Preferred Method of Foreclosure:
Idaho permits non-judicial foreclosure through a owner of sale clause in a deed of trust. If the borrower goes into default, the property may be sold by giving the borrower the proper notice.
The foreclosure notice must describe the nature of the default and the lender’s election to sell. The notice must set the date, time, place and basis for the sale.
The notice must be recorded.
The notice must be sent to anyone who requests a copy. The borrower must be given a copy at least 120 days in advance of the sale. Lessees or occupants must also be given the same notice as the borrower.
The notice must be published in the newspapers in the county where the property is located at least once a week for four consecutive weeks. The final ad must be run not less that 30 days in advance of the foreclosure. The published notice must contact a legal description of the property, its street address and the name and phone number of someone who can give directions.
Within 15 days of the date of recording of the notice of default, a junior lien holder or the borrower can pay the amount due on the loan and a trustee’s fee if the default is cured prior to the first newspaper publication of the sale.
The foreclosure sale must take place at the time called for in the notice, unless the sale is postponed. The sale can be postponed by the lender to a new time and place, but not later than 30 days after the original date. Multiple postponements are possible. The proceeds of the sale must go first to the lender, then to any interior recorded lien holders, then to the borrower.
The lender can sue the borrower is a separate lawsuit for a deficiency within three months following the sale for whatever sum remains unpaid on the mortgage, provided the balance exceeds the fair market value (or such reasonable value as the court finds) of the property at the time of the foreclosure.
The real estate may be redeemed by the borrower up to one yea after the sale if more than 20 acres are involved, or six months for land parcels of less than 20 acres.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: Yes
Judicial. Illinois does not allow power of sale non-judicial foreclosures. They are explicitly banned by statue. Instead, foreclosure is done by filing a lawsuit. The suit may seek either strict foreclosure or a foreclosure under the Illinois Mortgage Foreclosure law. The latter approach is much more common that strict foreclosure. A new procedures also exists to speed up the judicial foreclosure under the Illinois Mortgage Foreclosure Law called "consent foreclosure." The Illinois Mortgage Foreclosure law spells out in detail what must be included in the lender’s lawsuit (petition) for foreclosure. If the lender strictly observes the requirements for proper petition, then it is possible for the lender t win the lawsuit by motions without having to go to trial.
A consent foreclosure will vest all then borrower’s right and title in the lender free and clear of all claims (except liens of the U.S. Government) including rights of reinstatement and redemption of any junior lien holder who was properly joined and who failed to object. Upon objection, the court may hear such evidence as is required and enter an order that title vests subject tot he lien, or if the junior lien holder pays the balance on the mortgage plus any additional interest, within 20 days of the entry of a court order commanding the same, then the junior lien holder can redeem the property. The final judgment in a consent foreclosure must recite the lender’s waiver of right to any personal judgment for a deficiency and will bar a deficiency against not only the borrower, but any co-borrower or other person who is liable for the mortgage.
Illinois has rather elaborate requirements about who must and who may be party to the lawsuit. A person who must be party to the lawis a necessary part, a persona who may be party is permissible party., The borrower and any other person obligated on the note are necessary parties. Permissible parties include the owner of the loan note and any trustee. A few others such as tenants or other persona in possession, guarantors, the State of Illinois , the U.S. government, a mechanic’s lien claimant, an assignee, and any other mortgagee or person with any claim to title may be joined. Any person joined retains any lien or claim. A non-record claimant must come forward or lose out. Other complicated rules govern interventions, or entry of outside parties to the lawsuit.
The lender must begin the lawsuit by filing a plaintiff’s complaint (also sometimes called a petition) and having it served on the borrower. The complaint must include the following:
The nature of the instrument on which foreclosure is sought, whether it is a mortgage, a trust deed or another instrument.
The date of the mortgage, the lender’s and borrower’s names, the date and place of recording and the book and page number or document number.
The ownership interest subject to the mortgage, such as fee simple, etc.
The amount of the original indebtedness, including subsequent advances.
A legal description of the property.
A description of the default, including the balance due, the date of the default and any further information on the default.
Thename of the present owner
The names of the persons who are joined as defendants and whose interests are sought to be terminated.
The names of any persons who are joined as defendants and whose interests are sought to be terminated.
The names of any persons who are to be personally liable for a deficiency.
Any facts that justify a shorter redemption period than seven months from the service (or publication) of the summonsor three months from the entry of judgment of foreclosure. (The statue suggests the a shorter period would be justified if the real estate had a value of less than 90 percent of the amount owed on the loan.)
A statement that the right of redemption has been waived, if it has been
Facts to support attorney’s fees
Facts to support the appointment of a receiver, if desired by the lender.
A statement that the lender will accept title in lieu of any other action against the borrower, if the lender so desires.
The lender should conclude by asking for ("praying for") a judgment of foreclosure and sale, an order shortening the redemption period (if requested), a personal judgment of r a deficiency (if requested), a personal judgment for a deficiency (if requested) and an order granting possession. If these allegations are made, as described above and supporting documents such as copies of the note and deed of trust are attached, then the lender’s complaint will be deemed to include the allegation necessary for a foreclosure.
Special matters can be included in judgment, if requested in addition t the allegation previously described. These would include a request for a sale by sealed bid, a manner of sale other than a public auction, any fees to a broker or auctioneer, any signs to be placed on the property,the newspaper or newspapers in which the notice of sale shall be published, the formats of the ads, the requirements that title insurance be provided at the foreclosure sale and such other maters as the court approves to ensure the most favorable commercial price for the type of real estate involved.
If requested and agreed to by the parties, the property can be sold to the first person who offers in writing to buy the real estate for such commercially reasonable terms as the parties may agree to, and the court shall then other the sale in such a matter , subject to its subsequent confirmation after it is closed. The advantage of this procedure is that a broker could be employed t find a buyer at a decent price, which would be better than what the property would get at a sheriff’s auction. The court must confirm the sale.
If the property is to be sold by sheriff’s auction, then a notice of sale must be published and include the following:
The name, address and telephone number of a person who can be contacted regarding the purchase of the real estate.
The real estate must be described in terms of its common address (other than a legal description), its legal description, and its improvements.
The times the property can be inspected prior to the foreclosure sale.
The date, time and place of the foreclosure sale including the terms of the sale.
The cast title, case number and court in which the foreclosure lawsuit is filed.
Any other information required by the court.
The notice must be published in the usual newspaper for legal notices in that county once a week for three consecutive calendar weeks, the first such notice must be 45 days prior to the sale and the last notice not less than seven days prior to the sale.
If the sale is to be adjourned more than 60 days, then notice must be republished, if less than 60 days, the person conducting the sale can announce the date, time and place for the adjourned sale.
After the sale, the borrower gets a receipt that the property has been sold. Once the sale price is paid, certificate of sale shall be issued to the buyer. A duplicate of the certificate must be recorded. Upon confirmation o the sale by the court, a deed may be given to the buyer at the foreclosure sale. The confirmation hearing can also provide for a deficiency.
The right to redemption may be waived by the borrower in the mortgage instrument, or after the commencement of foreclosure by written consent filed with the clerk of the court, but only if the lender thereupon waives the right to a deficiency. However, waivers signed prior to July 1,1 987, may still be valid. Otherwise, the borrower has the right to redeem the property within seven months from the date the lawsuit to foreclose was filed, or three months after the date the judgment was entered by the court. Other creditors have six months to redeem. The redemption period may be extended by the court. If a bankruptcy court says (delays) the redemption, then under Illinois law, the redemption runs to 30 days after the stay expires, or the normal period minus the period of the stay whichever is longer. In any case, whether bankruptcy is involved or not, a notice of the intent to redeem must be filed with the court 5 days before the redemption rights are exercised. The amount to redeem the property shall be that specified by the court in its judgment ordering foreclosure. The redemption amount shall be paid to the court clerk. If there is no objection, the clerk will give a receipt for the redemption amount, and the lender must then furnish the borrower with a release of the mortgage or satisfaction of the judgment. If there is an objection, the court will promptly hold hearing and rule on the objection. A special right to redeem exists if the lender attempts to sell the property at foreclosure for less than the court-specified amount. The borrower can then redeem at the price for which the lender tried to sell the property.
The borrower has the right to reinstate the loan within the first 90 days after being served with the lawsuit.
One of the most frightening features of the Illinois foreclosure law is that the lender can obtain physical possession of the premises during the foreclosure lawsuit and prior to entry of a final judgment. In fact, at an early stage in the lawsuit, upon request of the lender and for good cause show such as damaging the property or abandonment, the court can put the lender in possession of the property and evict the borrower. The court must be satisfied there is a reasonable probability that the lender will prevail upon a final hearing of the case. However, an existing tenant cannot be evicted, but the lender can collect the rents. A receiver may be appointed to take charge of the property and the rents. Foreclosure buyers can obtain possession within 30 days. Otherwise, a lender can obtain possession from the borrower 30 days after the confirmation of sale.
In Indiana , a lender can file a lawsuit to foreclose on real estate. The date the mortgage was signed determines the length of time it takes between the filing of the lawsuit and the foreclosure sale. Here are the applicable waiting periods:
Before January 1, 1958 :
Between January 1, 1958 - July 1,1975
After July 1, 1975
If the owner files a waiver of the time limit with the court clerk, which has been signed by the lender (or judgment holder), then the foreclosure sale process may begin without the need to delay 3 to 12 months. If such a waiver is used however, the lender loses the right to sue the borrower for a deficiency.
The foreclosure sale process involves publishing an ad once a week for three weeks. The first ad must be run 30 days before the sale. At the time the first ad is run, each owner must be served with notice of the foreclosure sale by the sheriff. The sheriff conveys title by a deed given immediately after the sale. The owner may reside in the property, rent free, until the foreclosure sale, provided the owner is no) committing waste, which means tearing up the property.
There is no right to redemption after the foreclosure sale. The waiting precedes the sale. If the property is not a principal residence, a receiver can be appointed to take charge of it.
Iowa law places strong restraints on foreclosures, particularly on loans for agricultural property. In Iowa , many special notices must be given to borrowers advising them of their rights. Lenders are not always permitted to foreclose at all. For example, a court may declare a moratorium on foreclosures due to an economic emergency. There are basically two ways to foreclose on nonagricultural property in Iowa :
If both the lender and the borrower agree in writing, then a real estate mortgage can be foreclosed voluntarily as follows:
The borrower conveys title of the property to the lender.
The lender accepts title and waives any rights to sue the borrower for any other claim, such as a deficiency.
The lender gets immediate access to the property. The lender and borrower record a statement, signed by both parties that they have elected voluntary foreclosure. The lender sends by certified mail, notice of the voluntary foreclosure to all junior lien holders, who have 30 days to exercise any rights of redemption they may have. The borrower must sign a statutory voluntary foreclosure form.
The form explains that by signing it the borrower surrenders any statutory right to reclaim the property within one year and the right to continue to occupy the property. However, the form states the borrower cannot be sued for a deficiency if the form is signed. It also advises the borrower to seek legal counsel concerning all the competing) rights. The form also provides for its own cancellation within five days.
If a borrower agrees to the voluntary redemption procedure, the lender may not report the borrower to the credit bureau as being delinquent on the loan, but the lender may state that the voluntary foreclosure procedure was used.
Other than the voluntary foreclosure procedure described immediately above, the only way a lender can foreclose a deed of trust or a mortgage on Iowa real estate is by a lawsuit in court, governed by principles of equity law. The lender must choose either to sue on the note or sue to foreclose the mortgage, but not both. When a mortgage or deed of trust is foreclosed, the court will render judgment for the entire amount due, and direct the sale of the mortgaged property, or as much as is necessary. The lender may sue a borrower for a foreclosure with or without redemption, but the latter requires the borrower to sign a waiver.
Foreclosure with Redemption The borrower retains a right to redeem the property after the sale, unless the lender has chosen to sue for foreclosure without redemption.
Foreclosure without Redemption In the event that a lender undertakes foreclosure without redemption, neither the borrower nor junior lien holders have rights to redeem. However, if the borrower bids an amount equal to the amount owed on the loan at the foreclosure sale, then the borrower gets the property regardless of the fact that junior lien holders might bid more at the sale. In foreclosure without redemption, the first page of the lender's petition to foreclose the mortgage must contain a notice, in capital letters of the same size as the rest of the petition warning the borrower that the lender has elected foreclosure without redemption. This means that the sale will occur promptly unless a written demand is filed with the court to delay the sale. If the demand is filed, the sale of a principal residence will be delayed 12 months from the entry of judgment. ( Sale is delayed two months on other properties and six months on the residence if the lender's lawsuit waives recovery of a deficiency.) However, if the borrower files such a demand for delay, then the lender can sue the borrower for a deficiency. If no demand for delay is filed, the lender cannot sue for a deficiency. Either way, however, once the sale takes place, the buyer at the foreclosure sale can take possession immediately.
In Iowa a borrower has a general right to effect cure by making up missed payments prior to foreclosure. The lender must send the borrower a notice of the borrower's rights to cure as a prerequisite to foreclosure.
Before filing a lawsuit or taking any action to foreclose on a borrower's one- or two-family home, any regular lender, such as a bank, S&L or mortgage company, who believes in good faith that a borrower is in default on a deed of trust or mortgage on a homestead, must give the borrower a notice of the right-to-cure default. Individuals who are lenders do not have to give the notice.
Regular lenders must give the notice by direct delivery or by mail to the borrower's residence. The notice does not have to be given in nonresidential situations.
The notice must state
If the borrower fails to perform in the proper manner by the proper date, then the notice must also state that the lender can initiate foreclosure. Once notice is given. the following timetable applies:
The borrower must be given no less than 30 days to cure the default by tendering (sending) either
A lender may give more than 30 days without waiving or losing the right to commence foreclosure due to an uncured default.
A borrower has a right to cure the default by bringing in the payments, unless the creditor has given the borrower a notice of the right to cure once before within the past 365 days. Curing the default restores a borrower's rights under a mortgage or a deed.
Due to the bad luck Iowa 's farmers have sometimes experienced, the state legislature has passed many special laws regulating farm foreclosures. Iowa 's legal protections against foreclosure of farmers are truly exceptional compared to any other state. The procedures to foreclose on agricultural property in Iowa are even more extensive. The lender must attempt mediation on land used as an individual's farm, family farm, or a qualified farm corporation through the Farm Mediation Service. A notice and initial meeting must be held within 42 days of a request by the farmer. The farmer also has a first right of refusal when agricultural property is sold at execution. There are special deed in lieu procedures for agricultural properties. In the special deed in lieu arrangement, the lender takes title, but the farmer can lease the land back from the lender, and repurchase the land within five years. The farmer may separately redeem the house and up to 40 acres from the rest of the land even after a foreclosure. Iowa 's farmers should beat a path to a lawyer's office before giving up any effort to fight foreclosure. Iowa 's procedures to protect against foreclosure are extensive enough that if a farmer has the will to hold on, there may often be a legal way to do so.
After fulfilling the vast number of prerequisites required under Iowa law, as previously described, a lender may obtain a judgment against the borrower for the full amount of the balance due on the loan. The real estate may then be sold under a general execution sale. Remember, the lender may not sue both for foreclosure and to collect on the note. So if the lender sues on the note, then, if and only if the sum found to be due is sufficient, the real estate can be sold to pay off the judgment. The sales are proper sheriff's sales. Once the property is sold, it may eliminate the loan balance or reduce it. If some part of the loan balance is left unpaid, the lender can still try to collect that part. Note that Iowa banned deficiencies on agricultural foreclosures until July 1, 1991 . Also, the judgment is only good for two years and may not
If a borrower goes into default and is sued by the lender, the borrower may file an answer admitting a default in whole or in part, and then ask for a moratorium if the default was due to such circumstances as a crop failure due to drought, flood, heat, hail, storm or other climatic condition, or due to infestation of pests. Under such circumstances, the court can extend the foreclosure date for up to one full year. The court must appoint a receiver to take care of the property in the meantime, and the original borrower is to be given preference over other choices as receiver. The receiver may apply rents and income in a statutorily defined order.
The governor of Iowa may declare a state of economic emergency, applicable to various types of property, such as agricultural property, or to be applied to all types of property. The declaration makes such property eligible for a moratorium continuance, which may last as long as one year. However, a lender can apply to the court and show good faith efforts to restructure the debt, and show the financial difficulties the lender is faced with if foreclosure is not granted. The lender may also show that the borrower has not paid interest on the loan. Upon weighing all these competing considerations, a court may terminate the moratorium which would allow the foreclosure to go forward. Only or continuance can be granted per mortgage instrument under the governor's moratorium provisions.