SPRINGFIELD — To protect buyers, lenders and homeowners, State Senator Robert Marwick has advanced legislation that would lay out regulations for online foreclosure sales.
“Losing a home through foreclosure proceedings is one of the most difficult experiences a person can face,” said Martwick (D-Chicago). “This legislation both permits and sets regulations for online foreclosure sales, which can ensure the best possible outcomes for people facing this difficult financial stress.”
The measure would allow online foreclosure sales to be conducted online, in-person or both, and would require the method be included in the notice of sale. Further, the measure includes requirements for a proper online sale including allowable fees, registration and identification requirements, and the bidding procedure.
Historically, judicial foreclosure sales take place at the local courthouse, but over the past few years, there has been a rise in online sales and unregulated third-party entities offering this service. This lack of regulation can result in bad actors manipulating the auction process and can endanger user’s data security.
Online sales can offer a number of benefits over in-person courthouse sales. These sales provide flexibility and transparency, allowing interested buyers to bid on their own schedule and in a more accessible way for those unable to travel to the courthouse. It also provides information to potential bidders beyond what can be provided in a newspaper advertisement, allowing bidders to conduct due diligence on the property.
“Online foreclosure sales will increase the number of bidders, which will provide a higher sale price for the property and reduce the possibility of debt remaining for the homeowner,” Martwick said.
Senate Bill 2919 passed the Senate Wednesday. It now goes to the House for further consideration.
