On Tuesday, I spent the day at the Richard J. Daley Center. I had three cases up, and some significant lag time between them, so I had time to observe some rather long foreclosure calls.
Many pro se litigants were surprised that they were being called into court. The most common thing I heard was, "But I'm in a loan modification, why are they trying to foreclose?" The judge can't really say too much without breaching his or her own ethical rules. Judges cannot give legal advice from the bench, they also can't necessarily explain the intricacies of the law when they have 100 cases on their morning call.
Here's the reality of it: the loan modification is not going to stop the foreclosure process until it becomes permanent. The bank can choose whether to proceed with the foreclosure, but will usually hold off until it decides whether it is going to issue a permanent modification.
This means that you could do four consecutive three-month trial modifications, never be approved for a permanent modification, but find yourself facing foreclosure after a year of silence from the courthouse. Many people assume that the lack of correspondence means their case has been dismissed or is no longer active. This isn't the case.
For instance, in Cook County, after the case management date (the date listed on your summons), the case will be "removed from the call." This means that no new hearing dates will be set until a party to the case sets a hearing date, generally on a motion. The case isn't gone, it's just on hold until someone blinks first. If you're working on a loan modification, your lender may hold off doing anything until it determines what it wants to do with your loan.
Many people feel that they have a right to the modification. This is also untrue. Your loan is a contract. That contract contains provisions that govern how it can be modified. Every single one likely contains language stating that both parties must agree modify the contract. If the bank chooses not to modify the contract, it is within its rights to do so. This is why the banks keep the foreclosure cases live -- they don't want to reinstate or refile cases, which increases their costs. They want to hedge their bets.
Is this fair? No, not really. Is it legal? Yep, it sure is. Is it morally right? That's up to you to decide.
If you are seeking a loan modification, and there is an active foreclosure case pending against you, stay on top of the case. There is no substitute for plain old due diligence. If you cannot afford a foreclosure attorney, then make use of any resources available in your county.
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