With countless Chicago homes facing foreclosure, it’s crucial for homeowners and mortgage lenders to understand this challenging process – particularly when dealing with older properties or those with city code violations that can complicate matters further.
So what is a pre-foreclosure in Chicago anyway?
Many homeowners throughout Chicago and Chicago are struggling with monthly mortgage payments, especially in neighborhoods with aging housing stock where unexpected repairs and code compliance issues create additional financial strain.
When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or lose their home. This critical period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current. This timeframe can vary depending on the bank and your specific situation.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home, assuming ownership, and evict the homeowner. Fortunately, during this stage of the foreclosure process, a mortgage holder still has several options to prevent losing their home, even with properties that have maintenance challenges.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender, which can be especially stressful when dealing with an older home or property with existing code violations that seem impossible to address.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic – even with challenging property issues, there are clear, transparent solutions available.
You have options that can delay or even prevent losing your home, regardless of code violations or your property’s current condition:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Chicago mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Chicago like us at CVG Properties LLC, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Chicago IL area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are very much aware of the widespread financial troubles across the country and they’re often willing to work with borrowers, even when properties have city code violations or unique challenges that make traditional sales difficult.
If you’re honest and communicate with your lender, you’ll frequently discover options that allow you to remain in your home or at least salvage your credit rating – our bilingual team can help navigate these conversations in either English or Spanish, ensuring nothing gets lost in translation.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution working directly with your lender… connect with us. We may be able to help, especially if you’re dealing with city code violations or need a fast, transparent solution without any surprises.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help, particularly if you have an older home in Chicago or the surrounding suburbs with code violations that other buyers avoid.
- We can buy your Chicago area house – We buy houses in Chicago and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch – in English or Spanish, depending on your preference.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation, even with properties that have city code violations or need significant repairs that seem overwhelming.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure resources. Our team specializes in solving complex property situations quickly and transparently, particularly with older homes that other buyers often avoid.