It may sound counterintuitive, but yes, a bank can foreclose on a building even if the mortgage payments are current. Real estate and mortgage laws are complex and can contain unexpected pitfalls that can trip up the most conscientious mortgagor (person making the mortgage payments). Here are some of the ways this can happen.
If Payments Are Current, What Causes Foreclosure?
Many mortgage contracts have clauses that involve things other than the actual mortgage payment. If these clauses are violated, the mortgagor can be found to be in breach of the contract. The bank can begin foreclosure proceedings, even if the mortgage payments themselves are current.
Can Other Late Home-Related Payments Cause Foreclosure?
Suppose a mortgage specifies that property tax and home insurance payments must be kept current, but the mortgagor fails to pay them on time. In that case, that could be a violation that would lead to foreclosure, whether or not the mortgage payments are up to date. Many lenders have property taxes and home insurance requirements, and they will monitor them to ensure they’re current.
What Are Other Reasons a Bank Can Foreclose When Mortgage Payments Are Current?
Property that isn’t adequately maintained to specific health and safety standards could trigger a foreclosure. Because the lender technically owns the property until the mortgage is paid in full, they have the right to expect the property to be kept in good condition and could have this as a clause in the mortgage.
There can be other items in a mortgage that require the mortgagor to do certain things. If there’s a homeowner’s association that the property is involved in, staying current with those dues and abiding by the rules of the association may also be necessary to avoid foreclosure.
How Long Does Foreclosure Take in Illinois?
The foreclosure timeline varies depending on the complexity of the mortgage and the legal case, but in Illinois, it averages between 12-15 months. Several legal steps must happen before an actual eviction, and a considerable amount of paperwork and legal notices must be created along the way.
What Should I Do if I Think I Might Be Foreclosed on?
Because this is such a complex area, and because it’s stressful and frightening for the mortgagor, bringing in an experienced foreclosure attorney as soon as possible is highly recommended. These attorneys have the expertise and the knowledge of the law to guide mortgagors through the process.
But even if the foreclosure process has already begun, it’s still an excellent time to bring in an attorney. In the meantime, try talking with the lender to see what options exist. Once the lender files the notice to foreclose, the mortgagor may start receiving offers of help that are “guaranteed.” The foreclosure world is full of scam artists—don’t accept any of these offers without discussing them with an attorney.
Let Us Advise You
If you or someone you know needs help with a bank foreclosure, call us at 708-575-1500 to work with one of our experienced foreclosure and bankruptcy attorneys.