The Homeowners Rights Act and Notice to Homeowners in Foreclosure

If you are being foreclosed, the Homeowners Rights Act (Public Act 095-0961) applies to you. Under this act, which took effective at the start of 2009, lenders must attach a Homeowner Notice to residential suits filed in Illinois. The Homeowner Notice should advise homeowners of the options available to them — i.e. homeowners have the option to (i) have the loan reinstated if they can bring it current within 90 days, (ii) sell the home, or refinance the loan to pay the loan off within the applicable redemption period, and (iii) collect surplus funds if the bank forecloses and then sells the home for a profit. Additionally, the Homeowner Notice must clearly state how the homewoners may contact the lender to discuss a workout package or demand a payoff amount. The Homeowner Notice should also ask the homeowners to consider seeking legal assistance.

What happens if your lender violates the Homeowners Rights Act and does not provide you a Homeowner Notice? Well, you can petition the judge in your case to award you damages for violating the act. You can also receive attorneys’ fees and costs if you prevail in the foreclosure suit, a counter-claim, or a motion related to the act. The purpose of the act is not to penalize lenders, but rather to give homeowners clear notice of their rights and options, especially since many homeowners are not aware of what steps they can or should take once a foreclosure suit has been filed.