Friday, January 27, 2012

2011 Chicagoland Home Sales Rise Slightly

Chicago-area home sales were up slightly in 2011, the Chicago Tribune reports, but insiders in the real estate community are hardly optimistic about Illinois’ housing numbers.  The Illinois Association of Realtors explained that the Chicago-area experienced a 1.3% gain in existing home sales compared to 2010, but that sales within the city of Chicago dropped 7.2% from 2010, for a total of 17,715 homes sold.  However, 2011 ended on a high note, and that momentum has carried into the first few weeks of 2012—a hint of positive news, at least. 

Chicago-area housing sales were up in December 2011 due in part to nice weather conditions and low interest rates.  Recently, Freddie Mac reported that the average rate on a 30-year, fixed-rate mortgage hit a new record-low of 3.88%.  Overall, the Chicago area experienced a 17% rise in housing sales.  Sale volumes also rose in Cook County (12%), DuPage (15%), Kane (21%), Kendall (26%), Lake (20%), and Will (33%) last December.  Within the city limits, condo sales (5%) and single-family home sales (almost 8%) also rose.

Despite some positive change, the housing market is still struggling in some respects.  Our Oak Park foreclosure attorneys know that falling home prices are a serious concern in the Chicago area and across the country.  In 2011, the median home prices declined 11.9% for the Chicago area and 13.8% for the city.  For example, the median price for a condo in Chicago was $183,000 in December, down 18.7% from a year ago.  According to the Chicago Tribune, the median price for single-family homes also fell 1.7% to $135,000.  Economists have predicted that housing prices will not stabilize until consumers are more confident about their financial security.  And prices are not likely to rise until the supply of foreclosed homes diminishes. 

Real estate agents report that the drop in home prices is due in part to buyers’ interest in foreclosed and short sale properties.  A short sale occurs when a lender permits a property to be sold for less than the amount owed on a mortgage.  Therefore, the lender ends up incurring a loss, usually because the market has gone downhill and the property is now worth less than the value of the current mortgage.  Unfortunately, short sales do not necessarily release homeowners from some of their financial obligations, unless the lender and the borrower specifically agree.  On the other hand, short sales are often used as an alternative to Chicago mortgage foreclosure because the process mitigates additional fees and costs associated with foreclosure for both parties. 

Large backlogs of foreclosed properties mean that Oak Park and Chicago home prices are not likely to rise anytime soon.  An increase in distressed properties is expected as more foreclosed homes are placed on the market at discounted prices in the coming months.

The minor gains in housing market have generated cautious reactions in the real estate community, accompanied by modest predictions for the future.  The Oak Park and River Forest foreclosure defense lawyers at the Emerson Firm have been monitoring the state of the housing market for several years, and we know that while times continue to be tough, things are not as hopeless as they may seem.  Whether you decide that foreclosure or a short sale is right for you, or whether you want to fight to keep your home, we have the expertise to guide you through the process. 

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2011 Foreclosures Down, but Not All Good News for Chicago

Friday, January 20, 2012

GAO Report Finds That Vacant Foreclosures Burden Local Communities With Hefty Costs

A recent study issued by the Government Accountability Office (GAO) reports that vacant foreclosures across the country have risen 51% over the last decade, up from approximately 7 million in 2000 to 10 million as of April 2010.  Some states have experienced more drastic increases (over 70%) than others for a variety of reasons.  Thankfully, Illinois does not rank among the top 10 states with the highest foreclosure percentage increases.  However, our Oak Park and River Forest foreclosure lawyers know that neighborhoods in the Chicago area have been struggling with the problems generated by high foreclosure numbers.  The problem of vacant buildings has become so severe that Chicago and Cook County recently passed ordinances requiring lenders to bear the burden of maintaining their foreclosed properties. 

An article in DS News explains that while the focus traditionally has been on lenders, local governments, many of which are dealing with serious budget concerns and some of which are bordering on bankruptcy, also have been saddled with significant financial pressure from the rise in home foreclosures.  In conducting its analysis, the GAO sought to measure the causal effect of foreclosures on vacancy numbers, the types of costs associated with vacant properties, and the response of state and local governments to rising vacancies.  For example, the GAO found that Fannie Mae and Freddie Mac reimbursed servicers and vendors over $953 million for property maintenance costs in 2010.  But local governments also have experienced many unexpected expenses due to the foreclosure crisis. 

According to the GAO, other studies have found that vacant foreclosed properties may reduce prices of nearby homes by as much as $17,000 per property.  This costs municipalities millions of dollars in lost tax revenues.  Also, local governments must take on the expense of ensuring that their ordinances are enforced—that means extra staff, systems, and programs.  Public safety issues are also a problem, and vacant properties reduce the quality of life in Chicago neighborhoods.

Many reasons have contributed to the rise in vacant properties in big cities, including foreclosure rates, high unemployment, and declining populations.

In Chicago, our foreclosure defense lawyers know that efforts have been taken to minimize the costs and other negative effects associated with empty properties.  (See our post on new Chicagoland ordinances to hold mortgagees responsible for foreclosed properties here and our post on Chicago’s program to turn vacant condos into affordable rentals here).  Other cities have established incentive programs to encourage appropriate property maintenance or have created specialized housing courts to address vacant property and other housing issues.  Other efforts include data gathering to more accurately identify vacant properties and rehabilitation or demolition of vacant properties.

Local governments also have called for increased federal funding and greater regulation of servicers’ role in managing vacant properties.

Our Oak Park foreclosure defense attorneys work hard to protect homeowners from unscrupulous lenders, but as the housing market continues to struggle, the effects of fraudulent mortgage activity and irresponsible lending practices have extended so much further.  If you are interested in reading the GAO’s full report about the impact of property vacancies on local communities, it can be found online.

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Thursday, January 19, 2012

2011 Foreclosures Down, but Not All Good News for Chicago

The Chicago area experienced its lowest foreclosure rates in three years in 2011 according to a report released earlier this month.  Our Oak Park foreclosure attorneys hope that lower foreclosure rates are a good sign for the housing market, even if the lower rates are largely due to increased processing of investigations of foreclosures and more documentation requirements.  Even if the housing market continues to struggle, at least these new numbers perhaps signal a fairer foreclosure process rather than the speedy railroad job at the beginning of the crisis that left so many Illinois families reeling. 

However, the court ordered auctions of houses and repossessions by lenders rose in the last quarter of the year.  In the six counties in the Chicago area—Cook, DuPage, Kane, Kendall, Lake and Will—court ordered auctions of houses went up by 62 percent in the fourth quarter.  That is an increase to 6,112 houses from 3,766 houses in the third quarter.  The number of homes repossessed rose 11 percent over the previous year.  But the foreclosure filings still dropped overall.  Cook County’s foreclosure filings dropped 30 percent compared to 2010 and 21 percent compared to 2009.  DuPage County dropped 34 percent from 2010 and 20 percent from 2009.  Lake and Will Counties both saw their numbers drop more than 30 percent from 2010 and 20 percent from 2009, as well.

Illinois foreclosure proceedings still took a long time to process in county courts last year, and the processing time is increasing.  In the fourth quarter of 2011 it took 567 days to resolve a foreclosure.  Of course, an experienced Illinois foreclosure attorney can guide you through this lengthy process, if necessary.  Illinois is in the middle of the pack when it comes to foreclosure processing.  For example, in New York it takes 1,019 days—the longest foreclosure processing time in the country. 

Nationally, 2011 saw foreclosure filings drop 34 percent over the peak in 2010.  The United States overall had the lowest levels of foreclosure filings last year since the crisis started in 2007.  The national numbers last year were affected by the same issues as Illinois, though, perhaps artificially lowering the numbers because of investigations into severe problems such as “robo-signing.” (See our post on robo-signing here)

Experts believe that 2012 will see somewhat more foreclosures than 2011, but still significantly less than 2010.  The continuing resolution of these foreclosure investigations and documentation problems will bring the numbers back up, but the worst of the housing market crisis appears to be over. 

As Daren Blomquist, the spokesperson for Realty Trac noted, “The worst is behind us, but foreclosures are going to continue to impact the market for the next couple of years as they’re pushed through and listed for sale and disposed of.”  

Our Oak Park foreclosure defense lawyers know that many families will continue to need help with this process for many years to come.  Dealing with foreclosure is never easy, but it is made considerably harder when one tries to do it alone.  Help is out there.  Please contact our office if you’d like to learn more about how we might be able to help.

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Illinois Foreclosure Defense Lawyers Understand Current State of Chicago Housing Market

Friday, January 13, 2012

Chicago Program To Turn Vacant Buildings Into Affordable Rentals

Another year is here, but Chicagoland residents are still playing the waiting game, hoping the housing market will regain a modicum of stability.  Home prices in Chicago and other major cities recently hit record lows, reports an article in Forbes, pulled down by high foreclosure numbers.  The foreclosure backlog is projected to take years to clear.  Oak Park residents who are concerned about losing their homes should contact a qualified legal professional to learn more about Illinois foreclosure protection laws.

Some have predicted that struggling cities like Chicago should put their high numbers of foreclosed properties to good use by renting or selling them.  Doing so could stimulate development and rid neighborhoods of the numerous vacant homes that are dragging down housing prices.  As the Oak Park foreclosure defense attorneys at the Emerson Firm know, Chicago is doing just that.  The city is converting vacant condo buildings into affordable rentals by selling entire buildings to investors and developers who will rehab them.

The city’s vacant properties include entire buildings of empty condos in areas such as West Woodlawn, Austin, and Rogers Park, locations where there have been high numbers of condominium foreclosures.  Many condo buildings are already in the process of being converted into apartments.

The Chicago Tribune reports that the city is expected to fill its empty homes with residents via a plan that has been in the wings for two years.  Amendments effective in 2010 to the Illinois’ Condominium Property Act will allow cities to petition a Circuit Court to allow a receiver to sell a distressed building as a whole.  Owners of the units, usually lenders, will receive a fractional share of the proceeds from a sale after liens are erased.  The judge will take bids and then decide who may buy a particular property based on a number of factors, including price and the bidder’s financial resources, track record, and building plans.

There are many reasons for the present state of vacant Oak Park properties.  The River Forest foreclosure lawyers at the Emerson Firm routinely handle foreclosure defense cases and know that many homes are in their current state because of fraudulent mortgage activity.  According to the Chicago Tribune, other properties had legitimate developers who were financially stretched too thin, or who fell victim to the housing crisis and subsequently were unable to sell all the units in a building.

Regardless of the reasons for the current state of the vacant properties in Chicago, it is clear that a solution must be found.  Under the city’s plan, some use may be gotten out of the buildings instead of allowing them to go to waste.  Additionally, rehabbing the buildings and renting them hopefully will create much needed affordable housing.  DePaul University’s Institute for Housing Studies issued a report finding that almost 483,000 renters needed affordable housing in 2009, but only 303,000 rental units were considered affordable.

The overall goal of the city’s program is to get as many of Chicago’s vacant properties occupied as possible, which hopefully will help reinvigorate the housing market.

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Friday, January 6, 2012

Oak Park Foreclosure Attorneys Can Help You Decide If Foreclosure Is Right For You

When times are hard, the last thing most people want to think about is losing their home.  Unfortunately, for many Chicagoland residents the danger of mortgage foreclosure is an unwelcome reality.  Each Oak Park foreclosure defense attorney at the Emerson Law Firm know that there are many reasons for foreclosure, including unemployment, long-term illness, or injury.  Even though the prospect of foreclosure can seem daunting, a few simple tips can help you and your family protect your home.

1. Act Early: Homeowners have many options when faced with Illinois mortgage foreclosure.  The Federal Reserve recommends that consumers address their mortgage problems head on.  If you are not able to pay your mortgage or have already fallen behind on your payments, contact your lender or mortgage company immediately.  Contacting them as early as possible increases the chance that they will work with you to resolve any problems that arise.  It is best to explain your financial situation rather than attempting to avoid the problem.  If a lender is not willing to work with you, contact a Chicago housing counseling agency to find out more about the resources available to you.

2. Keep Records: It is also a good idea to have all of your original mortgage paperwork ready and to be familiar with it.  You should locate your original mortgage loan documents and review them before speaking with a lender or housing counselor.  It is helpful to gather information on your expenses, including food, utilities, car payments, insurance, and cable or phone bills in order to provide the lender with a realistic picture of your financial situation.  Such documentation may also be helpful if the situation progresses and you decide to fight your foreclosure.

3. Be Creative: Sometimes it also helps to be creative.  If you are worried about sticking to a mortgage payment plan, make a budget.  Doing so can help you determine if there are any extra costs that can be cut.  Lenders also may be willing to modify your loan terms if you ask them. 

On the other hand, you may decide that it is not possible to keep your home.  If that is the case, the Oak Park foreclosure lawyers at the Emerson Firm can help you consider your loss mitigation options—such as short sale, deed in lieu of foreclosure, or loan modification—and guide you through the process while simultaneously defending your foreclosure.  A short sale might be a good option if you are unable to sell your home for the full amount of the loan.  Your lender may be willing to accept the amount you receive for the selling price, even if it is less than the amount you owe.  However, there may be accompanying tax liability in such instances, so you should research all your options and speak with a qualified professional before making any decisions.  A deed in lieu of foreclosure permits you to “give back” your property to the lender.  The lender will then forgive the balance of your loan.  As with a short sale, there likely will be associated tax consequences, so you should speak with a qualified professional and make sure you are complying with the requirements laid out by the IRS.

Many homeowners are still struggling, and there is nothing shameful about asking for help.  The Emerson Law Firm routinely handles mortgage foreclosure and loss mitigation cases.  Helping Oak Park residents fight Chicago foreclosure is our business, and we know how to protect homeowners’ rights.

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Thursday, January 5, 2012

Illinois Attorney General Filed 50th Suit against Mortgage Rescue Scam

As 2011 was coming to a close, Illinois Attorney General Lisa Madigan filed her 50th lawsuit against a mortgage rescue scam.  The December lawsuit was targeted at scams which con homeowners by charging significant amounts of money in upfront fees promising to help the homeowner avoid foreclosure.   

As Oak Park foreclosure attorneys, we are proud that our Attorney General has established Illinois as the most aggressive state in the nation to combat this type of fraudulent scheme.  The 50 lawsuits have so far resulted in 28 injunctions against scam operations and court-ordered restitution of $2 million to affected homeowners.  Madigan has also issued 622 cease and desist orders to mortgage operators telling them to stop charging homeowners upfront costs for mortgage rescue services, which is illegal in Illinois.

These mortgage “rescue” consultants are nothing more than con men who claim that for a large fee, they can negotiate with the lender to try to save the home from foreclosure.  In reality, these con men take the money and run and the homeowner has wasted money that could have gone toward the troubled mortgage, often speeding up foreclosure proceedings instead of the promised “rescue”.  If you believe you are the victim of such a scam, an Oak Park foreclosure lawyer can help you understand where to start and what you might be entitled to under Illinois law.

In this 50th lawsuit, the Attorney General sued three companies- Acceptance Financial Corporation in Northbrook, Elite Outsourcing Services Inc in Midlothian, and International Embassy Realty Inc in Elgin- for taking more than $44,000 altogether from homeowners for promises to assist in negotiating a loan modification program from the lender.  The companies in reality did nothing.  The Attorney General’s office alleges that Acceptance Financial targeted mostly Polish and Russian immigrants and advertised in those languages on the radio for loan modification for an upfront fee.  Elite Outsourcing Services allegedly accepted at least 100 upfront fees from homeowners seeking loan modifications.  International Embassy allegedly targeted a Spanish speaking audience and told homeowners to stop paying on their mortgages to “speed up” the loan modification process, but in reality the conduct only sped up the foreclosure process for these homeowners. 

This lawsuit, filed in Cook and Kane Counties’ Circuit Courts, is seeking to shut down the three operations and get restitution for the scammed consumers.  It also seeks to ban the companies from providing these mortgage rescue services in Illinois and also to obtain civil penalties for violations of the Consumer Fraud or Mortgage Rescue Fraud Act.  This Act, which went into effect in 2007, was enacted to aide struggling homeowners at risk of losing their homes from unscrupulous behavior of such scam artists. 

Even in a stressful situation like facing foreclosure on your home, it is important to remain informed and vigilant against scams.  The old adage, “if it sounds too good to be true, it probably is” holds firm today.  If you are already the victim of one of these unscrupulous companies, learn about your rights under Illinois’s foreclosure protection laws.

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