Many Illinois homeowners believe that once their home has been foreclosed on and sold, they no longer have any financial obligations related to the home. Unfortunately, that is not always the case. Under Illinois law, mortgage lenders may pursue a deficiency judgment. This is a court order requiring the borrower to pay the remaining balance if the foreclosure sale does not cover the full amount of the mortgage debt.
Whether or not a bank can or will sue depends on the type of foreclosure, the sale price, and how the judgment was entered. A Round Lake, IL foreclosure defense attorney can help you understand how deficiency judgments work and how to challenge or limit those judgments.
What You Must Know About Deficiency Judgments
Illinois law (735 ILCS 5/15-1511) addresses how a deficiency judgment may be entered when a foreclosure sale fails to satisfy the balance due on the mortgage. The lender must file a motion with the court to request a deficiency judgment. At that point, the court will verify that the sale price was fair, which can be a safeguard against the lender accepting a low offer. If the court finds that the home’s sale price was not fair, the lender must provide evidence of value through appraisals and other comparable listings to justify the sale price.