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Illinois Counties

State Auction Process of Illinois

 

Illinois is a tax lien state. This means that if a property owner fails to pay their property taxes, the county treasurer may sell the lien at a public auction. The highest bidder at the auction will become the holder of the tax lien. The holder of the tax lien has the right to collect the delinquent taxes from the property owner, and they may also foreclose on the property if the taxes are not paid.

The tax lien process in Illinois is governed by the Illinois Property Tax Code. The process begins when the county treasurer determines that a property owner has not paid their property taxes. The treasurer will then file a notice of tax lien with the county clerk and recorder. This notice will give the property owner a certain amount of time (usually 60 days) to pay the delinquent taxes and remove the lien.

If the property owner does not pay the delinquent taxes within the specified time period, the county treasurer may sell the lien at a public auction. The highest bidder at the auction will become the holder of the tax lien. The holder of the tax lien has the right to collect the delinquent taxes from the property owner, and they may also foreclose on the property if the taxes are not paid.

The property owner has a redemption period of 2-2.5 years after the date of the tax sale to redeem their property. During this time, the property owner can pay the delinquent taxes, plus interest and fees, to clear the tax lien and regain ownership of their property.

If the property owner does not redeem their property within the redemption period, the holder of the tax lien may be able to obtain a tax deed to the property. This means that the holder of the tax lien will become the legal owner of the property.

Here are a few things to remember about the auction process in Illinois-

1. Auctions and Sale Lists: Tax sales are typically handled at the county treasurer’s office and are held toward the end of each year. Tax sale lists are usually available through local newspapers and some county websites. Some counties offer an enhanced list, but it’s important to clarify the details and ensure it’s worth the cost.

2. Registration and Bidding: Many sales require advance registration, and in-person bidding is often required. Some counties may have slightly confusing processes, such as online registration.

3. Bid Down Penalty Rate: Illinois uses a bid-down process for the penalty rate. The bidding starts at the maximum allowable penalty rate of 18% and works its way down. The winning bidder is the investor willing to accept the lowest return on their investment and receives the lien in exchange for their agreed-upon interest rate. The penalty rates can be as low as zero or 0.1% in ultra-competitive markets.

4. Penalty Payment Frequency: It’s important to note that the penalty is payable every six months in Illinois, not annually. So, if the winning bid is an 8% penalty, you’ll actually receive 16% if it’s paid at month number 12, which is significant.

5. Total Amount Due: The total amount due at the auction includes past-due taxes, interest, and fees specific to the property.

6. Petitioning for Tax Deed: If the lien is not redeemed within the redemption period, the lien holder must petition the circuit court for a tax deed after fulfilling their legal obligations.

Foreclosures in Illinois

When a borrower in Illinois defaults on a mortgage, lenders have several options available to foreclose on the property.
1. Judicial Foreclosure: To initiate a judicial foreclosure, the lender must provide a notice of intent to foreclose to the borrower and any other parties entitled to receive notice under Illinois statutes, at least thirty (30) days before the court’s judgment of foreclosure. If the court rules in favor of the lender and issues a notice of sale, the sale will be conducted according to the terms specified in the notice, provided they meet the minimum standards outlined in Illinois statutes. The sale can be conducted by the sheriff or any judge within the county where the property is located. After the foreclosure sale, the borrower has no right of redemption.

2. Deed in Lieu of Foreclosure: In this option, if the borrower has defaulted on the mortgage and the lender agrees, the borrower can voluntarily transfer the property’s deed to the lender, effectively terminating their interests in the property. If the lender accepts the deed, they are not allowed to pursue a deficiency judgment against the borrower afterward.

3. Consent Foreclosure: With this type of foreclosure, the court enters a judgment that grants absolute title of the property secured by the mortgage to the lender, satisfying the mortgage. After this type of foreclosure judgment, the borrower has no right of redemption, and the lender cannot seek a deficiency judgment.

Quick Facts

– Judicial Foreclosure Available: Yes
– Non-Judicial Foreclosure Available: No
– Primary Security Instrument: Mortgage
– Timeline: Typically 210 days
– Right of Redemption: No
– Deficiency Judgments Allowed: Yes

County-specific links

Following is the list of websites for each county specific auction.
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