estate - needs to be vigilant in protecting their property rights during foreclosure proceedings. An experienced foreclosure attorney can help navigate Illinois' complex foreclosure laws and advise you of your rights and options.
