Legal Question in Real Estate Law in Illinois
Foreclosure Avoidance
I have a question concerning foreclosure law. The example is as follows: A mortgage company accellerates your loan, demands full payment, and proceeds with foreclosure. You file bankruptcy and the home is under bankruptcy protection. Six months later, attorneys for the mortgage company allege you did not make your payments, so they move to ''break'' the house away from bankruptcy protection for purposes of proceeding with foreclosure. Eventually, they get that wish granted, and move into county court. The foreclosure sale date is eventually granted.
Here is the question: I was told the following;
''After your mortgage company accelerates your loan, they no longer accept a payment less than the full amount due. They are likely to send it back to you asking for the whole amount. The reason for this has it's origin in case law. If the lender accepts less than full payment, they must terminate the foreclosure process and start from square one.''
My question to you is, how valid is the above answer?
2 Answers from Attorneys
Re: Foreclosure Avoidance
It is pretty much on the mark. If a lender accelerates payment and forecloses and then accepts a monthly payment, this can appear to a court that they are willing to return to the original terms of the loan. Lenders do this to protect themselves.
Re: Foreclosure Avoidance
It's pretty valid. You must go back in front of the foreclosure judge and bring it to his attention.
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