Can I Force My Lender To Respond To My Short Sale Offer?
Prior to January 13, 2012, the answer to that question would have been, "No." However, a new provision of the Illinois Mortgage Foreclosure Law changes that answer.
On January 13, 2012, Governor Quinn signed Illinois Senate Bill 1259 into law. The bill requires that lenders respond to a short sale offer within 90 days. Although the bill does not stay the foreclosure case while the offer is pending, it states that lenders "must" respond within 90 days. Presumably, if a lender does not respond within those 90 days, the borrower could bring a motion before the judge hearing the foreclosure case in order to compel a response.
While this is not an earth-shattering development, it does provide some certainty for homeowners attempting a short sale in Illinois. This new law is not the only legal protection for homeowners seeking a short sale. Under the federal Making Home Affordable program, some homeowners can seek a short sale as part of the Home Affordable Foreclosure Alternatives (HAFA) program.
Under HAFA, lenders are already required to respond within 90 days to a valid short sale offer. HAFA also offers more protection than a conventional short sale. In a conventional short sale, the homeowner remains liable for the difference between the loan balance and the sale price. In a HAFA short sale, once the sale is completed, the now-former homeowner is completely absolved of any further liability to the lender. HAFA also provides for deeds in lieu of foreclosure. This means that a borrower who attempts a HAFA short sale may be able to convert to a deed in lieu if the sale falls through.
Regardless of whether you attempt a conventional or HAFA-based short sale, it is always important to consult with a Chicago consumer attorney before attempting it on your own.