by Doreen Martel

Created on: November 14, 2011   Last Updated: November 17, 2011

Illinois foreclosure laws are very confusing and their rights of redemption are even more confusing. Unlike most states with foreclosure redemption rights, in Illinois, homeowners must exercise their rights before the property is sold at auction, not after.

Explain redemption rights

According to Cornell University Law School, redemption rights are the rights of the property owner to pay the entire outstanding mortgage plus any additional fees associated with foreclosing on a property and regain the rights to their property. This process is generally offered in states where there are judicial foreclosures. In most cases, the rights to redemption allow a foreclosed homeowner to repurchase their home for a specific period of time.  While not all states offer rights of redemption, Illinois does offer them but not after a foreclosure sale.

Illinois rights of redemption

The process of foreclosure in Illinois must be done through the courts. There are no non-judicial foreclosures allowed.  In order for a homeowner to exercise their rights of redemption the following conditions must be met:

A) the homeowner cannot have exercised these rights in the past five years
B) if a final judgment has been issued, no more than three months may have passed
C) if a foreclosure complaint has been filed (on a residential property) no more than seven months may have passed

While these rules may be confusing, they may be in the best interest of the homeowner since no foreclosure sale may take place during the time periods for exercising these rights.

Illinois Compiled Statutes Section 765 Subsections 905 to 940 governs all real estate transactions. They also explain thoroughly the responsibilities of homeowners and lenders. Lenders are required by these statutes to provide specific notifications to a homeowner prior to filing a complaint in court.

Court proceedings for foreclosures in are handled by the Circuit Court in the county where the property is located. In the event that the property is sold at foreclosure, a homeowner has the right to remain in the property for 30 days. Foreclosure is not quick in Illinois, it may take more than seven months. If the homeowner files for bankruptcy or contests the foreclosure it may take longer.

Homeowners should be aware that they may be liable for any deficiency created if a property is sold in a foreclosure.  Deficiencies occur when the sale price of the property is less than the amount of the outstanding mortgage. Deficiency judgments may be avoided by offering a deed in lieu of foreclosure. Illinois is one of the states with the highest foreclosure notices issued in 2010 and 2011 is not looking much brighter. Homeowners with a basic understanding of foreclosure redemption rights in Illinois may still have time to save their homes.

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