Current Housing Recovery Only Temporary?

Despite recently rising home prices that suggest an improvement in the market, data from Radar Logic insists that the factors underlying the perceived financial recovery “will not lead to sustainable price gains.”  If Radar Logic is right, then its data will be important to understand the limitations of financial recovery and other issues facing the housing market in Illinois.

What is Radar Logic?

Radar Logic is a self-described technology-driven data and analytics business that provides “a daily ‘spot’ price for residential real estate in major U.S. metropolitan areas.”  It’s primarily known for producing “Radar Logic Daily Prices,” which provide information for the company’s monthly housing market reports.

Notably, Radar Logic also “provides the tools and support needed to power the Residential Property Index market.”  You may have heard of this index, which is trademarked as “RPX.”

Recent Data and Price Gains

According to an article in DSNews, the forces that are driving the housing market increase is only temporary.  In March, Radar Logic’s home price index “showed a 13.1 percent year-over-year again.”  The data points to a number of reasons that the ricing price trend won’t last, but the primary reason is that the market will soon become saturated with supply—again.    

In other words, we currently have rising prices and limited supply, which makes it look like financial recovery is in the works, but that limited supply is likely to lead back to the oversaturated market that defined the years of the real estate crash.

In April of 2013, there were approximately 1.9 millions single-family homes available for sale (a number that excludes condominiums and townhouses).  This may seem high, but it’s actually strikingly low compared to the number of houses on the market in July 2007, a point that represents the peak of the housing boom.  In fact, in July 2007, 3.4 million single-family homes were available for sale.

However, there are a number of factors at work that, according to Radar Logic, will lead to market saturation in coming months.  While we’ve been reading that there’s currently a limited supply of homes on the market, this is only a temporary issue.  And when it’s resolved, so to speak, financial recovery will stymie across the country.  The recent report points to some of the current supply constraints that will ease as prices continue to rise.  These include low and negative equity, seller psychology, and building activity.  

To begin with, homeowners with negative equity are now able to list their properties since prices are rising, and this will add to the overall supply in the market.  Seller psychology will play a big role as sellers begin listing their homes as a result of the rising price trends, thus oversaturating the market.  And finally, data from the Census Bureau shows that building activity “is picking up again,” with huge increases in building permit requests.

These factors, combined with the fact that “demand is not expected to last,” can mean a quick halt to financial recovery in Illinois and across the country.  In fact, “recent evidence actually suggests profitability in the single-family market is already disappearing.”  As a homeowner, it’s important to stay current with your mortgage payments and to know the trends in the real estate market if you’re considering selling your house.  If you have questions about real estate, homeownership, or avoiding foreclosure, an experienced foreclosure defense lawyer can discuss your options with you today.

See Related Blog Posts:

American Financial Recovery—It is Only for the Wealthy?

Home Prices Rise, But Can You Find a Seller?

Community Organization Seeks to Revitalize Chicago Neighborhoods

The Southwest Organizing Project (SWOP), a nonprofit group committed to community organizing, is striving to reclaim Chicago’s Southwest side.  Its recent community-based campaign, known as “Reclaiming Southwest Chicago,” is seeking funding from the National Foreclosure Settlement Awards in order to rebuild communities that were especially “hard-hit by the housing crisis.”  

A recent article in the Chicago Tribune praised the nonprofit group for its work in our city.  The story emphasized the group’s broad reach in areas negatively affected by foreclosures, and noted that the group was even recognized nationally last month when it received a MacArthur Award for “Creative and Effective Institutions.”  SWOP received the award because of its success in “empowering the community to help itself.”

According to the MacArthur Foundation’s mission statement, it “supports creative people and effective institutions committed to building a more just, verdant, and peaceful world.”  Among the Foundation’s many emphases, it works to “make cities better places,” which is precisely what SWOP is hoping to do for Chicago.

History of the Community Group

SWOP describes itself as a group designed to improve neighborhood life and well-being in certain Chicago communities.  In the past fifty years, the Southwest side has seen “large and rapid demographic shifts” that have led to a breakdown of neighborhood networks in the area, and a declining sense of community.

The Southwest Organizing Project’s early work began in 1989 through funding from the Southwest Catholic Cluster Project.  These early efforts were intended to strengthen community bonds among the “increasingly diverse residents and neighborhoods.”  After several years of successful work, SWOP was officially created in 1996.

How is SWOP Revitalizing the Southwest Side?

SWOP is now known for its “fight to end predatory lending” in the region, specifically in relation to local immigrant communities.  The Chicago Tribune emphasized that SWOP has been able to make headway into combatting the effects of foreclosure by gaining trust within the community and working directly with residents in its ground-up efforts.  

Notably, SWOP executive director Jeff Bartow was interviewed for comments early on in the foreclosure legislation process.  In April 2009, just after the signing of foreclosure grace period legislation in Illinois, Bartow emphasized the importance of providing homeowners in foreclosure with additional days to remain in their homes.  SWOP has been working to help neighborhood families since, and it is now focusing on revitalization efforts.

With the $750,000 of funding it has received from the MacArthur Foundation, SWOP is identifying prospective renters and homeowners who may be interested in renting or buying some of the empty properties on the Southwest side.  In addition, SWOP hopes to use the grant to “move into its own offices, improve its technological capacity, and boost employee training.”

Ultimately, SWOP plans to work with local developers, including the successful Brinshore Development, to “acquire and rehab” more than 600 “chronically vacant buildings” on the Southwest side

The grant funding comes just months after SWOP worked together with Illinois Attorney General Lisa Madigan and other community-based organizations to tour neighborhoods impacted by the housing crisis and to hear residents’ concerns about the vacant buildings in their areas.  In addition to the MacArthur funding it has just received, SWOP hopes to add to its revitalization efforts through monies received from the National Foreclosure Settlement Awards.

Do you have questions about foreclosures or community rehabilitation in your area?  Contact a foreclosure attorney today.

See Related Blog Posts:
Illinois Land Bank Aims to Revitalize Communities
More Funds Committed to Illinois Foreclosure Victims

Illinois Land Bank Aims to Revitalize Communities

We all drive by them—properties that have long stood empty with dark windows and deteriorating exteriors. Vacant and abandoned properties are often the result of foreclosure. For those living in areas where the sight of an empty house is more common, or those who have gone through foreclosure themselves, things may seem unlikely to improve. In Illinois, a state with one of the highest numbers of foreclosures in 2012, the recent establishment of a land bank in Cook County offers hope for these communities.

Vacant or abandoned properties are often the result of economic hardships, foreclosures and declining real estate markets which have characterized the past few years. The longer these devalued properties are on the market or remain tax liabilities, the more they adversely impact the neighborhoods around them. To battle this problem that has plagued states like Illinois, the Cook County Board unanimously voted the Land Bank Authority into existence. Its establishment came after over a year of behind-the-scenes work and support from real estate professionals, banks and municipal leaders. The Land Bank Authority aims to become an independent organization devoted to the revitalization of vacant properties, with the long-term impact of mitigating declining property values in Cook County.

Land Bank Authority Organization
According to an article from Progress Illinois, the Authority will obtain vacant or abandoned properties in order to redevelop them into tax-contributing entities to be purchased by new owners. It will consist of 13 appointed board members, each serving three-year terms.

At first, outside groups will fund land bank relief measures the form of grants. Using monies from these grants, the Authority will purchase and develop properties, starting with the communities that have been hit hardest. Over time, the organization strives for self-sufficiency, projecting an eventual annual budget of $5 to $10 million.

What the Land Bank Means for Cook County
The article emphasizes that Cook County has been especially burdened, with over 90,000 foreclosure filings in the past four years and a 3% rise coinciding with an overall national decline in foreclosures. Given the large geographical area under the land bank—the largest in the country—its establishment has the potential to make a positive impact on property values in the Cook County area, which in turn may benefit Illinois overall.

Cook County residents who are already facing foreclosure may wonder if the Land Bank Authority will be able to directly change their situation. As Dean Michael Pagano of the University of Illinois at Chicago College of Urban Planning notes in the article, the land bank “may not halt the foreclosures.” A person in foreclosure could still lose his or her property and would benefit from consulting a foreclosure defense attorney.

In most cases, the revenue a land bank receives through the processes of foreclosure or tax collection is used for further revitalization efforts in the immediate locale. This contrasts with the more common scenario, where the entity that acquires and flips the property profits privately, sometimes outside of the state or municipality. Pagano indicates that the Land Bank Authority may have the potential to “slow the decline of value” by showing the people of Cook County that something is being done to help make vacant properties productive again.

See Our Related Blog Posts:
Foreclosures in Illinois Near Top of Nation in 2012
More Funds Committed to Illinois Foreclosure Victims

Higher Fees on Illinois Homeowners?

The Federal Housing Finance Agency (FHFA) is pursuing a proposal that calls for higher fees on Illinois homeowners on their new mortgages in the state.

The Federal Housing Finance Agency oversees Fannie Mae and Freddie Mac.  Attorney General Lisa Madigan sent a letter to Edward J. DeMarco, acting director of the FHFA in which she asked the agency to abandon this proposal.  The higher fees proposal will affect Illinois, Connecticut, Florida, New Jersey and New York.  The FHFA claims the fees are necessary because these states enacted additional legal protections for borrowers to help fight off foreclosure.  Fannie Mae and Freddie Mac claim that this translates into higher fees for them when they have to carry out a foreclosure.

Madigan along with other attorneys general argue that the legal protections enacted are crucial protections for homeowners either facing or going through foreclosure.  Madison also argues that the FHFA’s proposal ignores the fact that lender and mortgage servicer misconduct is a major factor in the rising costs to borrowers that is also passed on to Fannie Mae and Freddie Mac in many situations.  These statutory consumer protections are not the main factor in higher foreclosure costs for Fannie Mae and Freddie Mac argues Madigan.

This is viewed by some as simply a threat to compel these states to accept higher costs for borrowers In their states or eliminate many of the legal protections afforded borrowers altogether.

This is certain to garner attention as the proposal gains steam.  Historically low interest rates have helped revive the housing market in many parts of the United States.  Low rates combined with a decrease in the number of foreclosed properties available for purchase continues to encourage individuals to pursue home ownership.  The lower number of foreclosed properties and the drop in the Foreclosure Discount encourages buyers to purchase homes because they feel that the market is improving and the chance of their property dropping in value has decreased.

Mortgage companies garnered a lot of attention as they faced lawsuits over their misconduct in dealing with borrowers.  Potential borrowers see these companies facing stiff penalties and huge legal settlements and this creates a feeling that the mortgage industry is under control.  Plus, states like Illinois have enacted statutes protecting borrowers in the foreclosure process.  It has become a lengthier and more difficult process to foreclose on a homeowner and seize their property due to new legislation.

It appears based on Attorney General Madigan’s argument that Fannie Mae and Freddie Mac are simply trying to pass the higher costs on to the consumers without fully examining the causes behind the increase in the cost of doing business.   If the proposal is approved and implemented, Illinois homebuyers will most likely feel the effect through higher interest rates.  The other option Madigan sees is to eliminate some of the legal protections for borrowers.  The cost of borrowing would be lower, but homeowners would lose some of the protections that guard homeowners against abusive or unlawful foreclosure practices.

See Our Related Blog Posts:
Be Wary of Cement Blocks Disguised As Rescue Floats      
What is a Deed In Lieu of Foreclosure?

The Anatomy of a Foreclosure

“So I fall behind on my mortgage payments, the lender says to pay up, I am unable or otherwise unwilling to pay up, the lender takes my home, sells it and kicks me to the curb, right?” asks Fred the delinquent owner.

The concepts outlined in Fred’s statement are somewhat correct, but there are procedures put in place to protect home owners from overzealous lenders along with certain rights implemented to ensure that the process is a just process.  Our foreclosure attorneys will walk you through the different aspects of the foreclosure process in discussing your particular case, but here we will help give you a little information so when you speak with one of our attorneys, you better understand the terminology and the overall process.

Most Used Mortgage/Foreclosure Terms

“Liens, lis pendens, lien theory, security, note?  I thought I just had a house payment?”

There are several legal terms that specifically outline how a house loan in Illinois is constructed.  For starters, Illinois is a “lien theory” state.  The Mortgage is the document that states that the property acts as Security for the loan; hence the lien theory meaning the homeowner holds onto to the title to the property subject to the lien placed by the lender.   The Note actually sets forth the terms of the loan, but the mortgage is what is filed to prove the debt exists.  Lis pendens is a term that you hopefully do not encounter.  It is the recorded document giving public notice that the property is the subject of a foreclosure process.  Deed In lieu of Foreclosure or a Deed in Lieu is pretty self explanatory.  The borrower essentially hands the property back to the lender instead of going through the full foreclosure process.  The catch to a Deed in Lieu is that the property must be equal to or greater than the amount owed on the property by the borrower.  If there is a deficiency, a deed in lieu may not be an option.  A Deficiency Judgment is also something to look out for.  If the public sale of a foreclosed property amounts to less than what the homeowner owes, then the homeowner is still responsible for the remaining debt.

Another important term to note is the Right of Redemption or Right of Reinstatement.  This right gives the homeowner the ability to reclaim foreclosed property by paying all of the unpaid payments along with any costs associated.  This is an important right that our attorneys can best explain and we will most likely tackle this in a future blog, but that is the general concept.    

These terms will help you understand the process outlined below.           

How Does a Foreclosure Work?    

For starters, a lender cannot just take your property in Illinois.  Since Illinois is a judicial foreclosure state, the lender must take the matter up in Circuit Court where the court must issue the final foreclosure judgment.   Your note and mortgage will outline what constitutes grounds for foreclosure, but oftentimes the foreclosure process begins after 3 missed payments.  Once the complaint is filed, you have 90 days from the date you receive notice of the foreclosure to exercise your right of reinstatement.   Once in court, if you lose then you receive the judgment of foreclosure and so the property is no longer yours.  At this point, your right of redemption period begins.  

However, you may contest the foreclosure based on a variety of grounds or may be granted additional time to contest the foreclosure based on judicial discretion.   Before the lender can conduct the foreclosure sale of your property, it must publish notice of the sale in a local newspaper at least 3 weeks in a row.  The lender must also determine if you have not already done so whether or not you qualify for a loan modification under the Home Affordable Modification Program.   At this point, unless additional time was granted for any of the reasons above, almost one year has elapsed.  If you have lost your case, then the lender will conduct the sale after proper notice and the court will confirm the sale.  You will be removed from your home if you have not already left.   If you are curious about the specific timeline for these events, please see one of our previous blog posts.

Do not get to this point.  Our attorneys will explain your rights and the steps to take at each phase of the foreclosure process to ensure that you are not unjustly or illegally foreclosed on and kicked out.  You may think that you have no options left, but we may be able to find a better way out for you.

See Our Related Blog Posts:

Foreclosure, Short Sales, & New Federal Guidelines
Hardest Hit Program Keeps a Bad Day from Getting Worse

Hardest Hit Program Keeps a Bad Day from Getting Worse

Different people will argue different points regarding the improvement or lack thereof with the economy.  But many homeowners and renters continue to struggle with the combination of a monthly mortgage or rent and either no job or a job that pays less than what they are qualified for.  Many of these “underemployed” or unemployed individuals just need temporary assistance so they can stave off foreclosure and the foreclosure lawyers here are working with a program that can provide the much needed assistance.   This program, The Illinois Hardest Hit program utilizes federal funds to help support people who need assistance with their monthly mortgage payments due to “unemployment or underemployment.”   The assistance comes through the program bringing the loan and all the past payments and penalties current and by paying monthly mortgage payments for up to 18 months or $20,000.  

A recent article in The State Journal-Register describes the program and gives a few of the guidelines that must be met for someone to utilize the program.  The Hardest Hit program is “a component of the Illinois Foreclosure Prevention Network administered through the Illinois Housing Development Authority.”  Different not-for-profit organizations partner with the Illinois Housing Development Authority to work with this new program and administer aid to the qualified applicants.  The need is apparent as Illinois currently sits at number 8 among states in the number of foreclosures.  Our Oak Park and River Forest foreclosure lawyers know all too well this statistic as they work with clients every day who are either facing foreclosure or are on the verge of it.

A few of the requirements for the Hardest Hit Program include:

-       Property must be a primary and only residence located in Illinois
-       Household must have a documented income reduction of at least 20% due to unemployment  or underemployment through no fault of their own
-       Arrearage caps of $20,000-25,000 depending on the county
-       Principal loan balance of mortgage cannot exceed $500,000
-       Household liquid assets cannot exceed $10,000 or $12,500 depending on the county
-       The current servicer of the mortgage must agree to accept payments from IHDA on the borrowers behalf
-       Borrowers must  not have been convicted of a mortgage related felony in the past 10 years

Additional requirements and details are found at www.illinoishardesthit.org.

The requirements explain a great deal about who the program is designed to help and who it is not designed to help.  It is not for people who are looking to get out of investment properties.  It is strictly for those people who through no fault of their own are in difficult financial situation.  

Our foreclosure lawyers work with these types of people each day who are not in a difficult situation due to greedy real estate deals or large spending sprees, but because the job market has not recovered and the mortgage must be paid or they are on the streets with their families.
This program is more than an ATM for needy homeowners.  It provides a support system that provides counseling and step by step updates to ensure the homeowners have the best chance for success.  This program works to keep families in their homes and have the best chance to stay there while they get back on their feet and move forward with their family.

See Our Related Blog Posts:

How Long Will Your Foreclosure Take?
Att. Gen. Madigan Announces $3 Million for Foreclosure Mediation Programs, but will They be Effective?

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.  

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July Numbers: Foreclosure Activity Down Almost 8% in Illinois

How Long Will Your Foreclosure Take?

How Long Will Your Foreclosure Take?

Here is a guide to help forecast a typical home foreclosure in the state of Illinois. Now, this model is intended for those who do not wish to fight the foreclosure process. Granted all cases are quite different, this information is general timeline of the foreclosure process. Though, before your lender can sue you for mortgage foreclosure, they must see if you qualify for a loan modification under the federal government’s Home Affordable Modification Program (HAMP). To qualify for HAMP, both you and your mortgage lender must be eligible.

Remember, if you at all are having legal trouble regarding a foreclosure, do not hesitate to contact the experienced River Forestforeclosure attorneys. They can help steer you through your own foreclosure process—no matter how challenging it may be.

0-2 Months

After three missed mortgage payments, foreclosure action commences; this constitutes the legal proceedings over the termination of your mortgage and repossession of your home. Once this has begun, the Sheriff’s office will serve you (deliver the legal paperwork) the foreclosure complaint. If the Sheriff cannot locate a party, they can post a notice in the newspaper.

2-3 Months

After receiving the foreclosure complaint, you have 90 days to reinstate your mortgage. This right of reinstatement means that you are allowed to repay the total money you owe on the mortgage, plus all costs and fees. If you have the ability to repay this sum, then the foreclosure case against you is over; though, you cannot exercise your right of redemption again for five years.

If you decline or are unable to employ your right of reinstatement, then you will receive notice of motion. A notice of motion is a written announcement requesting your presence at court and detailing your court date information. It is highly advisable to appear at court—as additional penalties may ensue if you do otherwise.

3-4 Months

At court, the judge may offer you and your family more time to hire a lawyer or to complete certain paperwork. If not, the judge will send you directly to trial. Assuming you are not fighting the foreclosure case at trial, you will then receive a judgment of foreclosure and a sale against you which states that you no longer possess the property. Upon receiving your judgment of foreclosure, you enter a redemption period (different from a right of reinstatement). This timeframe allows you to pay off certain costs, such as overdue mortgage payments, attorney’s fees, taxes, etc.  Your redemption period ends:

Seven months after you are given the foreclosure complaint, if you are living in the home.

Or

Six months after you are given the foreclosure complaint, if you are not living in the home; or three months after you receive the judgment of foreclosure against you, whichever is later.

7-10 Months

Before the foreclosure sale of your property takes place, the mortgage company must publish a notice of sale in a widely read, local newspaper. This notice must be in the real estate section and should appear at least three weeks in a row. If this is not the case, the foreclosure sale may not be valid and, under your rights, you are able to take legal action.

8-11 Months

A court will confirm a foreclosure sale unless you can prove one of the following:

-Notice was not given in the right way

-The terms of sale were unreasonable

-The sale was conducted fraudulently (in a dishonest way)

-The lender violated HAMP requirements

9-12 Months 

You no longer have the right to stay in your house and the mortgage company can ask the court to have the Sheriff remove you from the property. After you have left the property, you will receive a foreclosure deed—a written document of the foreclosure—which also become a public record.

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

Wells Fargo Settles with Illinois and US for $175 Million

Wells Fargo & Co. will pay $175 million in a joint settlement with U.S. Department of Justice and the state of Illinois for discriminatory lending practices, according to the Chicago Tribune. This settlement aims to recompense the thousands of African-American and Hispanic borrowers who were ushered into subprime mortgages by the prominent bank. Having undertaken the case back in 2009, Attorney General Lisa Madigan called the ruling “a significant step forward to hold banks accountable.”
The state of Illinois alone is meant to receive $15 million of the $175 million settlement. Of that sum, an announced $8 million in average cash payments of $15,000 each will be made to roughly 3,300 customers. This figure is designed to compensate those wrongly steered into subprime loans between the years of 2004 and 2009. In addition, minority borrowers who were wrongly charged with higher fees will collect a further average of $1,500 to $2,000 each. Wells Fargo will utilize the remaining $7 million in the state to offer down payment assistance to homebuyers through a special program.

While other states are also receiving a portion of the $175 million settlement, our Oak Park and River Forest foreclosure lawyers know that only Illinois filed a suit against Wells Fargo for its minority lending operations. Almost three years ago, in July 31st of 2009, Lisa Madigan charged that the bank with discrimination against African-American and Latino borrowers by selling them high-cost, subprime mortgages; furthermore, the Attorney General alleged that white borrowers with parallel credit profiles received lower cost mortgages. Months later, a Chicago Reporter analysis of Wells Fargo lending data found vast differences in the treatment of white and non-white borrowers. It was only then did the state began investigating the bank’s practices.

"When you look at what's taken place, it's horrendous," stated Madigan. "It's not an understatement at all to say that there's an entire generation of wealth in minority communities that's been taken away."

The Chicago Reporter study found that Wells Fargo put 34 percent of Chicago-area African-American borrowers who earned more than $120,000 into subprime loans while only 22 percent of white borrowers who earned less than $40,000 were put into that high-cost mortgage product. Moreover, the state claimed that Wells Fargo rewarded employees for selling borrowers high priced mortgages.

"Wells Fargo adopted loan pricing and origination policies that allowed the personnel who originated its loans both to set the loan prices charged to borrowers and to place borrowers into loan products in ways unconnected with credit risk," the filing said. "Wells Fargo created financial incentives for its employees and mortgage brokers by sharing increased revenues with them."

This scandal—and now, due punishment—exemplifies the inherent troubles in the housing industry for the nation, for the state of Illinois, and for the Chicago-area. Each Oak Park foreclosure attorney at our firm understands that the rampant nature of foreclosures at the present time is only a symptom of these egregiously mismanaged practices, as seen by Wells Fargo. If you or a loved one are at all experiencing any foreclosure repercussions, negotiations, or plain fears, do not hesitate to contact our experienced attorneys. This type of injustice shall not be tolerated; and, you don’t have to face it alone.

See Our Related Blog Posts:

Foreclosure Rates for Illinois, Chicagoland Fall Slightly in June

Chicago Tribune on the “Short Sale Maze”

Foreclosures Rates for Illinois, Chicagoland Fall Slightly in June

The recent data shows slender improvements in the nation and the state’s foreclosure rates this past month. After an abysmal May where Illinois foreclosures increased by an astounding 29%, the June report is a trickle of relief. Yet, to affirm that this housing crisis is over or that the country’s foreclosure quandary has been solved is gravely wrong. Our Oak Park and River Forest foreclosure lawyers know that these positive trends are a breath of fresh air, but by no means is the US or Illinois out of hot water. 

Following the previous month’s egregious results, June provided roughly a 4% and 8.5% decrease in foreclosure rates for the country and Illinois respectively. The state garnered a total of 14,938 foreclosures; to note, this statistic includes default notices, auction-sale notices, and bank repossessions. These encouraging figures from the source RealtyTrac unfortunately do not narrate the whole tale. Compared to April, these June foreclosure numbers are still an 18% increase in Illinois. Foreclosures occurred in one in three hundred fifty households on average for June in the state; these first half numbers are a 22% increase compared to last year. In fact, Illinois, as it was in May, is still ranked fifth worst in the country regarding foreclosure activity. Therefore, this progress is not substantial, nor can be concluded as sign of triumph.

Unfortunately, the Chicago area is plagued arguably more so than any other city. Cook County foreclosure rates are 28% above the state’s average and a staggering 140% over the national average. It is considered the “Top Foreclosure City” in the US. RealtyTrac’s CEO, Brandon Moore said, “The increase in foreclosure starts in the first half of the year will likely translate into more short sales and bank repossessions in the second half of the year and into the next year.”

Whether this positive result for June, albeit marginal, will be indication of a greater progress to come is to be determined. But for certainty, Chicagoland, Illinois, and the nation still remain in discordant flux of rapid foreclosures.

Managing Foreclosure Troubles

There is much recourse if you, as a local resident, happen to receive notices of a foreclosure. Yet, simply doing nothing is the least advisable course of action. An Illinois foreclosure defense lawyer can provide you the tools and knowledge to manage this calamity. Our attorneys can review your case and illustrate how potential options like a loan modification, a short sale, or enacting your equitable right of redemption may be suitable in your situation.

It is crucial that you fully understand the long-term repercussions of your foreclosure future. Consulting with an experienced attorney is a primary step in managing this predicament. You do not have to and should not face bank negotiations alone. Please, contact one of our accomplished attorneys today and let us help you navigate through this difficult process.

See Our Related Blog Posts

Chicago Tribune on the “Short Sale Maze”

Illinois Foreclosures Rise in May

Chicago Tribune on the “Short Sale Maze”

Today the Chicago Tribune published a story on the continued complexities with short sales. The Oak Park and River Forest short sale lawyer at our firm appreciate the confusion the reigns among many local residents who are struggling with their homes and trying to learn about all of their options. Short sales are often a terrific way to get a fresh start with fewer long-term financial consequences. However, trying to work through a short sale is often stressful and baffling for the uninitiated.
At the very least, sellers (and buyers) should know what they are getting into when working through a short sale--the aid of a legal professional is often essential.

There is nothing all that complicated about the idea of a short sale. It is simply an agreement where a lender (bank) agrees to let a homeowner sell the house to a third party for less than the amount owed on the home. This allows the seller to get out of the mortgage without going through foreclosure, and, when done properly, to be relieved of a future deficiency judgment from the bank. The bank often prefers this, because it may be less costly and quicker than a foreclosure. While the lender does not like to give up on money it is owed, it sometimes makes sense for the lender to cut their losses earlier rather than later.

The Oak Park and River Forest real estate attorneys know, however, that the actual mechanics of a short sale quickly become complex.

According to a new report from the National Association of Exclusive Buyer Agents, in many areas only about 25% of short sale purchase contracts actually make it to closing. However, about 50% of homes offered as short sales actually end up being sold in that manner. In other words, about one in two short sellers will complete the process successfully, but many of them will need to go through multiple offers before everything comes together.

Reasons for the low success rates are varied. At a basic level, many deals fall through simply because of the time it takes for everything to come together. Buyers often cannot wait as long as necessary--months and months--and end up walking away. New guideline changes now in effect last month regarding homes backed by Fannie Mae and Freddie Mac are seeking to speed up the process. However, it remains to be seen if the new guidelines will actually translate into stepped up approval rates and speedier decisions by the banks.

No matter what, properly preparing the “hardship package” is critical for the seller. Not providing a thorough package may lead to significant delays and a scuttled deal. Having help with this is critical.

Though many challenges to short sales remain, it is important for local families not to write off the option. In many cases the sale fails because sellers do not have close professional assistance to ensure they navigate the process effectively. Short sales are still a popular option. In this first half of this year alone, about 110,000 homes were sold via short sale--about 12% of all home sales.

If you are in Oak Park, River Forest, or throughout Chicagoland, consider getting in touch with our office to learn more about your options and to see how we can help.

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The Right of Redemption—or lack thereof—in Illinois

Most US states have a statutory condition that allows for the repossession of property after a foreclosure has occurred.  In these states, the redemption comes at a price; in general terms, if the individual is able to accumulate the finances to repay the debt in a certain time, he or she is able to reclaim that property.  Yet, our Oak Park real estate lawyers often explain how Illinois does not have this statutory “right of redemption” which makes the foreclosure process all the more difficult and precarious. Equitable Right of Redemption

Instead, the state of Illinois has what is known as an “equitable right of redemption.”  This entitlement is quite similar to its statutory cousin, but is a pre-foreclosure measure.  A mortgagor in default may be able to exercise this right over the period of seven months after the date of service or the first publication date, or three months after the date of entry of judgment of foreclosure—whichever is later.  Moreover, these time spans can even be shortened.  When the court deems a property abandoned, the redemption period is cut down to 30 days after the date of judgment for foreclosure.  All foreclosure sales cannot occur until the redemption period expires.

Waiving Redemption Rights

Homeowners in Illinois have the option to waive their right of redemption, only if the lender agrees to waive his or her own right to a deficiency judgment.  A deficiency judgment is a decree against the borrower or debtor whose foreclosure sale did not produce sufficient funds to pay the mortgage in full.  If a deficiency judgment is granted, the lender has permission to collect the required money by any legal means, including levying assets and garnishing wages.  If such finances to reclaim the home are unattainable, it would be wise to consider waiving this right in order to escape a future deficiency judgment.  In contractual terms, the homeowner and lender must file written consent waiving their rights.

Applying Your Right of Redemption

If a homeowner wishes to repossess his or her property, the state of Illinois requires individuals to file a notice of intent to redeem with the court; this notice must be filed five days before exercising the right.  Furthermore, persons must provide necessary proof of adequate funds.  In total, the redemption price includes the amount of the loan plus attorney fees, court costs, outstanding insurance and taxes and other related fees.  The exact amount owed is specified in the foreclosure judgment.  Payment should be made out directly to the clerk court.

The Snares of Foreclosure and Your Relief

Redemption issues in the foreclosure realm can be treacherous, particularly in the state of Illinois.  For one, in respect to waiving redemption rights, it is an important as a homeowner that you are protected from deficiency judgment.  In addition, exercising your right of redemption is controlled by specific measures and difficult vernacular.  The burden of negotiating with lenders should not all be on your shoulders.  The highly experienced Chicago, Oak Park, and River Forest real estate lawyers at the Emerson Law Firm can provide a helping hand to overcome these obstacles.  Redemption troubles are just one of the many areas in which these attorneys can provide you and your family with these difficult issues.

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