Last year, I did a lot of phone consultations with clients about their underwater homes and condos. About 80% of those I talk with have already decided to strategically default. They could continue to pay the mortgage, but choose not to, because the property is $80k to $100k underwater. Usually, they are completely freaked out that the lender will immediately seize their assets or garnish their wages. Fear of the mythic deficiency judgment is deep and wide.
The reality of it is that deficiency judgments in Illinois are almost nonexistent, the lender will not take any of your assets ( unless you have a second mortgage), and frequently you will be paid the leave the property in a cash for keys arrangement at the end of the foreclosure.
Foreclosure is terribly confusing and clients have a lot of questions through the process, so I began offering to monitor the foreclosures of clients who wanted explanation and guidance through the case. I charge a fee of $50 per month billed to the client’s credit card. At the start of every month, I check the case status and email the client. If the client wants me to review court documents, I do that too. The client can cancel at any time. This has worked out pretty well and it seems to ease the anxiety of those going through foreclosure.
Monitoring is most popular with clients who are trying to stay in the property until the end of the case. In Cook County, most lenders are waiting about 6 months from the first missed mortgage payment to file a foreclosure. After the case if filed, the actual foreclosure case takes about 12 to 14 months, so it’s a long process. Those that move out of the property early in the foreclosure process usually are not interested in having the case monitored.
In Cook County, the status of court cases is listed on the clerk’s website under “Chancery.” You just type in your name and the case status pops up. But it’s hard to interpret what’s going on in the case, so the raw data is of little use to most people. Lake County has no usable website and the other collar counties have sketchy websites at best.
When the foreclosure is close to the end, the sheriff’s sale is scheduled. The problem is that the court websites don’t give any information on the sheriff’s sale. There are two mega-foreclosure law firms in Illinois that handle most of the foreclosures. Both of them are pretty responsive and will answer questions and will respond to calls or emails. One has a site that gives great, up- to-date information on the sheriff’s sale, but the other large firm has no website with sheriff’s sale information. Copies of motions and other court documents are always mailed to the homeowner in all foreclosures cases, so there is no lack of communication. It’s figuring out what the motion or hearing means that’s important.