Saturday, October 24, 2020

What can I do to Avoid Foreclosure During the COVID-19 Pandemic?

If you are struggling to make your mortgage payments as a result of the COVID-19 pandemic, you should know that you are not alone. While recognizing that many other Americans like you are struggling does not always bring much comfort, it does mean that there may be more options that you can consider in order to avoid foreclosure. There are some options for homeowners with federally backed mortgages, and there may be additional options for homeowners who do not have government-backed mortgages. Even if you have no options through your lender or mortgage servicer, other possibilities might be able to help you to stay in your home during this incredibly difficult time.

If you are at risk of losing your home, you should seek advice from an Oak Park foreclosure defense attorney as soon as possible. The quicker we can begin working on your case, the better your chances may be to avoid foreclosure. In the meantime, the following are just some of the options you might have when it comes to avoiding foreclosure.

You Have Forbearance Rights With a Federally Backed or GSE-Backed Mortgage

As the Consumer Financial Protection Bureau (CFPB) explains, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides mortgage forbearance for federally backed and Government Sponsored Enterprise (GSE) backed mortgages. The federal law has to separate protections for homeowners with these types of mortgages:

  • Lenders are prevented from foreclosing on your home until at least December 31, 2020, and it is possible that those protections will extend into 2021; and
  • Homeowners can request and obtain an additional forbearance of up to 180 days if they have experienced a financial hardship as a result of the COVID-19 pandemic.

In order to be eligible for an additional 180 days forbearance, you will need to contact your loan servicer in order to request the additional forbearance. You will not face any additional fees, penalties, or interest beyond what is already scheduled. You also can request this additional forbearance without having to submit any additional paperwork beyond your claim.

Talk to Your Lender or Servicer About a Forbearance

Many banks granted forbearances for homeowners whose mortgages were not federally or GSE-backed at the start of the pandemic. Although many of those forbearances have expired, it is always possible that your lender or servicer will work with you on payments if you are experiencing a financial hardship and could even grant an additional forbearance.

Learn About Chapter 13 Bankruptcy Options

If you do not have any forbearance options and you are already at risk of foreclosure, one option that could benefit you is Chapter 13 bankruptcy. If you are eligible for Chapter 13 bankruptcy, the automatic stay can prevent the foreclosure process from going any further and can allow you to reorganize your debts and get caught up on your mortgage. A bankruptcy lawyer can tell you more about how this works.

Seek Advice from an Oak Park Foreclosure Defense Attorney

If you have questions about avoiding foreclosure, one of our experienced Oak Park foreclosure defense attorneys can assist you. Contact the Emerson Law Firm for more information.

See Related Blog Posts:
Coming Foreclosure “Wave” Will be Different From 2008
Foreclosure Surge: Question is Not When, But How Much?

Monday, September 7, 2020

Coming Foreclosure “Wave” Will be Different From 2008

If you own your home and have been struggling to make payments as a result of the coronavirus pandemic, you might have received some relief through the CARES Act or through other forbearance options for mortgages held by private lenders. Yet forbearance options are running out for many homeowners, and many more remain without work and the ability to make mortgage payments. As such, many homeowners could be at risk of foreclosure.

Based on the high rate of unemployment as a result of coronavirus shutdowns and the inability for many of those out-of-work homeowners to find meaningful employment, economic experts have predicted that we are likely to see a rise in foreclosure rates akin to that during the housing crisis and real estate burst that began in late 2007 and went into full force by 2008. By 2010, the foreclosure crisis largely had reached its peak—should we expect something similar a decade later?

Housing Analysts Say We Should Not Expect a Repeat of the Foreclosure Crisis

According to a recent article in, “industry professionals predict conditions won’t be nearly as bad as they were in 2008-2010” for a handful of specific reasons. We want to discuss some of those reasons with you. At the same time, we want to emphasize that foreclosure risks are real, and to underscore that you may have options to avoid foreclosure.

From loan modifications to Chapter 13 bankruptcy, an experienced foreclosure defense attorney in Oak Park can discuss the ways in which you may be able to prevent a foreclosure. However, it is important to seek help on the sooner side. If you wait too long, it may be more difficult or even impossible for you to keep your home.

Expectations for Forecloses and Losses Look “Mild” Compared to 2008-2010

Believe it or not, housing analysts say that the losses the federal government is expecting as a result of the coronavirus pandemic appear “mild compared to those in the Great Recession.” Specifically, the federal government is anticipating that Fannie Mae and Freddie Mac will experience “several billion dollars in loan losses.” Yet to put those numbers in perspective, those numbers are not “anywhere near the catastrophe” that occurred during the Great Recession.

One of the major reasons is that, prior to the coronavirus pandemic, there was not the same “frenzy of foolish lending, reckless borrowing, and rampant speculation [that] set the housing market up for a wrenching crash” more than a decade ago. Indeed, just before the pandemic led to the economic downturn, “credit standards remained tight, and the housing market was healthy.”

In addition, homeowners now have larger reserves of home equity, and the government “reacted relatively quickly and aggressively to the COVID recession,” according to the article.

Seek Advice From an Oak Park Foreclosure Defense Attorney

Are you struggling to make mortgage payments? Are you out of work as a result of the coronavirus pandemic? Do you have concerns about foreclosure and losing your home? You may have options to avoid foreclosure by discussing your options with one of the dedicated Oak Park foreclosure defense attorneys at our firm. Contact the Emerson Law Firm to learn more about how we can help you to keep your home when foreclosure is looming.

See Related Blog Posts:
Foreclosure Surge: Question is Not When, But How Much?
Long-Term Effects of Foreclosure

Tuesday, August 18, 2020

Foreclosure Surge: Question is Not When, But How Much?

The sharp economic declines brought about by the coronavirus pandemic do not show signs of improving significantly in the coming months. According to an article in Politico, the initial closures resulting from the spread of COVID-19 led to the “deepest recession in decades,” and recovery has slowed due to the recent spikes in coronavirus cases across the country. Indeed, as Fed Chair Jerome Powell explained, “the pace of the recovery looks like it has slowed,” and “the current economic downturn is the most severe in our lifetimes.” As the economy struggles to rebound—and indicators suggest that a full and quick rebound is unlikely—homeowners will struggle to make mortgage payments and will face foreclosure.

According to a recent report from DSNews, the question has become just how much of a foreclosure surge we are likely to see as opposed whether one will occur. In other words, more foreclosures are likely to happen, but the question is: how many?

Foreclosure “Surge” is Now Likely

The prohibition against foreclosures on federally insured homes expired on July 31, and there has been no indication that it will be extended. Accordingly, as the DSNews report underscores, the foreclosure surge now appears likely. Looking ahead to the coming year, an ATTOM Data Solutions study has “anticipate[d] worst-, middle-, and best-case outcomes for foreclosure rates.”

What does the worst-case scenario suggest? If Congress does not act quickly and provide additional relief for homeowners who have lost their jobs and are struggling to make their mortgage payments, “residential evictions due to delinquent loan payments could double or worse in the coming year.” In this worst-case-scenario, more than 500,000 homes would be in an “initial-foreclosure-notice phase” in less than a year.

Worst-Case Scenario is Not a Given

In all likelihood, the middle-case scenario might provide a better estimate of the likely number of foreclosures if the government does provide some relief. In that case, “about 225,000 properties next spring will land between initial-foreclosure-notice phase and final resale by lenders that have taken over properties.” However, the report emphasizes that, even if Congress extends the foreclosure moratorium, that action alone will not be sufficient to prevent foreclosures and could, in some scenarios, end up causing trouble in the long run. The report explains how “foreclosure moratoriums can bring short-term relief to a market in crisis,” but “they can be ineffective and even potentially harmful when used as a long-term foreclosure prevention treatment.”

While the worst-case scenario looks bad, it is certainly not a given. Some states are also more likely than others to see a doubling and tripling of foreclosure rates than others. Foreclosure rates in the Midwest, according to the mid-level scenario, would likely double. Other regions of the U.S. would see a bigger surge in foreclosures, with rates of foreclosure activity tripling, such as in the South and West, and in some Northeastern states.

Seek Advice from an Oak Park Foreclosure Defense Lawyer

If you are at risk of foreclosure, there are options to avoid foreclosure. An experienced foreclosure defense lawyer in Oak Park can speak with you today about your options for preventing foreclosure. Contact the Emerson Law Firm to learn more about how our firm can help.

See Related Blog Posts:

Long-Term Effects of Foreclosure

Foreclosure Moratorium Re-Extended

Thursday, July 16, 2020

Long-Term Effects of Foreclosure

Nobody who owns a home wants to risk losing it due to foreclosure. Indeed, if you are struggling to make your mortgage payments, you should get in touch with an Oak Park foreclosure defense attorney as soon as possible to find out about options for keeping your home. If you are still employed, you could be eligible to file for Chapter 13 bankruptcy, which ultimately can allow you to prevent a foreclosure from moving forward and to get back on track with mortgage payments. If you can, avoiding foreclosure is in your best interest. According to a recent study conducted by Stanford University economist Rebecca Diamond, “foreclosures can have devastating, long-term impacts.” To be sure, the long-term effects of a foreclosure can go far beyond the loss of a home.

Homeowners Who Go Through Foreclosure are Less Likely to Own Future Homes
What are some of the long-term impacts of foreclosure? According to the study, one of the most common is that homeowners who go through a foreclosure and lose their homes are less likely to own another home in the future. It is not simply out of a desire to avoid purchasing a home, but rather as a result of longer term financial difficulties. Indeed, “their living arrangements become less secure, and they default on other debts more often.”

Tenants can be Impacted
While we often think about foreclosure as involving residential homeowners who are using the property as a primary residence, landlords can also face foreclosure, and tenants can be negatively impacted. Although foreclosure does not result in a landlord losing his or her home, it can lead to tenant evictions, and tenants having difficulty finding another place to live on somewhat short notice.

On the whole, however, landlords who go through a foreclosure, and tenants who are also impacted, are both far less affected by foreclosure than homeowners who lose their primary residence. In the cases of primary residence foreclosures, those homeowners tend to have long-term financial problems after the foreclosure process is completed.

Considering Homeowners “On the Margins”
Given the economic difficulties that many people are currently facing due to the COVID-19 pandemic, the study emphasizes that it is also necessary to consider homeowners who are currently “on the margins.” These are the homeowners who are behind on mortgage payments and are at serious risk of foreclosure, but for whom foreclosure may not be imminent. With these types of homeowners, it is important to think through a variety of foreclosure defense options that can allow them to remain in their homes, and to avoid ending up in the long-term risk category of so many homeowners who do end up having their properties foreclosed.

Contact an Oak Park Foreclosure Defense Attorney
If you need help avoiding foreclosure, or if you have questions about how Chapter 13 bankruptcy may be able to prevent foreclosure, you should seek advice from an experienced Oak Park foreclosure defense lawyer. One of the advocates at our firm can speak with you today about your options. Contact the Emerson Law Firm to learn more about the services we provide to clients throughout the Chicago area.

See Related Blog Posts:

Foreclosure Moratorium Re-Extended

Bankruptcy and Home Foreclosure: What You Should Know

Monday, June 22, 2020

Foreclosure Moratorium Re-Extended

If you lost your job as a result of the COVID-19 pandemic and you are struggling to pay your mortgage payments, you may be able to breathe a temporary sigh of relief. According to a recent report in HousingWire, the Department of Housing and Urban Development (HUD) just announced that the federal Housing Administration (FHA) is going to extend its existing moratorium on foreclosures. Initially, the moratorium was set to expire in May and was extended until June 30. Now homeowners have additional protections with another two-month extension until August 31, 2020. We want to tell you more about the additional extension of the foreclosure moratorium and to provide you with information about options for preventing foreclosure.

FHA Will Extend Foreclosure Moratorium Until August 31, 2020
The recent announcement by HUD explains that the foreclosure and eviction moratorium from the FHA will be extended for a second time through August 31, 2020. However, it is important to understand that this moratorium does not apply to any homeowner with a mortgage. Rather, it applies to “homeowners with FHA-insured Title II Single-Family forward and Home Equity Conversion mortgages.” Other homeowners with different types of loans are not eligible for the extension on the moratorium and could be at risk of foreclosure if they do not make mortgage payments.

For those who are covered by the extended moratorium, what does the extension mean in practice? Mortgage servicers will need to “halt all new foreclosure actions and suspend all foreclosure actions currently in progress, excluding legally vacant or abandoned properties.” In addition, any properties that are FHA-insured and are designated as Single-Family properties will have an eviction moratorium, meaning that servicers will need to stop any evictions. That eviction moratorium does not apply to properties that are legally vacant or abandoned. The eviction protections in place apply to renters who are renting from a landlord with a federally backed mortgage.

Options if You are Not Eligible for the Foreclosure Moratorium
If you own a home that is not eligible based on the classifications explained above, you may still have options to avoid or stop a foreclosure. The CARES Act outlines certain mortgage forbearance options, which you should discuss with your mortgage servicer. To qualify for CARES Act protections, your mortgage will need to be federally owned or backed by one of the federal agencies or entities, such as HUD, the FHA, the USDA, the U.S. Department of Veterans Affairs, or Fannie Mae or Freddie Mac.

If your mortgage is not backed by the federal government, your mortgage servicer may still be willing to offer a forbearance for coronavirus-related hardship. If you cannot obtain a forbearance and cannot make your mortgage payments, it may be possible to work with a foreclosure defense lawyer on alternative options. You may be able to have your mortgage refinanced, and if necessary, you may be able to stop a foreclosure by filing for Chapter 13 bankruptcy. However, in order to qualify for Chapter 13 bankruptcy, you will need to be able to prove that you have income to make payments on a debt reorganization plan.

Seek Advice from an Oak Park Foreclosure Defense Attorney
If you have questions or need assistance avoiding foreclosure, an experienced Oak Park foreclosure defense lawyer can speak with you today. Contact the Emerson Law Firm to learn more about how we can assist you.

See Related Blog Posts:

Bankruptcy and Home Foreclosure: What You Should Know

Will Foreclosure Rates Soon Exceed Those of the 2008 Financial Crisis?

Sunday, June 14, 2020

Bankruptcy and Home Foreclosure: What You Should Know

What are the links between personal bankruptcy and foreclosure? Is there any risk of losing your home if you file for bankruptcy? You may have heard that some forms of bankruptcy can actually prevent foreclosure in certain circumstances. Accordingly, you may be wondering, if I want to stop a foreclosure, which type of bankruptcy should I file? There are some significant ways in which consumer bankruptcy and home foreclosure are interrelated. If you are struggling with debt and own your home, it is important to gain a clear understanding of the potential ties between bankruptcy and foreclosure.

Chapter 13 Bankruptcy May be Able to Stop a Foreclosure and Allow a Consumer to Stay in the Home
One of the most significant tools in a Chapter 13 bankruptcy is the automatic stay because it can allow a homeowner who is behind on mortgage payments to stop a foreclosure. While the automatic stay applies in any bankruptcy case, it is particularly important for consumers in a Chapter 13 bankruptcy case who are at risk of losing a home to foreclosure.

As you may already know, Chapter 13 bankruptcy is a “reorganization” bankruptcy under the U.S. Bankruptcy Code. As such, when a debtor files for Chapter 13 bankruptcy, the automatic stay prevents creditors or collectors from taking any additional actions on existing debt (including mortgage debt), and the debtor has the opportunity to reorganize debts in a repayment plan. The terms of the repayment plan usually last three to five years, and that plan gives debtors an opportunity to get back on track with mortgage payments. To be clear, the automatic stay can stop the foreclosure, and the repayment plan allows the homeowner to get back on track with mortgage payments to keep the home.

Chapter 7 Bankruptcy Cannot Prevent a Foreclosure
While Chapter 13 bankruptcy can stop a foreclosure and can allow the debtor to remain in his or her home, it is important to understand that Chapter 7 does not have the same ability. Chapter 7 bankruptcy is a liquidation bankruptcy, which means that any non-exempt debt will need to be sold (or liquidated) to repay creditors. Once the bankruptcy process is complete, usually in a number of months, eligible debt will be discharged. Given how the Chapter 7 bankruptcy process works, it will not be possible to file for Chapter 7 bankruptcy and expect to avoid a foreclosure and then remain in the home.

Illinois Does Not Have a Significant Homestead Exemption in a Chapter 7 Bankruptcy Case
While the Illinois homestead exemption may not have a direct correlation with foreclosure, it is important to know that, if you file for Chapter 7 bankruptcy—even if you are not at risk of foreclosure—you may not be able to keep your home. While some states have much higher homestead exemptions, Illinois only has a $15,000 homestead exemption (or $30,000 for a married couple that files for bankruptcy together). A bankruptcy lawyer can discuss the implications with you if you currently own a home and are considering Chapter 7 bankruptcy.

Contact a Bankruptcy Lawyer in Oak Park
If you have questions about bankruptcy and foreclosure prevention, one of our experienced Oak Park bankruptcy attorneys can speak with you today about your case. Contact the Emerson Law Firm for more information.

See Related Blog Posts:
Benefits of Filing for Bankruptcy
Reasons Why Filing for Bankruptcy Sooner Could Benefit You in the Long Run

Sunday, May 10, 2020

Will Foreclosure Rates Soon Exceed Those of the 2008 Financial Crisis?

If you are struggling to make your mortgage payment in Oak Park or elsewhere in the greater Chicago metropolitan area, you should know that you are not alone. While recognizing that thousands of other families in the U.S. are struggling with the risk of foreclosure during the economic downturn caused by the coronavirus pandemic will not pay your bills, it can be helpful to understand that consumer advocates understand this dangerous trend.

According to a recent article in HousingWire, some experts are predicting an oncoming wave of COVID-19 foreclosures that will surpass those of the Great Recession more than 10 years ago. At the same time, homeowners do have advantages and protections that they did not have previously. We want to say more about the recent article, and about some of the ways that homeowners affected by the coronavirus pandemic may be able to avoid foreclosure.

Healthcare Crisis Foreclosures Could Surpass 2008 Levels
It was not very long ago that the housing market crash of 2008 resulted in millions of home foreclosures. Between 2006 and 2016, experts estimate that about 10 million homes went through the foreclosure process. While that “freefall of the housing market nearly took down the entire U.S. economy” in a way that perhaps seemed like a once-in-a-lifetime occurrence, now the COVID-19 emergency is more than threatening to do the same. The reality is that millions of Americans have lost their jobs and cannot find new ones due to the pandemic and business closures. A wide variety of industries are experiencing effects of the coronavirus pandemic and the economic downturn, from blue-collar and manual labor jobs to white-collar professions. Currently more than 22 million people have filed for unemployment benefits, and HousingWire predicts that 15 million more will occur by its next report.

Currently, about 3 million mortgages nationwide are in forbearance due to the pandemic and job loss. Just as homeowners are unable to make their monthly mortgage payments, millions more could seek forbearances and alternatives to foreclosure in the coming weeks and months. These actions are taking place when lenders are restricting the kinds of loans they are offering and, in some cases, even the lenders are going out of business. All of these facts are leading experts to worry that we could ultimately see rates of home foreclosure that surpass those of the 2008 financial crisis.

Positive Numbers and Foreclosure Avoidance
Although tens of millions of Americans are without a job, there are some protections that did not exist during the 2008 foreclosure crisis. First, disaster relief money and more eligibility for unemployment claims has resulted in some people being able to make ends meet for the time being. In addition, a number of forbearance programs are currently in existence, allowing homeowners to delay making a mortgage payment for up to 12 months if they are experiencing a COVID-related hardship.

If you may be at risk of foreclosure, you should learn about forbearance options and discuss other potential measures with an Oak Park foreclosure defense lawyer.

Contact a Foreclosure Defense Attorney in Oak Park
If you are struggling to make your mortgage payment and are at risk of foreclosure, an experienced and compassionate Oak Park foreclosure defense lawyer can discuss your options with you. Contact the Emerson Law Firm for more information.

See Related Blog Posts:

Avoiding Foreclosure During the Coronavirus Pandemic

Foreclosures Suspended Due to Coronavirus