Facing foreclosure is extremely difficult at any time of the year, especially when the homeowner does not have any options for finding a new place to live and has a family to support. At the Emerson Law Firm, we know how devastating it can be to learn that you are at risk of foreclosure, and we also know how important it is to take steps in order to prevent the completion of a foreclosure. Even if you cannot remain in your home, you may be able to sell your property quickly without taking the impact on your credit that a foreclosure would have. In addition, you may be able to work out an agreement with the lender so that you will not still owe a significant amount of money on your mortgage and will not face legal action from the lender.
Whether you are currently facing foreclosure and it appears imminent, or you are behind on your mortgage payments and have concerns about your options for the near future, our experienced Oak Park foreclosure defense attorneys can discuss potential options with you.
File for Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy, if you are eligible, can stop the foreclosure process before the holidays and give you an opportunity to catch up on your mortgage debt. A Chapter 13 bankruptcy is often the best way to avoid foreclosure and to remain in your home.
Consider a Short Sale
If Chapter 13 bankruptcy is not a possibility for you, you should speak with an attorney about a short sale. With a short sale, you must get the lender to agree, and you will need to find a buyer for the property. How does this work? A short sale involves selling your property for less than what you owe on the mortgage but for an amount agreed upon by the bank. Then, with assistance from your lawyer, you can have the lender agree to forgive any remaining debt (i.e., the amount remaining when you subtract the purchase price of the house from the amount you owe on the mortgage). While a short sale will not help you stay in your home, it can allow you to avoid the credit consequences of a foreclosure, and you may be eligible to buy a home again soon.
Find Out About a Deed in Lieu of Foreclosure
While it is often less appealing than a short sale, if your lender will not agree to a short sale or if a short sale does not seem possible or likely for other reasons, you may be able to consider a deed in lieu of foreclosure. With a deed in lieu, as it is commonly described, you will sign over your home to the bank in return for the bank agreeing to stop any foreclosure proceedings. Depending upon your circumstances, you may be able to work with an experienced foreclosure defense lawyer to reach an agreement with the bank, where they will forgive the mortgage debt you owe so that you will not face a lawsuit in the future.
Contact an Oak Park Foreclosure Defense Lawyer Today
If you are struggling to make mortgage payments and want to learn about options to defend against foreclosure or to stop foreclosure before the holidays, our experienced Oak Park foreclosure defense lawyers can help. We have years of experience representing homeowners in foreclosure defense cases, and an advocate at our firm can speak with you today about your circumstances. Contact the Emerson Law Firm for more information about how we can assist you.
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Showing posts with label foreclosure defense in oak park. Show all posts
Showing posts with label foreclosure defense in oak park. Show all posts
Friday, November 25, 2022
Tuesday, October 29, 2013
“Vampire” Foreclosures in October
It’s almost Halloween, and RealtyTrac has released a new report in which it coined the phrase “vampire” foreclosures, according to a recent article in CBS MoneyWatch. What are vampire foreclosures? Basically, it’s a term that describes properties that have gone into foreclosure and have actually been seized by the bank, but are still occupied by the original owners. Did you know this was happening in Illinois and across the country? It may sound unlikely, but RealtyTrac estimates that about 47 percent of bank-owned homes actually fall into the category of “vampire” foreclosures. And in some of America’s larger cities, that percentage is even higher. Chicago is actually one of those places, where “vampire” foreclosures account for about 65 percent of bank-owned homes in the city.
Real estate information companies continue to report on foreclosures in Illinois and throughout the country. Sometimes these companies can discuss the foreclosure process and its aftermath in terms that aren’t especially clear. Do you have questions about foreclosure or about how the real estate market is likely to affect you? It’s never too early to contact an experienced Illinois real estate attorney.
Vampires, Zombies, and the American Housing Market Recovery
Earlier this year, we told you about “zombie” foreclosures. What are zombies when it comes to the housing market? Basically, zombie foreclosures are those where the homeowner abandoned the property during foreclosure—no one’s living in them, but they’re still homes, in a sense. What’s the deal with the proliferation of “undead” language when it comes to describing foreclosures?
For many commentators, the foreclosure process involves a lot of properties that seem to be metaphorically between stages of life and death. Most of these properties had been homes to families, and they still bear traces of that life. In addition, many of these foreclosures are going to have to “come back to life,” so to speak, when they’re revitalized on the market. According to Daren Blomquist, the vice president of RealtyTrac, the “zombies will eventually have to come to market,” as will the “vampires.”
Why do so many of these properties exist? In many ways, the high number of distressed properties is misleading. According to Blomquist, “this distressed inventory is artificially being held back so that in the short-term, it’s helping boost the home prices and the housing recovery in general.” However, Blomquist explained that when these properties do return to the market, we might need to anticipate a drop in house prices and a delay in housing recovering. After all, as Blomquist said, “these homes are going to have to hit the market. They’re not going to just disappear.”
How Many Vampires and Zombies are Out There?
According to RealtyTrac’s numbers, there are about 250,000 “vampire” properties nationwide, and about 150,000 “zombies.” Together, that’s about 400,000 houses that are “poised to hit the market,” a number that represents close to 10 percent of current home sales.
The number isn’t strikingly overwhelming, as Blomquist noted, but they could pose particular problems in “markets where there’s a high concentration of these homes.” Do you have questions about foreclosures in the Chicago area? It’s essential to have an experienced foreclosure defense lawyer on your side. At the Emerson Law Firm, we have significant experience handling foreclosure issues across the state of Illinois and can speak to you today about your case.
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Friday, October 25, 2013
Strategic Defaults Aren't Worth the Trouble?
Have you been thinking about a strategic default? Do you currently have a mortgage that’s owned by Fannie Mae or Freddie Mac? According to a recent article in the Chicago Tribune, Fannie and Freddie are starting to get serious about homeowners who have the money to make their monthly loans payments but decide to walk away from their mortgages. Since the housing crash, homeowners have been electing to walk away from mortgages in which they owe more than the house’s current market value. As a result, the homes go through the foreclosure process and are sold at auction. However, foreclosure sales often don’t generate enough money to cover the homeowner’s loan balance, and they can be liable for the remaining amount in a deficiency judgment.
What Exactly is a Strategic Default?
You might have heard the term “strategic default” since the collapse of the housing market. In short, it’s a situation where a borrower decides to stop making payments on his or her loan. While strategic defaults can occur during any economic period, they’ve been numerous in the last five years. The housing crash caused the market value of homes across the country to drop dramatically, leaving mortgage borrowers in situations where they owed a lot more money on their home loan than their house was even likely to garner on the market. In other words, homeowners owed more on their loans than the market value of their property. As a result, many of these borrowers began to simply walk away from the property, allowing it to go into foreclosure—a “strategic default.”
However, this is a big problem for Illinois homeowners. Specifically, what happens to a borrower when his property sells for less than what he owes on his loan? As you might imagine, the lender can be out thousands of dollars in these situations. Depending on which state you’re in, lenders may be able to go after a borrower for additional funds that the lender can’t get back in a foreclosure sale. In Illinois, lenders can legally go after homeowners for deficiency judgments when the foreclosure sale garners less money than what the borrower owes on the loan.
Fannie and Freddie Haven’t Held Defaulters Accountable
Recently, data has shown that Fannie and Freddie have been generating significant profits. However, these “government-sponsored enterprises” historically haven’t taken substantial efforts to hold defaulters liable for the money they owe on their mortgages. According to the article in the Chicago Tribune, Fannie and Freddie “haven’t done a particularly good job at pursuing deficiency judgments,” and the Office of the Inspector General at the Federal Housing Finance Agency (FHFA) isn’t happy about this.
According to the FHFA, they’re going to ensure that Fannie and Freddie “clean up their acts.” What does this mean for consumers? In short, if you’re considering a strategic default on a Fannie or Freddie loan, it means that those government-sponsored enterprises are going to go after you. The Chicago Tribune explained that “going after strategic defaulters is big money.” Indeed, Freddie Mac has lost out on nearly $4.6 billion from deficiency judgments since 2008. While Freddie might not have been able to recover the entire amount (given that many homeowners actually had no money left to make their mortgage payments), the problem is that Freddie didn’t even consider trying to recover those funds.
If you think those numbers are staggering, Fannie Mae is even worse. By the end of 2012, Fannie owned at least 105,000 foreclosed properties, which had then been valued at $9.5 billion. The key for deficiency recoveries is acting quickly. States that allow lenders to pursue deficiency recoveries—including Illinois—have specific time windows in which those lenders are allowed to go after the money.
Now, FHFA is new requirements for Fannie and Freddie that will “manage their deficiency collection process,” ensuring that strategic defaulters aren’t simply allowed to walk away from a loan. If you have questions about how the FHFA’s rules and policies are likely to affect you, contact the licensed Illinois foreclosure defense lawyers at the Emerson Law Firm to discuss your case.
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Monday, October 21, 2013
Home Loan Modifications On the Rise
Has the Illinois foreclosure crisis ended yet? While consumers across the country continue to wonder when home sales and neighborhood upkeep will return to normal, many homeowners continue to struggle to make their mortgage payments. However, recent figures suggest that more of these homeowners are taking advantage of mortgage modifications before allowing their homes to fall into foreclosure. According to a recent article in DSNews.com, mortgage modifications are on the rise.
Do you have questions about how to avoid foreclosure in the Chicago area? Could a loan modification help your family with the monthly mortgage payment? An experienced foreclosure defense attorney can answer your questions today.
Data Shows Increased Mortgage Modifications
As of the end of August, DSNews.com reports that mortgage servicers had completed 67,000 mortgage loan modifications. That brings the total number of mortgage loan modifications for 2013 up to 580,000. This figures includes significantly more mortgage loan modifications than in 2012. In fact, according to data collected by HOPE NOW, which is a voluntary private-sector alliance, more families are entering into mortgage loan modifications than there are foreclosure sales. Indeed, “year-to-date loan modifications outpace foreclosure sales by about 142,000.”
Of the mortgage modifications completed in August, about two-thirds were proprietary modifications, while about one-third were modifications that were completed through the Home Affordable Modification Program (HAMP), which is run through the federal government. In addition to an increase in mortgage modifications, HOPE NOW’s data also showed a strikingly high number of short sales across the country. According to Eric Selk, the executive director of HOPE NOW, that means that homeowners are beginning to realize that they have more options than they used to believe, and many can avoid foreclosure even if they’re having trouble making mortgage payments. Selk said, “the bottom line is that there are more tools for consumers than ever before to handle mortgage challenges.” According to Selk, these new market tools are making homeownership something that’s beginning to be sustainable again.
Foreclosure Sales Remain Static—How Long Will Recovery Take?
While the data reported by DSNews.com shows hope for homeownership with the increased number of mortgage modifications, there hasn’t been much of a change when it comes to foreclosure sales. According to the article, the number of foreclosure sales has remained pretty static from month to month, at about 60,000. However, this number might be a bit misleading—many homes have been in the foreclosure process for months, and thus the monthly number of foreclosure sales might simply reflect a backlog of properties.
Indeed, actual foreclosure starts appear to have decreased over the summer, “from 102,000 in July to 101,000 in August.” In addition, according to DSNews.com, “60-plus-day delinquencies declined 2.5 percent to 2.18 million.”
Since the housing crash, a significant number of homeowners have been able to avoid foreclosure, with 5.4 million obtaining proprietary modifications and about 1.26 million obtaining modifications through HAMP since 2009. It’s important to know that these solutions to avoiding foreclosure are available to Illinois families. Are you concerned about making your monthly mortgage payment? Do you have questions about avoiding foreclosure? It’s never too soon to speak to an experienced foreclosure defense attorney. Don’t hesitate to contact the dedicated advocates at the Emerson Law Firm.
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Monday, September 30, 2013
HUD Delays “Dual Agency” Short Sale Ban
Last week, the U.S. Department of Housing and Urban Development (HUD) postponed a dual agency ban on FHA short sales and deeds-in-lieu of foreclosure transactions, according to Realtor Mag. You may remember reading about this ban back in July, when HUD issued a letter to mortgage servicers making clear that dual agency transactions wouldn’t be allowed on any pre-foreclosure transactions as of October 1, 2013. What does that mean, exactly? In short, the ban would effectively “prevent real estate professionals from representing both buyers and sellers” in these transactions.
As you might imagine, the National Association of Realtors (NAR) was up in arms over the potential ban. Indeed, the NAR lobbied vehemently against the HUD policy. As such, it looks like the NAR may be claiming a victory here, as HUD indicated last week that “it would be reissuing its July guidance to servicers” and would also “be removing the dual agency language” from that guidance.
As the real estate market continues to rebound, many people across Illinois and the country will be thinking about purchasing short sale properties. How will the changes to the ban affect these potential homeowners? In short, a change to the guidance is likely to make the process easier for both the buyer and the seller, since real estate agents will be able to continue representing both parties in these transactions. If you have questions about buying a short sale or general questions about the housing market, don’t hesitate to contact an experienced real estate attorney today.
Timeline of the HUD Dual Agency Ban
According to DSNews.com, “the HUD prohibition had first been outlined in a July letter to mortgage servicers describing new anti-fraud requirements for short sales and deed-in-lieu of foreclosure transactions.” The new guidance, HUD emphasized, was intended to “prevent fraud and abuse in pre-foreclosure sales,” as the HUD Inspector General had observed conspicuous signs of fraud and abuse in many of these transactions.
The new guidance would have significantly limited the role of real estate professionals in pre-foreclosure sales. Naturally, the NAR objected to the HUD policy at the outset. Gary Thomas, the NAR President, drafted a letter to HUD that emphasized the organization’s reasons for opposing the policy. Thomas explained that HUD never provided any statistics or reports that depicted evidence of any short sale frauds or abuse by real estate agents. In his letter, Thomas stressed that “NAR takes fraud very seriously . . . . If there is evidence of fraud by our membership, we would like to be part of an effort to develop policies that effectively address these issues.”
The letter, according to DSNews.com, also emphasized that the new HUD policy would prevent real estate agents and brokers from effectively serving their clients. For instance, homeowners face a greater risk of foreclosure if they can’t find a real estate agent who has specialized knowledge about short sales to list their homes. Given that HUD has indicated that it won’t be enforcing this policy as of October 1, it looks like the NAR won the fight. However, not all consumer advocates are happy about HUD’s shift in position.
Does NAR Control HUD?
In an article released by Consumer Advocates in American Real Estate (CAARE), consumer advocates emphasized its concern about the influence NAR might have within HUD. The report drew up a timeline, explaining how HUD decided to lift its ban on dual agency after engaging in talks with the NAR.
We’ll have to wait and see if HUD continues to see fraud and abuse problems in pre-foreclosure transactions after electing to life the ban on dual agency. In the meantime, the experienced real estate lawyers at the Emerson Law Firm can answer your questions today. Don’t hesitate to contact us.
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Monday, September 23, 2013
More Homeowner Support On the Way in Illinois
The Illinois hardest hit program will soon be drawing to a close. Indeed, the deadline to apply for this federally funded program is September 30th, a date that Illinois set back in July based on the numbers of people likely to require financial assistance. Now, the state is realizing that more homeowners may require government help after the program ends, according to an article in the Chicago Tribune.
What was the hardest hit program and how will its absence affect Illinois homeowners? If you have questions or concerns about the hardest hit program coming to an end, the experienced foreclosure defense attorneys at the Emerson Law Firm can discuss your case with you today.
A Quick Reminder: The Hardest Hit Program
You might remember that the hardest hit program began in September 2011 when the Obama administration worked to provide relief to homeowners in states that were especially affected by the housing market crash. What were the aims of the program, exactly? It offered homeowners 10-year forgivable loans if they could meet certain eligibility criteria. These loans then would allow them to “bring past-due mortgages current and make monthly payments for up to 18 months” while they worked to “get back on their feet,” reported the Chicago Tribune.
How much were the loans for? When the program started, the loans were capped at $25,000, but by April 2012 the cap increased to $35,000. With the increase in the potential loan amount, the hardest hit program gradually “widened the pool of potential participants because it offered more money to help seriously delinquent borrowers become current on their loans.” And in many cases, it worked. According to Illinois’ report to the Treasury Department, more than fifty percent of the homeowners who applied for assistance through the hardest hit program received it. As of June in Illinois alone, that totals more than 7,000 people and nearly $122 million in funds. So it looks like the hardest hit program has been successful by the Treasury Department count. But what’s being done now that the program is drawing to a close?
Additional Illinois Measures to Aid Struggling Homeowners
You might reminder that Illinois Governor Pat Quinn signed a bill to extend the foreclosure grace period last June. That bill originally went into force in 2009 and was intended to give homeowners a 90-day grace period to work out a plan to avoid foreclosure. Quinn extended that bill, the Homeowner Protection Act, through year 2016. With the bill extension, homeowners will be eligible for that 90-day grace period for at least the next several years.
What else? The Illinois Building Blocks Program is on the rise. It’s an initiative to “encourage eligible homebuyers to purchase vacant properties in 15 depressed communities by offering mortgage financing and $10,000 down in payment assistance.” According to the Illinois Housing Department Authority (IHDA), about 250 homes have already been sold through the program, and another 427 people have plans to buy through Building Blocks.
The IHDA is also keeping tabs on mortgager service improvement. According to Mary Kenney, the IHDA executive director, Illinois has seen some progress. For instance, loan modifications through the federal government have effectively assisted many families in the state. At the same time, however, Kenney emphasized that the state government plans to “continue to help struggling homeowners,” and that the IHDA “is trying to evaluate how it can assist in a continued recovery of the state’s housing market.”
Do you have questions or concerns about the housing market in Illinois? Or are you having difficulties with your monthly mortgage payments? An experienced foreclosure defense attorney can assist today. Don’t hesitate to contact us.
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Friday, August 30, 2013
How Will Fannie Mae and Freddie Mac Account for Future Losses?
According to an article in the Chicago Tribune, a recent government report raises concerns about the ability for Fannie Mae and Freddie Mac to account for future losses. The two large companies, which were seized by the government in 2008, have delayed write-offs of delinquent mortgages in order to save money in the short term. However, experts worry that the two companies won’t be able to provide sufficient funds to the government down the road.
A lot of these details can seem confusing, but they could have a significant impact on housing market recovery. In other words, if Fannie and Freddie don’t actually have the profits it looks like they have now, that could spell trouble for housing recovery across the country. We’ll try to break down the important points about this report and explain how they could affect Illinois residents in the future.
Mortgage Write-Off Rules
According to the inspector general for the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, the companies have been “avoiding billions of dollars in potential long-term losses by delaying a requirement that they write off more of the delinquent mortgages they own or back.”
Over a year ago, Fannie and Freddie were supposed to change their accounting procedures to mirror those used by banks that write off delinquent mortgages. However, they haven’t implemented that rule yet, and its implementation has actually been delayed until the beginning of 2015. Experts say that three years is a shockingly long time to wait to implement this rule.
The new FHFA rule would require Fannie and Freddie to “write off losses on single-family home mortgages that are more than 180 days overdue.” Right now, they don’t write off these mortgages until there’s a foreclosure. Jon D. Greenlee, an FHFA official, indicated that “implementing the rule could potentially require them to charge off billions of additional dollars.”
Why does it matter? In short, “an increase in write-offs could eat into the profits posted by the two companies as the housing market recovers.” In turn, that profit shortage would “affect how much in dividends they could pay to the government on the bailout money.” Recent news reports have shown Fannie Mae posting profits and paying billions to the U.S. government. According to the FHFA, those kinds of profits and payments might be a result of limiting write-offs.
Senator Bob Corker, a Republican from Tennessee, indicated, “it’s possible that the situation at Fannie and Freddie isn’t quite as rosy as some have come to believe over recent months.”
Government Backing, and the Future of Fannie and Freddie
Commentators emphasize that, regardless of profits or losses, Fannie and Freddie are only able to generate profits because their work is backed by the government. In other words, they make housing recovery tenuous no matter how they’re making money. Indeed, Senator Corker explained that “we should all remember that these two entities wouldn’t generate one penny without the government guaranteeing their transactions, a reality that underscores the need to move to a stronger system of housing finance.”
Fannie Mae indicated that it has set aside $53.1 billion in loss reserves since the end of June, in anticipation of eventually implementing the new rule. Regardless, President Obama and other lawmakers have questioned whether Fannie and Freddie should remain open for business or whether the housing finance system should undergo a complete overhaul, which would eliminate the companies.
In the meantime, it will be especially important for Fannie and Freddie to set aside enough funds to cover losses from mortgages that eventually will have to be written off. If the companies can’t continue to use profits to pay the government, housing recovery could be threatened for families in Illinois and across the country. If you have questions about how the housing market affects you and your family, or if you’re one of the many people who remain at risk of foreclosure, an experienced foreclosure defense lawyer can help. Contact the attorneys at the Emerson Law Firm today.
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Wednesday, August 14, 2013
Homeownership Benefits and the Housing Crisis
Since the housing crisis began, the Joint Center for Housing Studies at Harvard University has been conducting research on the perceptions of homeownership among the American public. Is buying a home still worth the stress and hassle? Is it still a primary tenet of the so-called “American Dream”? According to a recent report released by the Center, the “housing crisis does not appear to have had any major long-term effects on Americans’ perceptions of homeownership.”
If the Center’s report reflects the opinions of a majority of us across Illinois and the country, that’s good news for the housing market. If more people seek out homeownership, we can continue to see the real estate market rebound, according to an article in DSNews.com.
However, it’s important to know that not everyone is in the clear. Many people in our country continue to struggle to pay their mortgages, and they face the threat of foreclosure. If you or a loved one are at risk of foreclosure, an experienced foreclosure defense attorney can help. The lawyers at Emerson Law Firm also have extensive knowledge and experience with real estate and foreclosure matters and can answer your questions today.
The Joint Center for Housing Studies
Although the Center is based at Harvard University in Cambridge, Massachusetts, its work is important for states throughout the country. So what does the Center do? Primarily, Harvard and MIT created it in the late 1950s to address policy issues connected to the shifting American demographics in the postwar years. Now, it’s supported by the Ford Foundation, and it seeks out research that connects directly to “housing’s critical role in the economy and in communities.”
Earlier in August, for instance, it convened a symposium that focused on “sustaining homeownership for low-income and minority families.” The symposium featured information from both scholars and practitioners, seeking to bring together research and praxis. Each discussed the values of homeownership and emphasized how important it is for our economy that Americans continue to think about purchasing homes.
Social Benefits of Homeownership
The Center’s research report, entitled Reexamining the Social Benefits of Homeownership After the Crisis, explains that “no extraordinary efforts will be needed to attract American households back into the housing market.” The report suggests that homes are still considered a good financial investment, even though a significant number of homeowners lost their homes through foreclosure or have taken hits to their credit standings. Even with the “dramatic loss of equity and the high foreclosure rates” over the past years, the Center determined that Americans still think buying a home is preferable to renting one, and most are willing to make that investment at some point in the near future.
The report also emphasized the sense of security that comes with homeownership. Although many Americans haven’t felt secure with high mortgage payments and the effects of the housing crash, the Center believes that “the long term cultural preference for owning seems to have weathered the recent housing crisis.” The research will continue, and the Center says that it needs to do more to determine the connections between the actual and the perceived benefits of homeownership.
For many Americans, homeownership may again be a possibility. For others, the effects of the crash continue to linger. If you have questions about foreclosure or about real estate in Illinois, don’t hesitate to contact the experienced attorneys at the Emerson Law Firm today.
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