Foreclosures Down Nationwide, But Not in Illinois

Each month, consumers across the country encounter news about the continuing decline of foreclosures. While such news typically suggests a stronger economy than in the years immediately following the foreclosure crisis, the state of Illinois has not yet fully bounced back. Or, at least, it remains among the hardest-hit states for foreclosure activity. According to a recent report from DSNews.com, an April 2017 Foreclosure Market report from ATTOM Data Solutions indicated that foreclosures nationwide have “now reached their lowest point since late 2005,” yet that decline is not as evident in Illinois.

Declining Foreclosure Rates Across the Country

In general, foreclosure rates continue to decline. As the recent report explains, foreclosure rates were down 23% from April 2016, meaning that foreclosure rates are actually at the lowest they have been since 2005. In total, there were just over 77,000 foreclosure filings in April 2017. This number “includes all default notices, bank repossessions, and scheduled auctions.” To put that number another way, around one out of every 1,723 homes (or about 0.06 percent) was in foreclosure last month. Less than 1% of all homes nationwide were in some state of foreclosure as of the end of the month.

However, not all states have equally low foreclosure rates. Indeed, the low number we cited above is a nationwide average, which includes states where foreclosure rates are even lower than the figure we mentioned, as well as those in which the foreclosure rates may be significantly higher. Unfortunately, Illinois is a state that falls into the latter grouping.

Illinois Has Fifth-Highest Foreclosure Rate in the Country

When it comes to states that are still dealing with high rates of foreclosure, Illinois is not the worst among them. At the same time, however, the report notes that it has the fifth-highest foreclosure rate in the country. Here are the numbers for the states that made the “top five” in terms of foreclosure activity:

• New Jersey’s Atlantic City metro area (1 out of every 237 homes in foreclosure);
• Delaware (1 out of every 706 homes in foreclosure);
• Maryland (1 out of every 776 homes in foreclosure);
• Connecticut (1 out of every 956 homes in foreclosure); and
• Illinois (1 out of every 1,083 homes in foreclosure).

Some other notable cities with high foreclosure rates were Fayetteville, North Carolina, Trenton, New Jersey, Rockford, Illinois, and Philadelphia, Pennsylvania. Are these numbers really a reason to worry? When you look at the total number of homes in foreclosure in Illinois, 1 out of every 1,083 sounds bad. However, when we think about he percentage (about 0.09%), that number does not seem so high. The good news is that, when it comes to repeat foreclosures, the Chicago area is not mentioned as one of the regions with a high rate.

Contact an Oak Park Foreclosure Defense Lawyer

Given that Chicago foreclosure rates remain high compared to other states across the country, it is important to learn more about avoiding foreclosure if you are behind in mortgage payments. An experienced foreclosure defense attorney in Oak Park can help. Contact the Emerson Law Firm today to learn more about how we can assist you.

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Mortgage Defaults Reach Recent High in Chicago

Reverse Mortgage Scams Target Elderly Minority Homeowners

Mortgage Defaults Reach Recent High in Chicago

Is foreclosure activity in Chicago on the rise again? According to a recent article in ChicagoNow, mortgage defaults in the Chicago area have now hit a two-year high. What does this mean for the real estate market? Do these numbers signal a renewed issue with foreclosures in Illinois? Sometimes it can be difficult to identify a single factor that is contributing most significantly to foreclosure rates in different parts of the country. While we may not be able to say with certainty what is causing new foreclosure activity in the Chicago area, the recent trend appears to be problematic. What else should you know about Illinois foreclosures?

Remaining Foreclosures in Chicago

As the article points out, we have known for quite some time that there are remaining foreclosed homes around Chicago and its suburbs. As such, when we see continued high rates of foreclosure auctions and bank repossessions, this does not necessarily point to new foreclosures. Rather, these numbers frequently signal that homes that were previously abandoned, or with untenable underwater mortgages, simply are in the process of being resolved. When foreclosures are being resolved—for instance, are being auctioned and sold—that is generally a good thing for the region.

What is the problem? New foreclosures going into the “foreclosure pipeline,” as the article describes it. In other words, there are mortgages out there for which homeowners are having difficulty making payments, and those homes are just now entering the foreclosure process. While the total of all homes in Chicago that are at various stages of the “foreclosure pipeline” actually reached a new low recently, the article intimates that we need to be concerned and vigilant about new foreclosures in the area. While even the rate of new foreclosures had been on the decline, it recently “regained momentum.”

Urban Areas Having More Difficult Bouncing Back from Recessions

As a report in The Global Dispatch explains, it may not be all that surprising that foreclosed properties remain in the Chicago market, and that new foreclosures are not at record lows. In total, as of February 2017, the number of single-family homes at any stage of foreclosure in the Chicago area reached an 11-year low.

However, as that report notes, there are still millions of homeowners in Chicago who are dealing with “pre-crisis subprime mortgages.” In other words, many homeowners in Chicago were able to buy homes prior to the foreclosure crisis through subprime mortgages. Millions of those homeowners’ properties did not go into foreclosure during the peak of the crisis or immediately afterward. Now, around three million homeowners in Chicago still have subprime mortgages, and those loans are just beginning to catch up with them. As a result, many of those homeowners are just now dealing with the threat of foreclosure.

Chicago was among the “hardest-hit cities” in the foreclosure crisis, and millions of foreclosures resulted from subprime mortgages. So, it should not come as a complete surprise that many homeowners in the city are still dealing with subprime mortgages and trying to find a way to keep their homes.

Contact an Oak Park Foreclosure Defense Lawyer

There are many ways an Oak Park foreclosure defense lawyer can help if you are dealing with a subprime mortgage or are trying to avoid foreclosure. Contact the Emerson Law Firm to learn more about how we can help.

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Reverse Mortgage Scams Target Elderly Minority Homeowners

Sandra Emerson Discusses Senate Bill Addressing Foreclosure Process

Reverse Mortgage Scams Target Elderly Minority Homeowners

According to a recent article in the Chicago Reporter, consumer protection advocates continue to seek justice in Chicago for elderly homeowners who were targeted by a reverse mortgage scam. As the article explains, this particular scam began back in 2009, at the height of the foreclosure crisis, when a Chicago business person named Mark Diamond started orchestrating a reverse mortgage scam that largely targeted elderly African American homeowners in the city. Illinois Attorney General Lisa Madigan has been seeking justice for these victims for nearly a decade, yet many still have not received any form of restitution.

Details of the Reverse Mortgage Scam

Before we get into the details, it is important to understand what a reverse mortgage is and how it works. In brief, as the National Reverse Mortgage Lenders Association website explains, a reverse mortgage is “a loan available to homeowner, 62 years or older, that allows them to convert part of the equity in their homes into cash.” It can help retirees who do not have a lot of cash to make use of the equity in their homes to pay for expenses.

Back in 2009, Attorney General Madigan “filed a complaint on behalf of dozens of elderly black homeowners who alleged that Diamond and other mortgage and home repair companies had stripped nearly $1.3 million in equity from the homeowners,” according to the article. However, most of the victims have not received any compensation. Yet the lack of compensation is not due to a similar lack of court findings against Diamond. Rather, the inadequate compensation concerns the difficulty of actually recovering the money from Diamond’s assets.

In January 2016, for example, Judge David B. Atkins of the Cook County Circuit Court determined that Diamond had violated the Illinois Consumer Fraud Act “by misleading elderly residents into signing reverse mortgages and agreeing to have repair work that was shoddy or never completed.” According to the article, “victims unknowingly signed for loans and were liable for insurance and other fees they could not afford.” For violating the Illinois Consumer Fraud Act, Atkins assessed a civil penalty of $340,000.

Restitution May be Ordered, but Obtaining Money Can be Difficult

In July 2016, Atkins ordered that Diamond pay $2.3 million to compensate 47 different victims targeted in his reverse mortgage scam. Atkins specifically ordered repayment plans to the victims, which ranged from $4,000 to $107,000 depending upon a specific victim’s losses, but the money has not been paid. Madigan’s office has used several tactics to obtain Diamond’s assets in order to provide restitution for his victims, such as issuing citations to Diamond’s family members and to the estate of his wife, as well as to title companies and banks. However, as the article underscores, “getting any money from these efforts will take time.”

Madigan spoke about the limits of restitution—the difficulty of actually getting the compensation to victims—and, as such, the limits of the system: “It is deplorable that he [Diamond] got away with his scheme for so many years . . . .  We have prevented additional people from losing their homes and savings to one of Diamond’s reverse mortgage scams, and my office continues to pursue restitution for those who have already lost so much.”

Seek Advice from an Oak Park Consumer Protection Lawyer

If you have questions about reverse mortgages, consumer protection issues, or foreclosure, an experienced Oak Park consumer protection attorney can help. Contact the Emerson Law Firm today to discuss your situation with a consumer protection advocate.

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Sandra Emerson Discusses Senate Bill Addressing Foreclosure Process

Report Suggests an End to Foreclosure Crisis in Illinois

Sandra Emerson Discusses Senate Bill Addressing Foreclosure Process

A recent state Senate bill aims to fast-track aspects of the mortgage foreclosure process, according to a recent article in the Chicago Daily Law Bulletin. However, many foreclosure defense lawyers and consumer protection advocates in Illinois are concerned about whether the Senate bill actually might not have the best interests of debtors in mind. Some commentators have voiced worries that the proposed legislation “would unfairly advantage bank lenders.” Sandra Emerson was quoted in the article, emphasizing that the bill may require more of homeowners than is fair.

What else do you need to know about the Senate bill, and what else does Sandra Emerson have to say about the potential harms it could pose for homeowners in the Chicago area?

Learning More About Senate Bill 192

The proposed legislation, Senate Bill 192, aims to make revisions to Section 15-1506 of the Code of Civil Procedure. More specifically, the bill would amend the mortgage foreclosure article of this part of the law, and it would make two primary changes:

• When there is a foreclosure trial, once the mortgage lender presents the mortgage in the current case and the mortgage note, it establishes a prima facie case for foreclosure; and
• The initial burden of proof would shift from the lender to the borrower as soon as the mortgage lender establishes a foreclosure case.

What is a prima facie case? In brief, it is one that is sufficient to establish that the party presenting evidence has enough in its favor to move forward with the case. As you might be able to guess, these proposed amendments to Illinois law could make it more difficult for homeowners to defend against foreclosure, while also making it easier, potentially, for banks to be able to move forward with foreclosure cases against struggling debtors.

Foreclosure Defense Advocates in Illinois Speak Out Against Proposed Legislation

In response to the proposed new law, many Illinois foreclosure defense advocates emphasize that such amendments to the law suggested by SB 192 could deny mortgage borrowers of due process. Sandra Emerson emphasized that the Senate bill has the potential to do serious harm to borrowers who want to build a successful foreclosure defense in order to remain in their homes. Given that mortgage servicers make errors, it can be difficult for a borrower to dispute the amount owed early in the case, and the banks could move forward, potentially unfairly, with a foreclosure case. As she explained, “What we’ve noticed is that a lot of mortgage companies make mistakes, very serious errors in accounting.”

Moreover, as Emerson clarified, shifting the burden of proof to the homeowner makes it very difficult on the homeowner: “That’s really hard for anybody to do . . . .  You don’t have any way to prove what is actually owed, because the bank has the information you need to do that.” As Emerson highlighted, the way in which the bill has been written (including the shift in the burden of proof) would favor the banks while making it so that “someone who is a layperson isn’t going to understand the potential impact that this law would have.”

Contact an Oak Park Foreclosure Defense Lawyer

If you are facing foreclosure, it is more important than ever to discuss your case with an Oak Park foreclosure defense attorney. An advocate at the Emerson Law Firm can speak with you today. Contact us to learn more about how we can help.

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Report Suggests an End to Foreclosure Crisis in Illinois

Alleged Racial Disparities in the Continuing Foreclosure Crisis

Report Suggests an End to Foreclosure Crisis in Illinois

While the foreclosure crisis has ended in many parts of the country, data from the last year has suggested that many foreclosures remain in the Chicago area, and that numerous foreclosure cases remain in the court system. However, according to a recent article in the Chicago Business Journal, a report from the Federal Reserve Bank of St. Louis indicated that the foreclosure crisis is officially over in Missouri, and that Illinois should soon follow the same course.

What else does the report have to say, and what kind of data does it base its conclusions upon? What can you do in the event that you are facing foreclosure and need assistance making your mortgage payments?

Nearing the End of the Foreclosure Crisis

How does the report draw its conclusion that the foreclosure crisis is nearing its end in Illinois? The recent report examines “the combined rate of mortgages 90 days or more past due plus those in foreclosure,” the article reports. As of September 30, 2016, that rate in Missouri was at 2.3%. At the same date, the rate was at 3.8% in Illinois. How do those numbers compare with the national average? At the end of September, the national average was at 3.20%.

The report took those figures and then explored the “historical averages in each state.” Based on its findings, it contended that the foreclosure crisis—determined by numbers—started in the second quarter of 2008 in Missouri and ended in the state during the first quarter of 2016. The foreclosure crisis, according to the report, actually started earlier in Illinois than in Missouri—in the first quarter of 2008. If the numbers are correct, then the foreclosure crisis will end in Illinois in the fourth quarter of 2016 once all of the data is gathered. The figures look a bit different when compared with historic national averages, however. In that respect, Missouri will have “exited the crisis in the fourth quarter of 2015,” while Illinois will not emerge entirely from the foreclosure crisis until the third quarter of 2017.

What is the most important lesson to learn from the report? As one of its authors points out, the report underscores that “the foreclosure crisis has been a long, miserable experience for many,” but ultimately, the most recent data we have “shows that, at least, the end is in sight.”

What Should You Do if You are at Risk of Foreclosure?

Even when the foreclosure ends according to the data, families in the Chicago area will still remain at risk of foreclosure. What can you do if you are having difficulty making your monthly mortgage payments? According to a tip sheet from Bankrate.com, there are many options, including but not limited to:

• Sell the property as a short sale;
• Deed in lieu of foreclosure;
• Seek a mortgage modification; and
• Speak with an attorney about options for avoiding foreclosure.

Do you have questions about avoiding foreclosure in Chicagoland? And experienced foreclosure defense attorney in Oak Park can assist you. Contact the Emerson Law Firm today to discuss your situation.

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Alleged Racial Disparities in the Continuing Foreclosure Crisis

Recent Foreclosure Rates Show Sharp Increase

Alleged Racial Disparities in the Continuing Foreclosure Crisis

According to a recent article in The New York Times, fair housing advocates allege that there are racial disparities in the way that Fannie Mae cares for houses in foreclosure. While the nation largely has bounced back from the foreclosure crisis, thousands of properties remain in various stages of foreclosure across the country and many of them are in states of disrepair that are likely to prevent them from being sold. What is the specific allegation against Fannie Mae? As the article articulates, a number of organizations, “led by the National Fair Housing Alliance, say that Fannie Mae has systematically failed to care for houses in foreclosure in minority neighborhoods while ensuring those in working- and middle-class white communities were tended and ready for sale.”

These allegations appeared in a recent lawsuit, which refers primarily to actions (or inactions, in this case) taken by Fannie Mae “well after the predatory lending that forced many families out of their homes.” What else should you know about these allegations and how they may impact foreclosures in Illinois and throughout the country?

Disparities Alleged in Vacant Homes

As the article explains, a group of fair-housing advocates have begun visiting foreclosed properties across the country, from Oakland, California to Dayton, Ohio. What have they found? Thus far, of the more than 2,300 properties those advocates saw between the years of 2011 and 2015, the houses in largely minority neighborhoods are in varying states of deterioration. When certain houses goes into foreclose, Fannie Mae is responsible for properly maintaining them. What criteria did the fair-housing advocates use in assessing the homes they visited? They relied upon Fannie Mae’s own maintenance checklist, which includes items such as:

• Broken gutters;
• Missing mailboxes; and
• Unmowed lawns.

Other items noted when visited foreclosures in minority neighborhoods included some of the following:

• Peeling paint;
• Rotting wood;
• Missing or broken shutters;
• Broken stairs;
• Broken windows;
• Damaged front/back doors;
• Damaged siding;
• Exterior holes; and
• Damaged fencing.

What conclusion have fair-housing advocates drawn? By placing data on a graph, the National Fair Housing Alliance Census demonstrated that, of the properties most likely to have a high number of deficiencies, 75% were nonwhite. For instance, the data showed that “foreclosed homes in predominantly minority neighborhoods are six times more likely to have holes in the wall,” while foreclosed properties in those same neighborhoods are “two times more likely to have broken mailboxes” and “five times more likely to have broken windows.”

How the Housing Advocates Obtained Their Data

As we mentioned, the fair-housing advocates who have made allegations against Fannie Mae visited more than 2,300 foreclosed properties between 2011 and 2015. But how did they decide where to go? As the article explains, investigators visited 38 different metropolitan areas across the country. They conducted research into specific zip codes “in both minority and predominantly white work- and middle-class communities with a high number of foreclosures.” Investigators visited a wide range of properties within those groups, and then “assessed basic maintenance items,” including many of the items mentioned above.

In total, more than 30% of foreclosed properties in predominantly minority neighborhoods had 10 or more maintenance issues, compared with only 7% of properties in primarily white neighborhoods.

Foreclosure remains a serious issue in our country, as well as a problem for many individual homeowners in Illinois. If you have questions about avoiding foreclosure, an experienced Oak Park foreclosure defense lawyer can help. Contact the Emerson Law Firm today.

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Recent Foreclosure Rates Show Sharp Increase

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