Cook County Anticipates Wave of Foreclosures and Evictions

The COVID-19 pandemic is wreaking havoc across the U.S. and the world as a menace to public health, but it is important to remember that the pandemic is also devastating businesses and consumer finances. Millions of Americans have lost their jobs as a result of the pandemic, and many of them have not been able to obtain employment given virus surges, business closures, and health risks. Moreover, many of the people who have lost their jobs due to COVID-19 have also faced substantial medical bills from coronavirus hospitalizations. As such, foreclosure risks are very real. According to a recent article in the Chicago Tribune, Cook County is anticipating a wave of foreclosures and evictions, and is putting a plan in place to help ensure that Chicago residents still have a place to live when the pandemic eases.

While county-wide programs may be able to help certain homeowners in Chicagoland, it is critical to seek advice from an experienced Oak Park foreclosure defense attorney if you are facing foreclosure. We may be able to help you stop the foreclosure and to help you get back on track with your mortgage payments.

What Cook County Proposes

Cook County is launching a program designed to help suburban Cook County residents avoid evictions from their homes, according to the Chicago Tribune article. Consumers advocates recognize that another foreclosure “wave,” potentially similar to what happened in 2008, could be coming. The county’s Early Response Program is designed to provide information and potential relief to debtors in Cook County.

But will any kind of program to temporarily negotiate with landlords or banks be effective in the long run?

Mortgage Delinquencies Rising in the Chicago Area

Chicago and the surrounding suburbs have not yet seen a marked increase in foreclosures, but rising mortgage delinquencies suggest that a foreclosure wave is looming, according to an article in Chicago Agent. Indeed, as that article explains, a new CoreLogic report suggests that temporary “forbearance measures are keeping foreclosures down despite increasing numbers of homeowners falling behind on their mortgages in Chicago and in other cities.” More specifically, that report showed that, “in the Chicago-Naperville-Elgin . . . metropolitan area, 7.5% of mortgages were at least 30 days past due in August and 5% were in serious delinquency.” The report defined a serious delinquency as being late by 60 to 89 days on a mortgage.

Although the recent foreclosure rate in Chicago is down to only 0.5%, that number does not take into account the possibility of foreclosure on the 7.5% of homes that are in delinquency and ultimately could end up in foreclosure. The report underscored how the low rate of foreclosure is not likely to last as forbearance options come to an end and mortgage delinquency rates rise. The Chicago area currently has one of the highest mortgage delinquency rates in the country in terms of metropolitan areas, behind only the metropolitan areas of New York, Miami, Las Vegas, and Houston. What is particularly concerning is the high rate of mortgages that are currently in serious delinquency. Without quick action, many of those homes likely will end up in foreclosure.

Contact an Oak Park Foreclosure Defense Attorney

Ultimately, if you need help with foreclosure defense, you should speak with a consumer protection advocate who has experience with foreclosure defense strategies. One of our Oak Park foreclosure defense attorneys can help. Contact the Emerson Law Firm today.


See Related Blog Posts:

What Can I Do to Avoid Foreclosure During the COVID-19 Pandemic?
Coming Foreclosure “Wave” Will Be Different From 2008

Banks Are Making Progress with Mortgage Relief Efforts

Have you been paying close attention to federal efforts to deal with the foreclosure crisis?  A recent article in the Chicago Tribune suggests that there’s good news: U.S. banks appear to be on track with mortgage relief.

Earlier this week, we referred to the 2012 settlement intended to reduce foreclosure problems and mortgage abuses.  In fact, recent Illinois Supreme Court rules reflect upon some of the criteria in this federal-state settlement in which the top five U.S. banks agreed to fund consumer relief and resolve allegations related to bank misconduct to the tune of nearly $20 billion.  While the state Supreme Court rules are likely to produce quicker results in our state, it looks like federal actions to address foreclosures are having a positive impact.  What does this mean in practical terms for homeowners in Illinois?    

Terms of the Settlement

Last February, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial agreed to pay almost $20 billion, most of which “was earmarked to help distressed borrowers stay in their homes.”  

According to Reuters, settlement agreement funds generated through short sales can only count partially in the banks’ fulfillment of this financial agreement.  Short sales are home sales in which the bank avoids foreclosing on a property by agreeing to take a lesser amount for the property than what the borrower owes on his or her mortgage.  For example, if a borrower owes $500,000 on her mortgage, in a short sale, the bank might agree to take $400,000 in order to avoid foreclosing on that home.  Typically, homeowners prefer short sales to foreclosures, and the short sales usually end up costing banks less in the long run, too.

But, in working to speed foreclosure relief, one of the important long-term goals of the settlement includes limiting the number of short sales.  The point of relief efforts at the federal and state levels is ultimately to keep borrowers in their homes.

Given that short sale funds can only count for a small part of the banks’ financial obligation to borrowers, the settlement agreement was intended to increase principal reductions, meaning financial assistance for borrowers that would help them to keep their homes.  Principal reductions can include loan modification or refinancing help.

What Have the Banks Done So Far?

North Carolina Banking Commissioner Joe Smith is the watchdog who oversees the 2012 agreement.  He recently indicated that he is “encouraged by the consumer relief piece of the settlement,” and that he’s “satisfied” with the infrastructure for the banks to work within, although there’s always more work to do.

In terms of successes, several of the banks indicated that they were “on track” to meet their financial obligations by the end of 2013, with some as early as this spring.  According to records in Reuters and the Chicago Tribune, more than 320,000 borrowers have received assistance to stay in their homes.  This relief came in the form of loan modifications, refinancing help, and some loan forgiveness.  Smith reported that the banks have given $45.8 billion in relief to homeowners thus far.

However, a large percentage of that money “came in the form of short sales.”  While Reuters praised the banks’ efforts thus far, it reminded its readers that the banks must do more to fulfill their agreement. Smith emphasized that the banks need to “improve their compliance with the servicing standards laid out in the settlement,” since he’s continuing to see complaints about how the banks address problems with loans.

Are you an Illinois borrower who may benefit from some of this relief?  If you’re currently concerned about paying your mortgage and keeping your home, an experienced foreclosure defense attorney can explain how state and local relief programs can help you.

See Related Blog Posts:
Loan Modification Plans May Be Falling Short
Foreclosures in Illinois Near Top of Nation in 2012