What is a Consent Foreclosure?

If your lender has already filed a foreclosure action against you, the Illinois Mortgage Foreclosure Law provides an additional remedy: the consent foreclosure. A consent foreclosure is just what it sounds like. In exchange for the lender agreeing to waive any deficiency, you consent to a judgment of foreclosure being entered against your property. Title to the property vests in the mortgagee without conducting a sheriff's sale.

Unlike a deed in lieu of foreclosure, this remedy is available even if you have multiple liens against the property. So long as those lien holders do not object to the consent foreclosure, the procedure has the effect of voiding those liens. However, the consent foreclosure does not terminate any personal liability on the debts that correspond with any junior liens. At one point in time, a simple letter to the lender's attorneys was all that had to be done to secure a consent foreclosure.

Some lenders are now requiring that borrowers list their home for 90 days and that they submit financial documentation before the lender will accept a consent foreclosure. As is the case with many loss mitigation strategies, defending against the foreclosure in state court is a key component to making a consent foreclosure work. Some lenders will realize that litigating the foreclosure will take a long time and agree to the consent foreclosure to cut their own expenses.

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