As a rule-of-thumb, the property is offered to the highest bidder by a clerk of the court, a sheriff, or a trustee. The auction is by "open outcry" so that everyone knows what bids are being made. Usually there is a minimal incremental bid which can be $100 to $1,000 or more. It is interesting to watch a novice get excited and bid in increments of $5,000 or even $10,000 in his excitement to get a particular property. The pros who frequent the auctions target unsuspecting "newbies" because they know the newbies have no rational bidding methods and the pros use their experience to bid up the properties the newbies are trying to buy.

The auction or sale starts with the auctioneer asking for an opening bid. Someone will respond and in most cases it will be the bank that starts the foreclosure proceeding. The bank will usually start the bid for the final judgment amount which is the outstanding loan balance, plus the foreclosure processing costs. Let's use an example of XYZ Bank who has a final judgment amount of $200,000 including all costs and expenses. Usually XYZ Bank would start with a bid of $100, because the starting price is most often the final judgment plus $100 as the first bid. Lower bids could start the sale but generally XYZ Bank will always bid the amount owed plus $100 to cover the minimum bid.

In recent months, many banks have started the bid at less than the amount owed them. This is a fairly new strategy that is designed to overcome the issue of doing short sales with investors and all the hassles that go with them. For example, if the bank is willing to discount the loan to 80% of a recent Broker's Price Opinion (BPO), on a $200,000 balance due, they would start the bidding at $160,000. If there were no other bids, the bank would own the property anyway because they have a "credit" to bid up to $200,000 because of the final judgment amount. If anyone bids or the bidding gets heated, the bank will only get their $200,000 reimbursed and the highest bidder above that amount will get the property. If the final bid is, for example, $250,000 the additional $50,000 is called "overage" and will be returned to the homeowner under most circumstances.

Professional buyers who frequent the auctions daily have developed advanced techniques to beat out other bidders and to use "mortgage credits" as real money. Their most advanced technique for stopping competitive bidders is to only bid in the incremental amounts of say $100. This gets the competition very hassled and they will often start jumping the incremental bids in large amounts ($5,000 - $10,000) to get the "pro" to stop bidding. The pro just keeps coming back with an out cry of "plus $100". Eventually, the newbie will quit bidding and the pro will take the property for $100 over the last bid. If the newbie bids well past what the pro wanted to pay, the pro keeps bidding and making the newbie go higher and higher, until the newbie quits because he comes to his senses or doesn't have enough money. But it is not over yet because the pro now reneges on his last bid and the newbie gets the property at a grossly inflated price!

Another advanced tactic the pros use is to buy the worthless second mortgages for a few cents on the dollar. These liens are transferred to the pros at full face value so the pro will pay perhaps $500 for a $25,000 lien. Now the pro has a "bid credit" of $25,000. When the bidding starts the pro starts bidding to pull in newbies from the crowd and can continue bidding for $25,000 without it costing him any money other than the $500 he paid for the second mortgage (lien). Here is where it really gets going - the pro keeps aggressively bidding until the competitor, usually a newbie, quits (i.e. $20,000) and the pro reneges on his last bid. The newbie now owns the property at $20,000 over the first mortgage amount due and the pro has turned $500 into $20,000 with his only risk being his original $500.

The pro uses "shill" bidders so if he has to renege he doesn't get barred from the future sales. There are many other tricks of the trade that the pros use, so if you decide to buy a property at the foreclosure auction you better beware of the hazards. Also find out ahead of time what additional costs the county charges such as auctions fees, title transfer, document stamps, etc. so you aren't surprised at how much money you need for the final purchase amount. Good luck and good bidding!

What is the processing period for foreclosure Illinois?

Processing period is 210 days in Illinois.

Is there any right of redemption in Illinois for foreclosure?

No, Illinois does not offer right of redemption.

Are deficiency judgments permitted in Illinois?

Deficiency judgments are permitted in Illinois.

Which law provision governs foreclosure in Illinois?

It is found in 735 ILCS 5/Art XV.

What happens during Judicial Foreclosure in Illinois?

First lender needs to send a notice to the borrower at least 30 days before the courts judgment of foreclosure. If court agrees with lender, it issues notice of sale with terms and condition of the sale. It should meet the minimum standard provided in the Illinois Statutes. The notice should be published in legal and real estate section of local newspaper once a week for three weeks. The last notice should be published minimum 7 days before the sale. The sale is conducted by the sheriff or any judge within the county where the property is located.

What happens during the Deed in Lieu of Foreclosure?

In this type of foreclosure, borrower simply has to give deed to the lender and his interests in the property securing the deed will be terminated. If lender accepts the deed, no deficiency judgments can be issued against the borrower afterwards.

What happens during the consent foreclosure?

In this type of foreclosure, court gives a judgment by which lender gets all rights related to title of the property. After this type of foreclosure, lender should not file for a deficiency judgment.

This is legal information; it should not be treated as legal advice.

Evictions for renters are handled by strict contract law standards and the tenant often has more rights than the landlord. In many states, tenants can sue their landlord for breach of contract, possibly harassment and receive many times their monthly rent if they win the law suit. Some cities make it extremely difficult to evict tenants for any reason. This is not the case with foreclosure evictions because the former homeowners are not tenants. Well-meaning people often tell foreclosure victims about experiences they know about where tenant/landlord law was involved. Again, this is not the situation where foreclosures are involved.

Foreclosure evictions are handled slightly differently in most cities so it is important that you contact the court issuing the eviction notice to determine what to expect. The person who serves the eviction notice, or posts it on the front door usually is not the same person who will enforce the eviction. The eviction will be enforced by a representative of the court, often a county sheriff or policeman. Occasionally, the person giving the notice will tell you that you "actually" have an extra 24 hours, BUT DON'T expect this extra time. Plan on being completely moved out before the actual deadline.

If you are looking at being homeless, contact your local Red Cross or county housing agency for a place to stay temporarily and for cash if necessary. If you have the ability to rent a storage unit for your furniture, store it until you find a place to stay so you aren't driving a rental truck around town looking for a place to rent. A little preparation is useful in avoiding tons of aggravation later.

The actual eviction may be handled differently, but often an officer of the court (sheriff or policeman) accompanies the new owner or his representative, to the property and alerts anyone in the premises that the eviction will start in a few minutes. In this case, the owner's representative is responsible for removing everything they don't want from the premises. The people in the premises are being evicted, not the contents of the property! If the contents are junk or the owner doesn't want any of it, it usually will be thrown into the swale or the street for sanitation to pick up. If the former owners are not in the premises (at work), the contents could still be thrown out or kept by the new owner. The items put in the street sometimes start a feeding frenzy among the neighbors. Don't let this happen to you. Take action to resolve your foreclosure early or get moved out before the actual eviction occurs.

From this point on, both judicial and non judicial procedures are basically the same.

Occasionally, the power of sale clause in a particular case is very specific in its language.  If it states the place and date and terms of the sale, then those instructions must be followed. 

In all other cases, the next step in the process begins with the notice of sale being mailed to the homeowner.  This letter must be sent no later than twenty days preceding the scheduled sale date.  This same notice of sale must be published in a local newspaper that has circulation in the county where the home is located.

This publication of the notice of sale must be run no less than twenty times.  It must be continuously run in that paper right up until the scheduled sale date.  This requirement is enforced, if the home in question is located in a city with fifty thousand residents or more. 

If this home is located in an area where there is less than fifty thousand inhabitants, then the advertisement of the upcoming sale date must be run once a week for the last four weeks leading up to the scheduled trustee’s sale.  The last of these four ads must not be place any later than one week prior to the scheduled sale date.

Within twenty days preceding the scheduled sale date, the banks attorney is required to send a notice of sale by certified or registered mail to the homeowner and any other entities or persons with an interest in the home.  That would include a second mortgage holder, anyone with a lien against the property, or anyone with a trust deed on the property.

The out of court foreclosure process in the state of Missouri usually takes from 60 to 90 days.

 Judicial or in court process can take a lot longer depending on how large the docket of files to be processed prior to the case in question can be started.

The lawyer for the bank, commonly referred to as the trustee, conducts the sale.  This sale is a public auction with ownership of the house being awarded to the highest bidder.  All bidders in Missouri must be able to pay in cash.

Missouri does give the former owner of the property sold at auction the right to re-gain ownership.  This is called a right of redemption and the filing frame allowed to re-purchase this property is the twelve months following the auction date.  This purchase price required to exercise this right of redemption would be the price paid at the trustee’s sale or auction.

If the bank wishes to pursue a deficiency judgment after the sale has taken place, Missouri allows for this to be done.  A deficiency judgment is the right to seek additional money from the former home owner to make up the difference to the bank between the money generated by the sale and the amount of the loan.

The only reason a bank would pursue this course of action is if there is some evidence that the former homeowner has some assets worth taking.  Most people who lose their home to a trustee’s sale do not have any other assets.  The banks of course realize this.  Blood from a stone…don’t try.  Consequently, deficiency judgment, though allowed, is rarely pursued.

Missouri has a right of redemption period of one year if judicial process was followed.  The person desiring to regain ownership of the home they lost in this foreclosure process can do so if they file an intent to redeem with the court sometime in the first twenty days following the sale.  This course of action requires the former homeowner to post a bond for all costs and fees due.  The price that will need to be paid to regain ownership of the home will be the full amount of the unpaid loan plus cost like attorney’s fees etc.

Deficiency judgments are not allowed in this state.   A deficiency judgment is when the bank can seek additional money from the person who lost their home at the trustee’s sale.  It allows the bank to make up for the difference between what the house sold for at auction and what was owed on the loan.  This further annoyance of the people who already lost their home is not permitted in Missouri.