Pushing Back Against Foreclosure in Cook County

Regardless of how the economy looks in general, any individual or family can be at risk of foreclosure after dealing with the unexpected loss of a job or an unforeseen medical emergency. Losing your job or dealing with the declining health of a loved one can mean that you are having difficulty making mortgage payments and could be at risk of losing your house. According to a recent article in Chicago Now, despite recent positive trends in the number of foreclosures in Chicagoland over the last several months, foreclosure activity in general “moved in the wrong direction in March.”

While homeowners struggle with making mortgage payments, Cook County is also making new efforts to improve neighborhoods that have been negatively affected by foreclosure. What do you need to know about the increased rate of foreclosure activity combined with new efforts to improve the real estate market?

Nationwide Foreclosures are Declining, but Not Necessarily in Chicago

Are foreclosure rates actually increasing in Chicago and throughout Cook County? According to the Chicago Now article, Attom Data Solutions just released its Foreclosure Market Report for the first quarter of 2018. In general, foreclosure rates have declined across the country by about 19% from the end of the first quarter in 2017. However, the same is not exactly true of foreclosure rates in Cook County.

The data shows that, between February and March 2018, Chicago actually saw “a significant increase” in foreclosure activity, “rising to the highest level since October.” But is this data actually a reason to despair? The report also notes that, despite the increase in the number of foreclosures, the rate at the end of the first quarter still represents a 23% decline from this same time last year.

Chicago is clearing out its backlog of foreclosures, but some new ones are happening. Fewer than 50% of current foreclosure activity in Cook County is connected to foreclosures that were initiated during the housing market crash. At once, that news is good because it means that the buildup of foreclosures is not presenting the same problem that it once did. At the same time, however, that news also means that more homes are newly entering the foreclosure process. More specifically, as the report underscores, “we are beginning to see early signs that some post-recession loan vintages are defaulting at a slightly elevated rate, a sign that some loosening of lending standards has occurred in recent years.”

Additional Strategies for Handling Foreclosure Blight

Handling the remnants of the foreclosure crisis and preventing new defaults also concerns rebuilding neighborhoods where abandoned homes once stood and increasing interest in certain areas for new building. According to a recent article in the Chicago Tribune, Cook County Land Bank—in an effort to increase home ownership and to lessen foreclosure blight—has listed nearly 3,200 vacant lots for sale that will be “available at below-market rates to individuals, developers, and organizers.”

The hope is that new building and community development will help to repair some of the neighborhood damage caused by the foreclosure crisis.

Contact an Oak Park Foreclosure Defense Attorney

If you have questions about foreclosure and Cook County neighborhoods, or if you need help preventing foreclosure, an experienced Oak Park foreclosure defense attorney can assist you. Contact the Emerson Law Firm today.

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Chicago Foreclosures Reach Record Low

What is a Judicial Foreclosure State?

Chicago Foreclosures Reach Record Low

Are you still seeing foreclosures in your neighborhood in Chicagoland? If the answer is yes, the statistics suggest that you may not be seeing many foreclosures for much longer. According to a recent article in Chicago Now, Chicago foreclosure rates have dropped to their lowest since RealtyTrac has been collecting data on foreclosures in the area, and that number likely will only get lower. What do we know about general foreclosure trends in the Chicago area as of early 2018?

Foreclosure Rates Have Dropped in Chicagoland by Approximately 75%

The article in Chicago Now cites data from Attom Data Solutions, which is the parent of RealtyTrac. According to that data, “the number of Chicago homes in the foreclosure process fell below 9000 for the first time since [the company began] tracking the data—8,983 homes to be exact.” While that number might sound high to you, it is all relative. When RealtyTrac began tracking foreclosure rates in Chicagoland, the number was above 37,000. Since 2013, the total number of foreclosures in the area has been on the decline, and experts anticipate that the trend will continue.

In addition to the total number of homes in foreclosure, RealtyTrac also reports that “Chicago’s foreclosure activity also has been showing regular declines, with all three components approaching recent lows.” What does that mean? The three components include foreclosure auctions, bank repossessions, and mortgage defaults. The most important of these to watch, according to the article, is the total number of defaults. In order to keep the foreclosure rate on a decline in the Chicago area, it is extremely important to avoid new defaults. Based on the numbers from January 2018, the rate of defaults is down more than 25% from the previous year.

Seller’s Market Also Helps Foreclosure Rates

The total rate of foreclosure nationwide has also been on a decline, with defaults showing a 10% drop from January 2017 and a decline by more than 17% in the total number of repossessions from this time a year ago. Overall, foreclosure auctions across the country are down by more than 20%. According to an article in World Property Journal, one of the reason that foreclosure rates are down and neighborhoods are being repopulated—rather than having many empty homes due to foreclosure—is that it is currently a seller’s market. In other words, desirable homes are in short supply, which means homes that get listed for sale tend to sell for higher prices and quickly.

The housing inventory is in such short supply, the article suggests, that even homes in “the top environmental hazard risk quintile” are selling at higher rates than they have in years. As Daren Blomquist, the senior vice president for ATTOM Data Solutions explained, as a result of current trends in the real estate market, “even homes in higher-risk zip codes for environmental hazards are in high demand from buyers looking for lower-priced properties and investors looking for the next up-and-coming neighborhood.” The rate of foreclosures in environmental risk areas is also lower, by and large, than the foreclosure rate generally across the country.

All this is to say that homes are selling and foreclosure rates are declining, even in areas that some of us might assume would not be as desirable. It is important to keep foreclosure rates low. If you have questions about avoiding foreclosure, an experienced Oak Park foreclosure defense attorney can help. Contact the Emerson Law Firm to learn more.

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What is a Judicial Foreclosure State?

Remedy for Illinois Homeowners Who Faced Foreclosure

What is a Judicial Foreclosure State?

According to a recent article in The Patch, Illinois had one of the highest rates of foreclosure in the country in 2017. Indeed, Illinois came in fourth for the total number of foreclosure filings last year, yet foreclosures overall dropped significantly. In total, Illinois had a foreclosure filing rate of 0.86% of the total number of housing units in the state, which still shows a decline from the previous year. In other words, foreclosure rates are declining in Illinois, yet they are still among the highest in the nation. As you have read about foreclosures in Oak Park and throughout Chicagoland, you might have come across the term “judicial foreclosure.”

Given that many homeowners in the state are still facing foreclosure, it is important to understand the difference between a judicial and a non-judicial foreclosure, and what this means for homeowners in Illinois.

Two Types of Foreclosures in the U.S.

In the country, there are two different types of foreclosures - judicial and non-judicial foreclosures. You may have heard of or seen references to judicial foreclosures in Illinois, and this is because Illinois is a judicial foreclosure state. What does this mean? It is actually a relatively simple premise: Foreclosures need to go through the court system. Other states are what are known as non-judicial foreclosure states, and as such, foreclosures do not have to go through the court.

Judicial and non-judicial foreclosures have different processes. While the basic difference between them is relatively easy to understand, it is important to carefully consider the distinctions between these two types of foreclosures and the way they affect homeowners. Since Illinois is a judicial foreclosure state, we will focus on what that means for mortgage borrowers who may be behind on payments.

How do Judicial Foreclosures Work?

For a judicial foreclosure to begin, the bank (the lender of the mortgage) needs to file a lawsuit. Because judicial foreclosures go through the court system, they tend to take a significantly longer period of time than non-judicial foreclosures. Under foreclosure laws, the following are typically the steps in a judicial foreclosure:

• The bank first needs to send a notice of its intent to begin the foreclosure process after you get behind on your mortgage payments by 120 days or more;
• The bank will file a lawsuit if you do not attempt to make payments on the mortgage debt you owe;
• Homeowner receives notice of the lawsuit and can respond, which is the point at which the homeowner can raise defenses to the foreclosure; and
• If the bank wins the lawsuit, the court will enter a judgment for the bank and a foreclosure sale usually will occur.

About half of all U.S. states are judicial foreclosure states. In non-judicial foreclosure states, the foreclosure process does not go through the court and thus is typically much quicker. It usually involves the homeowner receiving a notice of default and a notice of sale before the foreclosure sale occurs.

Contact an Oak Park Foreclosure Defense Attorney

Do you need help with foreclosure defense, or do you have questions about the foreclosure process in Illinois? An experienced Oak Park foreclosure defense lawyer can help. Contact the Emerson Law Firm for more information.

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Remedy for Illinois Homeowners Who Faced Foreclosure

Recent Case Addresses Illinois Single Refiling Rule for Foreclosure

Remedy for Illinois Homeowners Who Faced Foreclosure

Did your home go into foreclosure, or were you facing the threat of foreclosure, while dealing with the mortgage servicer PHH Mortgage Corp.? You may be eligible for a financial remedy. According to a recent article in the Chicago Tribune, Illinois Attorney General Lisa Madigan reported that “Illinois residents who faced foreclosure or lost their homes due to alleged improper mortgage loan serving practices by PHH Mortgage Corp. are eligible to collect $1.5 million in cash payments as part of a nationwide settlement.” The company was sued by the attorneys general of every U.S. state except New Jersey, in addition to facing lawsuits from mortgage regulators. What else do you need to know about the settlement and its connection to the foreclosure crisis?

Alleged Improper Mortgage Servicing Practices By PHH Mortgage Corp.

What are the alleged improper mortgage servicing practices by PHH Mortgage Corp. that resulted in the recent settlement? According to the article, the company:

• Failed to properly apply homeowners’ loan payments;
• Failed to properly execute paperwork for foreclosures; and
• Failed to respond to borrowers’ requests for loan information.

As a result of these improper mortgage servicing practices, Attorney General Madigan and other attorneys general throughout the country contended that homeowners dealt with the uncertainty of foreclosure, and many actually lost their homes due to foreclosure. According to Madigan, “this settlement will provide some long-awaited relief to the homeowners who fell victim to PHH’s improper loan services practices.” Madigan went on to explain how, “under this agreement, PHH will be held accountable for its actions and must follow standards to prevent this conduct in the future.”

What kinds of remedies are available to homeowners under the terms of the settlement? If you lost your home through foreclosure and your mortgage was serviced by PHH Mortgage Corp., you may be eligible for a payment of at least $840. If you did not lose your home, but PHH initiated foreclosure proceedings, you may be eligible to receive a payment of at least $285. The alleged improper mortgage servicing practices occurred between 2009 and 2012, just as many Oak Park residents were still struggling to recover from the housing crisis. Upwards of 2,800 homeowners in Illinois could be eligible to receive a payment from the settlement.

Mortgage Servicing Rules from the CFPB

The Consumer Financial Protection Bureau (CFPB) issued a final Mortgage Servicing Rule in 2016, and it clarifies the obligations of mortgage servicers. Common complaints about mortgage servicers include but are not limited to the following:

• Failing to apply mortgage payments in a timely manner;
• Improperly applying mortgage payments;
• Failing to apply mortgage payments altogether;
• Charging egregious fees to homeowners;
• Dual-tracking (which involves the mortgage servicer working with a homeowner on a loan modification while moving forward with foreclosure proceedings); and
• Failing to provide information to consumers about their mortgages or the state of foreclosure proceedings.

When mortgage servicers harm consumers, they can be held responsible.

Seek Advice from an Oak Park Foreclosure Defense Attorney

Homeowners should not have to face foreclosure as a result of improper mortgage services practices. If you were harmed by a mortgage servicer’s practices, or if you have questions about the PHH Mortgage Corp. settlement, an Oak Park foreclosure defense lawyer can help. Contact the Emerson Law Firm to discuss your case.

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Assessing the Risks of a New Foreclosure Crisis

Could Illinois Benefit from Fast-Track Foreclosure Laws?

Assessing the Risks of a New Foreclosure Crisis

The foreclosure crisis that began in 2007 has now been over for a number of years, yet we have continued to discuss commentators’ concerns that the foreclosure crisis might not, in fact, be over entirely. Many homeowners in the Chicago area remain at risk of losing their homes due to their inability to make monthly mortgage payments on time, and many of those homeowners are dealing with complicated home loans that contain confusing terms. According to a recent article in Forbes Magazine, we may be at risk of another foreclosure crisis. Are the underlying reasons the same this time around? What can we do to prevent another consumer crisis?

Recalling the Reasons for the Housing Bubble Burst in 2007

As the Forbes article explains, most of us directly connect the foreclosure crisis that began about 10 years ago to the housing bubble burst and the subsequent “Great Recession.” What caused the foreclosure crisis the bursting of the housing bubble? In short, “for years beforehand, lenders had been giving out riskier and riskier mortgages, including waiving or lowering down payment requirements.” In addition, subprime mortgage resulted in numerous homeowners finding themselves underwater, or owing more money on their mortgages than their houses were actually worth on the market, meaning that even if they were to sell their properties, they would owe more money to the bank than they could afford.

Are we looking at similar conditions now, in 2017? The article suggests that “low- or no-down-payment mortgages may be making a comeback.” In other words, more homeowners that cannot actually afford to make monthly mortgage payments may be getting home loans that they could be at risk of defaulting on months or years down the road. Indeed, “several banks are now offering various zero-down mortgage programs or down payment assistance to higher-risk borrowers.” But the problem is not exactly the same as it was in the early 2000s. In large part, adjustable-rate mortgages have been linked to the first foreclosure crisis. Now, a different kind of loan may be responsible for consumer difficulties.

Down Payments Taxed as Income

One of the types of down payment assistance that is gaining popularity is a type of home loan that involves the bank providing for a 3% down payment and, in some cases, closing costs. While this deal might sound good to struggling families who want to buy a house, this kind of down payment assistance has hidden costs that many borrowers might not fully grasp. Specifically, “the down payment and closing costs can be taxed as income by the IRS.” What does this mean for the average low-income or moderate-income borrower?

If a 3% down payment and up to $3,500 are taxed as income, that could mean homebuyers could end up in a higher tax bracket, owing significant taxes as a result of making the decision to buy a home. For example, imagine that a borrower wants to buy a $200,000 home. A 3% down payment would total $6,000, and add the $3,500 closing costs to that amount for a total of $9,500. Now, the borrower would be taxed on that amount, adding thousands of dollars in the total tax owed for the year. For many low-income and moderate-income borrowers, this kind of tax bill could be debilitating, adding to additional debt issues.

Contact a Foreclosure Defense Lawyer in Oak Park

Do you have questions about current mortgage offers and foreclosure risks? An Oak Park foreclosure defense attorney can assist you. Contact the Emerson Law Firm for more information.

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Could Illinois Benefit from Fast-Track Foreclosure Laws?

Did Banks Undermine Federal Foreclosure Assistance?