Thursday, August 30, 2012

Is Foreclosure Settlement Already Helping Homeowners?

Many different programs, mostly sponsored by the federal government, exist to help homeowners who are struggling.  Our Oak Park and River Forest foreclosure lawyers know that one of the most high-profile attempts by state and federal officials to help struggling community members  involved the massive $25 billion national mortgage foreclosure settlement.  The initial lawsuit alleged various acts of misconduct on the part of the major lenders which led to serious problems for borrowers--often resulting in unfair foreclosures.  The settlement, made in February, was divided between the states and intended to provided a range of help to those homeowners affected.

But has it had any effect yet?

According to a story this week in the Chicago Tribune, some homeowners have already seen help as a result of the settlement.  Yet, sadly, half of those individuals are still losing their homes.

The story explains how, by the end of June, over 5,000 homeowners in the state receive various support, totaling $357 million as a result of the settlement.  An independent monitor is in charge of ensuring the settlement proceeds properly and that the banks pay their share.  The servicers reported on their own--a group that includes CitiMortgage, Ally Financial, JPMorgan Chase, Wells Fargo, and Bank of America--that they gave out $10.56 billion total between March and June nationwide.

This support came in various programs for homeowners, including short sale and deed-in-lieu programs.  More than half of the support was one of those two options.  It is important to note that short sales and deeds in lieu are situations where the homeowner sells to another or gives the deed back to the lender--they do not keep the home.  Other borrowers received support via loan modifications, principal reductions, and refinancing.  These options are superior for some, because they allow one to keep their home.  According to the Tribune report, state officials are hoping that in the coming months the support will include more modifications and re-financing so that more homeowners who want to stay in their home are able to stay.

All told Illinois was the fourth largest state in terms of support received as a result of the settlement.  A testament to the fact that our state was hit particularly hard by the housing crisis--so much so that we are still digging ourselves out.

Each Oak Park and River Forest foreclosure lawyer at our firm appreciate that the support provided by the settlement is important.  Yet, it is critical not to assume that this settlement and other programs somehow indicate that all is well in the local home- ownership world. Many are still struggling and in need of advocates to help them fight foreclosure or work out arrangements with lenders to get back on the right track.  If you or someone you know may be struggling in this way, take a moment to get in touch with our experienced Oak Park real estate lawyers to see how we can help.

See Our Related Blog Posts:   

Att. Gen. Madigan Announces $3 Million for Foreclosure Mediation Programs, but will They be Effective?

Wells Fargo Settles with Illinois and US for $175 Million

Friday, August 24, 2012

Foreclosure, Short Sales, & New Federal Guidelines

When local community members come to our office seeking help with their housing situation, there are sometimes various options on the table.  The River Forest and Oak Park foreclosure attorneys at our firm know that no two situations or goals are identical, and so a personalized approach is necessary when making an overall plan of action to deal with homeowner issues.

Of course one approach is to challenge the conduct of the banks that are seeking to foreclose on the home.  The law has very specific rules about what these institutions have to do to properly foreclose--if they do not act appropriately, they may not be able to take the home.   

However, at times there may be other ways that a homeowner can handle the situation.  In some cases it may be prudent to try to sell the home and move on--this may be particularly attractive when the home is deeply underwater (more is owed on it than it is worth).    A short sale may be worthwhile.

Short sales are notorious for the frustration they often breed--it may take months to get approval from all necessary parties in order to proceed.  Fortunately, our Oak Park short sale lawyers know that many changes have been underway the past few months in an effort to better facilitate short sales.  Many homeowners can take advantage of these opportunities to not only get out from an underwater home, but even receive relocation assistance.

For example, the
Wall Street Journal reported last week on new rule changes to help make short sales more efficient and realistic for a growing body of homeowners.  The new rules were announced by the Federal Housing Finance Agency and will apply to all homes backed by federal mortgage giants Fannie Mae and Freddie Mac.  

One change involves opening up short sales to those who have yet to miss a mortgage payment.  Some homeowners have been saddled by an underwater home, seemingly spending money for property that is worth far less than what it owed.  Yet, banks were often loath to accept a short sale when the borrower was current on monthly payments.  According to the new rules, which take effect at the beginning of November, even borrowers who are current may be able to take advantage of these opportunities.

In addition, the new rules place a cap on the amount of money that a second mortgage holders receive in the deal.  All lenders must approve a short sale before it goes through.  This presents a challenge when a home has multiple mortgages, because more than one lender must approve the sale.  Second mortgage holders often balk at these sales, trying to stall the process in order to get a larger share of the sale price.  The new rules seek to end the opportunity for those stall-tactics by placing a $6,000 cap on the amount they can receive.  The goal is for this to speed up the sale, and make it more feasible.

Other parts of the new rules seek to streamline the process--requiring fewer documents to be submitted before approval.  Also, those homeowners with various financial hardships--lost job, divorce, or death--may have an even speedier process to complete the sale and move on with their lives.

It will be interesting to see how effective these new rules are at helping homeowners get out from tough situations with a short sale.  In our area it remains crucial for residents to remember that they do not have to go it alone.  Take a moment to call our
Oak Park foreclosure attorneys to share your story and see how we can help.

See Our Related Blog Posts:

Job Transfer with an Underwater House

Distressed FHA-Backed Loans To Be Sold in New Foreclosure Reduction Plan

Tuesday, August 21, 2012

Mayor Emanuel Comes out Against Eminent Domain Plan for Underwater Mortgages

Each Oak Park foreclosure attorney at our firm understands intimately the complications of dealing with the mountain of underwater homes in the area.  Of course, the “Great Recession” had compounding effects--many lost their jobs (and ability to pay their mortgage) while house values plummeted.  Together that made many families unable to pay homes and many other owning homes worth far less than what they owed on them.  

We understand that solutions to the problem are different at the individual level and the government-level.  In other words, a solution to an underwater home issue for an individual homeowner is far different than a public official addressing the issue of thousands of underwater homes.   

Eminent Domain Idea
For example, one idea recently floating in the Chicago area was use of the government’s eminent domain power to take homes that are underwater and then refinance the mortgages.  The idea was pitched to local alderman by an out-of-state firm this week; though some are already calling the proposal a non-starter.

During the pitch meeting Mayor Emanuel told reporters that he was against the idea, noting that he “didn’t think it was the right way to address the problem.”  His concerns are shared by the Federal Housing Finance Agency which previously noted that it had “significant concerns” about using this government power in the aid of underwater homeowners.

Many aldermen have similarly voiced worry over the idea.  Yet, the informational meeting on the maneuver went ahead anyway, no doubt at a result of the need to at least consider any sort of new idea to help struggling homeowners.  Several years into the criss and many are still struggling.  The latest data suggests that nearly 1 in 4 homes in the city is underwater--totaling more than 100,000 borrowers.

The basic idea is somewhat straightforward.  The city would use its eminent domain power to seize the underwater property.  The mortgage would then be refinanced at a discount--written down to close to fair market value. The new loan would then be offered to the homeowner at a slightly higher amount than what it was purchased for.  The hope is that the monthly payment would then be lower than it is now with the homeowner retaining at least 5% equity.  The company which arranges the agreements would receive a set amount per mortgage and the city would only face administrative costs.

It remains to be seen if the Mayor’s comments are a sign that the proposal is dead-on-arrival.  At the very least, working through this sort of maneuver without approval from Emanuel is near-impossible.

No matter what action is or is not taken on a city or statewide level, please do not forget that options are available in your individual case. The Oak Park and River Forest foreclosure defense attorneys at our firm are here to help in any way necessary--from fighting the bank challenge to helping with a short sale.  If you are anywhere in our area and are fighting these issues please take a moment to call our office and see how we can help.   

See Our Related Blog Posts:

Attorney General Announces $3 Million for Foreclosure Mediation Programs, But Will They Be Effective?

Wells Fargo Settles with Illinois and U.S for $175 Million

Tuesday, August 14, 2012

Frustrated Cook County Residents Meet with County Officials over Foreclosure Woes, Possible Legislation

A crop of beleaguered citizens of the community met with County Board President Toni Preckwinkle and County Sheriff Thomas Dart, irritated by the ever–looming threats of foreclosure.  Furthermore, the homeowners called on county leaders to put in place a one year-stay on evictions, or a “one-year moratorium,” according to Steven Ross Johnson’s article

This past Thursday night, Preckwinkle and Dart received over a hundred individuals at the community meeting.  The county officials wished to give such homeowners an opportunity to voice their own experiences and troubles regarding foreclosure.  As many of us know, the Chicago area has blighted with abhorring foreclosure difficulties for the past several months.  Moreover, the Chicago Anti-Eviction Campaign, organizers of the event, intended to help explain how delaying the eviction process could provide some with much needed—albeit temporary—relief.  In addition to the one-year moratorium, the group called on Preckwinkle and other government officials to undertake a tour of local communities that have been heavily affected by the foreclosure crisis.

"We don't come here on our knees begging for a handout," said Keeanga-Yamahtta Taylor, an organizer. "We come here as fighters for the human right to housing."

Yet, county officials didn’t seem interested in fulfilling the demands.  Although sympathetically hearing each individual’s concerns, both Preckwinkle and Dart were hesitant to commit to any pleas of the audence.

"The main business of the county is not housing, unlike when I was alderman for 20 years," Preckwinkle said. "The main business of the county is health care and the criminal justice system."  Along with this statement is a video from the County Board President, as well as the Sheriff remarking on the night

Should the main business of the county be healthcare and criminal justice?  Chicago ranks #1 as the worst foreclosure city in the nation.  That means: On average, the foreclosure rate per household is higher than in any other municipality of the entire United States.  Cook County is starving for some sort of foreclosure relief.  Yet, as the community, the county, and the city are riddled with this foreclosure conundrum, Ms. Preckwinkle says it’s not her or the county’s “business” to deal with foreclosure issues.  This seems quite disturbing. 

Although, on two separate occasions, Thomas Dart has ordered a moratorium on evictions.  Both times, he was acting Sheriff.   These moratoriums lasted over a year and a half; therefore, Sheriff Dart is clearly not unfamiliar with such policies. 

As many of us know in our area, this foreclosure crisis is a complicated and convoluted issue.  The Oak Park foreclosure attorneys at our firm aid multitudes of individuals with troubles such as foreclosure.  If you are dealing with foreclosure, please consider giving our firm a call in order to help you traverse this difficult process.  

See Our Related Posts 

Thursday, August 9, 2012

July Numbers: Foreclosure Activity Down Almost 8% in Illinois

Although the country appears to be still reeling from the May spike, we look as though we are heading in the right direction.  For two consecutive months now, both the state and nation’s foreclosure activity has decreased according to RealtyTrac.  As many of us saw, May gave Illinois a shocking 29% increase in foreclosures from the previous month.  Yet, the numbers were down again in July posting a 7.7% monthly decrease for the state; this is in conjunction with June’s totals: A roughly 8.5% decrease.  The country saw just under a 3% decrease from last month and an astounding 10% annual decrease in all foreclosure activity —which includes default notices, auction-sale notices, and bank repossessions.  Yet, don’t be so keen to celebrate; we are still very much in trouble.
Although the Windy City still remains as “The Number One Foreclosure City in the Nation,” these numbers are marginally encouraging for Illinois and Chicagoland.  It appears that all relevant statistics display decreases in foreclosure activity, according to RealtyTrac.  On average, one in every three hundred eighty five houses foreclosed in July—a 10% decrease as compared to June’s numbers.  Furthermore, Cook County itself has witnessed over a twelve percent reduction in foreclosure filings.  

Yet, by no means do these numbers conclude success.  Illinois has moved up to the third worst foreclosure state in the country, behind just Florida and California.  The average household foreclosure rate for Illinois mentioned earlier pales in comparison to the national average: one in every six hundred eighty six homes.  Illinois remains as a foreclosure hot bed, mired in a seemingly unsolvable mess.  Moreover, Cook County’s rates are almost 130% over the national average.  Although the monthly differential brings positive news, the Chicago Tribune reports it is an astounding 37% increase as compared to July 2011.  37%!  As for the rest of the nation, California posted a horrific 42,081 houses in the foreclosure process for the month of July.  By no means are we out of the woods.

"Lenders are much less likely now than they were even a year ago or two years ago to repossess a property after they've started the foreclosure process," said Daren Blomquist, a vice president at RealtyTrac.

Clearly, the country and the state of Illinois still face foreclosure demons.  Foreclosure is, unfortunately, plaguing our nation.  Our Oak Park and River Forest foreclosure attorneys know that this is a complicated and intricate issue.  The Emerson Law Firm aids multitudes of individuals with  foreclosure troubles.  If you are dealing with a foreclosure, please consider giving our firm a call in order to help you traverse this difficult process.  

See Our Related Blog Posts:

Thursday, August 2, 2012

Fannie and Freddie Say No to Principal Reductions

According to a recent article from the Chicago Tribune, the two federally run finance companies Fannie Mae and Freddie Mac have rejected the mortgage loan forgiveness program.  The firms jointly said Tuesday that allowing principal reductions “would not make a meaningful improvement in reducing foreclosures in a cost-effective way for taxpayers.”  Both Fannie Mae and Freddie Mac have been operating under the authorization of the housing finance agency since the financial collapse of the autumn of 2008. 

In the beginning of the year, the Treasury Department announced that it would triple the incentive payments it gave mortgage investors that agreed to reduce outstanding loan balances as part of the government's Home Affordable Modification Program.  This attempt by the Department aimed at enhancing the employment of principal forgiveness.  Furthermore, the Treasury offered to extend those incentive payments to Fannie and Freddie.  And for the past several months, the housing finance agency had hinted at considering it.

Yet, the agency has disallowed principal reductions for borrowers whose mortgages are backed by Fannie Mae or Freddie Mac.  Tuesday’s decision is sure to affect many Americans, and Illinoisans, as the two firms own or guarantee more than 50 percent of outstanding mortgages, a market valued at $10 trillion.  During the first quarter, 3.7 percent of Fannie Mae's outstanding mortgages and 3.5 percent of Freddie Mac's were seriously delinquent, meaning payments were at least 90 days past due and foreclosure proceedings could be initiated.

The housing finance agency’s argument hinges on benefiting American taxpayers.  The agency’s acting Director Edward DeMarco stated “nearly all of this benefit [from principal reductions] is simply a transfer from the taxpayers to the enterprises, which would add to the over $188 billion in taxpayer support the enterprises have already received.”  Therefore, along his premise, these mortgage forgiveness programs will only hinder already financially ridden communities.  DeMarco wrote, "Under other reasonable assumptions, implementing [principal forgiveness] would actually increase taxpayer costs."

Yet, as many of us know: Chicago is one of, if not, the worst city in country regarding foreclosure rates.  Although DeMarco and the housing agency intend to meliorate taxpayers, this decisions looks to only set the presently miserable Chicagoland housing conditions back even further.  In the year's first quarter, almost 33% of Chicago-area homeowners with a mortgage were underwater, a percentage higher than the national average, according to housing data provider CoreLogic.  The firm also found that as of May, 10.4 percent of mortgages in the Chicago area were at least 90 days past due.  On top of all of this, a massive 357,000 Illinois homeowners with Fannie- or Freddie-backed mortgages are underwater.  Only three other states have more underwater mortgages with Fannie- or Freddie-backed loans.

Tom Feltner of the Woodstock Institute, a Chicago-based nonprofit research and policy organization, said that this decision "is extremely problematic for the Chicago housing market."

The housing crisis of 2008 has still left much of this country in shambles.  As illustrated here, solving the foreclosure process on both an individual and macroeconomic levels is a complex and convoluted task.  Yet, one fact remains:  Dealing with the troubles of foreclosure should not be done alone.  If you at all are experiencing any legal woes regarding home mortgages and foreclosures contact our Oak Park foreclosure defense attorneys right away.  You deserve to be defended--whatever your case may be.  And we can provide that aid for you.  

See Our Related Posts: