Friday, September 23, 2011

Struggling Chicagoland Homeowners May Be Able To Avoid Mortgage Foreclosure With “Hardest Hit” Loans

The Illinois mortgage foreclosure attorneys at the Emerson Law Firm know that many Chicagoland homeowners are hurting during these tough economic times.  Struggling Chicagoland homeowners who have been “hardest hit” by the economic recession may be eligible for a new loan that will help alleviate mortgage foreclosure worries.  Last week, the Chicago Tribune reported that underemployed or unemployed homeowners may be eligible to obtain aid from a new federal fund that will enable them to stay current on their mortgages.

Illinois, along with seventeen other states and the District of Columbia, was selected as a recipient of mortgage relief funds under the “hardest-hit” program, which President Obama announced in February 2010.  The goal of the initiative is to help homeowners living in states most impacted by the economic decline.  The selected states were chosen because state unemployment rates were higher than the national average or state home values had declined more than 20 percent. 

The initiative allocated $345 million in federal funds among the selected states.  Then the selected states were provided with some latitude in deciding the best way to ultimately distribute the funds to struggling homeowners.  In Illinois, the “hardest hit” loan program is run by the Illinois Housing Development Authority (IHDA).  According to the Chicago Tribune, the Illinois initiate is designed to aid residents whose incomes have fallen by at least 25 percent.  The initiative provides a 10-year, forgivable loan to bring those residents current on delinquent mortgages and then keep them current on their mortgages for up to 18 months.

The “hardest hit” loans differ from more traditional loan modification because they provide qualified homeowners with “absolute relief,” according to Mary Kenney, executive director of the IHDA.  Instead of missed mortgage payments and fees being added to the overall mortgage amount, the mortgages are made current.  This provides struggling Chicago homeowners with the relief they need to move forward, so that hopefully they can begin to catch up on debt—rather than falling further into debt—and begin to rebuild their savings and their lives. 

Our Oak Park foreclosure defense lawyers realize that the economic downturn has been hard on millions of Americans, including thousands of Illinois residents.  Our attorneys are experienced in foreclosure defense and will aggressively defend your rights.  Illinois foreclosure law frequently changes, however, so it is imperative for struggling homeowners to be aware of legal changes that affect their rights.  If you have questions or concerns about your mortgage foreclosure defense, please reach out to a qualified legal professional to learn more.

To see whether you qualify for a “hardest hit loan, please see the IHDA’s website for more information: basic eligibility requirements (also posted on the IHDA’s website) include:

     The property must be located in Illinois 
     The household must have a documented income reduction of 25% due to unemployment or underemployment through no fault of its own 
     Household income must be at or below 120% of the area median income 
     Principal loan balance must not be more than $500,000
     Household liquid assets cannot exceed 3 months of mortgage payments
     Property must be the primary and only residence of all borrowers/owners
     Property can be a 1-4 unit building, providing the household resides in one unit
     Homeowners must carry a fixed or adjustable rate loan.  Interest-only or negative amortization loans are not eligible.
     The current servicer of the mortgage must agree to accept payments
     Applicant(s) must not have been convicted of a mortgage-related felony in the last ten years
     Available HHF assistance is sufficient to cure the delinquency and make required forward payments, if necessary to satisfy program guidelines.

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