Foreclosure Scams in Illinois: The Warning Signs

Why owners in a foreclosure case get targeted

Foreclosure filings are public. That means an owner whose case has been filed becomes findable, and a steady stream of mail, calls and door knocks follows. Most of it is ordinary business. Some of it is not, and the patterns are consistent enough to list.

This article is part of our guide to foreclosure in Illinois. We are a private buyer of houses, not a counselor and not a law firm, so treat this as a description of patterns rather than as advice about your case. The offices named at the end are the ones that can act.

The single most useful habit: slow down. Almost every pattern below depends on the owner deciding quickly, alone, without showing the paperwork to anybody.

The patterns worth recognizing

A fee paid up front for help with the loan. Money changing hands before anything is delivered, for a service about the mortgage itself, is the oldest pattern there is. Free help exists, and it is genuinely free.

A request to sign a deed before a closing. A deed is the document that transfers the property. Signing one outside a closing, without a title company, without a settlement statement and without an attorney reading it, hands over the asset and leaves the debt behind. A real purchase happens at a closing, with a title company handling the money.

An offer that lets the owner go on living there after signing it over. This arrangement has a bad history in Illinois, which is why the law treats it carefully. If somebody is proposing it, that is the moment to put the paperwork in front of an attorney.

Instructions not to talk to the servicer or to open the mail. Nobody with a legitimate interest in the property benefits from an owner being uninformed. The servicer and the court are the two parties whose paperwork decides what happens.

A company that presents itself as connected to the government, the court or the lender. Ask directly, in writing, who they are and what their relationship to the case is. Legitimate parties answer that question easily.

Pressure that arrives with a deadline the person on the phone invented. Your case has real dates. They are on the documents you were served and in the court file. A date somebody says out loud is not one of them.

Blank spaces in a signed document. Never sign a document with blanks in it, and keep a copy of everything you sign, on the day you sign it.

Illinois Legal Aid Online publishes a plain-language explainer on avoiding the scams that target owners in foreclosure, and it is a better first read than anything a stranger hands you.

What a legitimate purchase offer looks like

We buy houses, so we will be direct about what the ordinary version of our own business looks like from the seller's side. Compare anything you receive against it:

• A written contract that names the buyer, the property and the price.
• Earnest money held by a title company or an attorney, not by the buyer.
• A closing at a title company, with a settlement statement the seller sees before the day.
• What is owed against the property paid from the sale proceeds at closing by the title company.
• No fee charged to the seller for receiving or considering an offer.
• No objection to the seller taking the contract to their own attorney.

An offer that cannot survive an attorney reading it is telling you something. Our guide to selling a house as-is in Chicago sets out how a direct sale compares with a listing, and what the summons in a Cook County case means covers the paperwork that starts a case.

Where free help actually comes from

HUD-approved housing counselors. Counseling from a HUD-approved housing counseling agency is free, and the counselor's job is the owner's situation rather than a transaction. HUD publishes a directory of approved counselors.

Legal aid and the court's own resources. Illinois courts and legal aid organizations publish self-help material and run help desks. An owner in a case is entitled to use them.

An attorney. For a document that transfers property or changes a loan, an hour of an attorney's time is inexpensive against the asset.

Where to report one

The Illinois Attorney General's consumer protection division takes complaints about consumer fraud, including schemes aimed at owners in foreclosure. Reporting matters even when the owner did not lose money, because a pattern gets acted on and a single incident usually does not.

Keep what you have: the letter, the envelope, the number that called, the name used, the document you were asked to sign. A complaint with documents attached is a different thing from a complaint that is only a memory.

Frequently asked questions

Is it a bad sign if a buyer contacts me after my case is filed?

Not by itself. Court filings are public and businesses of every kind read them, so contact is normal and says nothing either way. Judge the offer by what is in it: a named buyer, a written contract, earnest money held by a third party, a title company closing, and no fee to the seller.

Somebody offered to pay my arrears if I sign the house over. Is that legal?

That structure is exactly the kind of arrangement Illinois law scrutinizes closely, and the paperwork needs a lawyer before a signature, not after one. Take the document to an attorney and ask them what it actually does, including what happens to the debt.

I already signed something. Is it too late?

Not necessarily, and the sooner an attorney sees the document the more options there tend to be. Gather every page you signed and every communication about it, and get it in front of a lawyer quickly rather than waiting to see what happens next.

If selling is one of the paths you are weighing

Selling a house as it stands to a private buyer is one option among several. Working with a housing counselor, defending the case, reinstating the loan or listing with an agent are all still on the table, and which fits depends on numbers only you have.

Fair Value Investments is a private buyer purchasing for its own account. If you want to see what a direct sale would look like as a figure, our page for owners in a foreclosure case explains how we look at a property in this position. Take whatever number you get to an attorney, a counselor or an agent, and compare it.

Important notice: Fair Value Investments (a d/b/a of Probate Professionals of America, LLC) is not associated with the government, and our service is not approved by the government or your lender. You may stop doing business with us at any time and may reject any offer. If you stop paying your mortgage, you could lose your home and damage your credit rating. We do not provide foreclosure-rescue, loan-modification, or credit-repair services and cannot promise to save your home or stop a foreclosure. For free help, contact a HUD-approved housing counselor at 1-800-569-4287 or consumerfinance.gov/find-a-housing-counselor.

About this article: it is general information written by a home buyer, not by a lawyer or a housing counselor. Fair Value Investments (a d/b/a of Probate Professionals of America, LLC) is a private real-estate investor and home buyer purchasing property for our own account. We are not a licensed real estate broker, not a law firm, not a lender, and not a government agency, and nothing here is legal, tax, or financial advice. Any offer is made at our discretion after we evaluate the property; a cash offer, if made, may be below market value. You are free to consult your own attorney, tax advisor, or a licensed real-estate professional before deciding. There is no fee to receive an offer and no obligation to accept.