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

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