Mortgage Foreclosure Mediation Programs Grow Across Illinois

Is the foreclosure crisis really over? Even when unemployment is low and the economy looks good, Illinois residents continue to struggle with mortgage payments and to worry about the looming threat of home foreclosure. While many Chicago residents experience foreclosure-related anxieties, Illinois residents across the state have concerns about how they can keep their houses even in the face of financial difficulties. South of Chicago, officials in Macon County have filed an application with the Illinois Supreme Court to begin a mortgage foreclosure mediation program similar to the one currently in place in Cook County.

Foreclosure Mediation Program in the Works in Decatur

Across the state of Illinois, counties have developed mortgage foreclosure mediation programs to help borrowers remain in their homes. A program like this already exists in Cook County, and Macon County officials just recently sought approval for something similar, according to a recent article in the Macon Herald Review. The plan in Macon County, if approved, would “require the lender and the borrower in a foreclosure case to meet with a trained impartial mediator, who would explore ways the borrower’s mortgage loan could be reworked or reinstated.” Then, if the medication proves unsuccessful, the borrower’s mortgage would “proceed to circuit court for foreclosure.”

An Illinois judge indicated that the Decatur program could go into effect as early as next year, and it could help a lot of families that remain at risk of foreclosure. According to Macon County Presiding Judge A.G. Webber, “we thought it was worth looking into anything that might, at least in some cases, preserve homes and prevent the problem that foreclosed homes have on the community.” In other words, the program could prevent more properties from “falling into disrepair,” thereby “hurting the property value of the area.” This is a problem that’s already all to common in many of Chicago’s neighborhoods.

The program wouldn’t run entirely on its own. Rather, it would work as a kind of partnership with the Community Preservation Clinic at the University of Illinois College of Law. Through the clinical training, law students can receive training as mediators, and they could use that knowledge and expertise to assist residents of Macon County who are facing the threat of foreclosure. Funding for the program would come from the Illinois Attorney General’s Office.

Thriving Mortgage Mediation Program in Cook County

While Macon County is just now seeking to implement a mortgage foreclosure mediation program, Cook County already has this important resource for Chicago-area residents at risk of losing their homes. According to the Circuit Court of Cook County, the mediation programs aims to “deliver critical services to Cook County homeowners in crisis as early as possible once the foreclosure process begins.” In short, if you’re having difficulty making mortgage payments, you need to take advantage of the mediation program sooner rather than later.

And the program in Cook County recognizes that some homeowners simply won’t be able to stay in their houses. As such, the Circuit Court emphasizes that, in addition to discussing options to stay in their homes, the mediation program also can help Chicagoans to “negotiate a respectable exit” from their properties.

Dealing with foreclosure can be a stressful and anxiety-inducing experience. You shouldn’t have to handle difficult legal and financial questions on your own. Contact the experienced Chicago consumer protection lawyers at the Emerson Law Firm to learn more about how we can assist you.

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Lower Mortgage Down Payments from Fannie Mae and Freddie Mac

Post-Foreclosure “Hell” for Many Americans

Lower Mortgage Down Payments from Fannie Mae and Freddie Mac

The housing market is recovering, and fewer Chicago residents are worrying about home foreclosure.  But has the economy bounced back enough to make consumers comfortable buying a home?  According to a recent article in the Chicago Tribune, Fannie Mae and Freddie Mac may soon permit consumers to obtain a mortgage “with as little as a 3 percent down payment.”

Reasons for the New Down Payment Terms

If Fannie and Freddie begin allowing 3 percent down payments from consumers who want to buy a home, it won’t be the first time.  Indeed, in 2011, both agencies had accepted down payments as low as 3 percent.  Fannie Mae stopped last year (requiring at least a 5 percent down payment), while Freddie Mac had stopped back in June of 2011.

Why return to 3 percent down payments?  In short, many consumers in Oak Park and across the country are creditworthy, but they don’t have enough cash for a down payment.  As Mel Watt, the director of the Federal Housing Finance Agency (FHFA) explained, “through these revised guidelines, we believe that the enterprises will be able to responsibly serve a targeted segment of creditworthy borrowers with lower down payment mortgages by taking into account compensating factors.”

Watt oversees Fannie and Freddie.  He elaborated that the new guidelines will add “another much-needed piece to the broader access-to-credit puzzle.”  In addition, the government has developed other policy initiatives aimed at making lenders “mort comfortable” with the guidelines.  Watt hopes that, in turn, those lenders “will loosen their purse strings.”

How Will the New Guidelines Affect Mortgages?

According to Dan Gjeldum, the senior vice president at the mortgage lender Guaranteed Rate, the new guidelines are “a very big deal,” since they’ll “dramatically reduce the expense for a first-time homebuyer.”  Gjeldum explained that, “the easier it is to do business with the agency, the easier it’s going to be for consumers to work with mortgage companies.”

It’s important to understand that home loans aren’t coming directly from Fannie Mae and Freddie Mac.  Rather, mortgages backed by the agencies work like this: when a certain mortgage meets the Fannie and Freddie requirements, a lender will sell the mortgage to the agencies.  In turn, Fannie and Freddie will “package them into securities and sell them to investors.”  These investments are guaranteed, “which means that investors recoup losses if the homeowner defaults.”  In other words, a guaranteed mortgage looks better to investors, since they’re not taking a huge risk.

However, such assurances have resulted in a “more cautious lending environment,” which tends to hurt potential new homeowners who have good credit but don’t have enough cash for a 5 percent (or more) down payment.  The average FICO credit scores for borrowers was between 742-744 for Freddie Mac and Fannie Mae in 2013.

Since borrowers who make a down payment of less than 20 percent usually will pay more for insurance until their home equity hits 20 percent, that’s actually good news for the insurance industry.  In short, borrowers who get a mortgage with only a 3 percent down payment will have a longer mortgage insurance period.  The FHFA hopes that its new guidelines will prevent housing recovery from stagnating further.

Do you have questions about buying a foreclosure or learning more about your rights as a consumer?  Contact an experienced Chicago consumer protection lawyer at the Emerson Law Firm today.

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Post-Foreclosure “Hell” for Many Americans

New Statistics on Chicago Area Foreclosure Starts

Attorney Sandy Emerson Dispensing Advice on TV Tonight!

Oak Park bankruptcy and foreclosure attorney Sandy Emerson will be appearing tonight on "Real Money with Ali Velshi."

Attorney Emerson will discuss relevant money issues at 7pm EST tonight on the popular show on AlJazeera America. Be sure to tune in to check it out!

Post-Foreclosure “Hell” for Many Americans

The housing crisis is over, and many Chicago residents are hard at work to rebuild their finances after foreclosure.  However, according to a recent article in Reuters that cites the Emerson Law Firm’s Sandra Emerson, these Americans “are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages, and seizing their assets.”

Deficiency Judgments and Post-Foreclosure Financial Problems

When we hear about foreclosure, the immediate concern for most of us is the prospect of losing a home.  To be sure, when a property goes into foreclosure, an Oak Park consumer with a long history of residing in that house can find himself without a place to live.  And while the thought of foreclosure produces anxiety for many residents of the Chicago area, post-foreclosure problems may prove to be even more stress-inducing than the prospect of foreclosure itself.

What’s happening?  In short, most banks have sold properties that went into foreclosure, but those sales didn’t produce enough revenue to cover what the debtor owed (in terms of the loan, as well as penalties and legal fees).  As such, lenders have been trying to obtain that lingering debt from borrowers.  In order to seek out this money, lenders can use “deficiency judgments.”

What are deficiency judgments?  In short, they’re judgments that “can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come.”  Debtors can have their wages garnished and their assets seized so that the lender recoups what it’s owed.  In a number of cases, these debtors don’t see this legal tool coming.  After facing foreclosure years ago, consumers who had financial troubles when the real estate market crashed have since gotten their lives back on track.  Indeed, many have even been able to purchase new homes and have been making regular monthly mortgage payments.

“Huge Uptick” in Deficiency Judgments, Says Sandra Emerson

According to the article, most borrowers are surprised to learn that they “still owe thousands of dollars on homes they haven’t thought about for years.”  And indeed, these lawsuits that seek to recover those funds are on the rise.  Sandra Emerson, a dedicated homeowner attorney in the Chicago area, emphasized the increase in deficiency judgments.  She told Reuters, “I’ve definitely noticed a huge uptick,” and she emphasized that, in previous year, “they didn’t include language in court motions to pursue these.  Now, they do.”

Are deficiency judgments fair?  Or do consumers deserve a break after recovering from the recent financial crisis?  If you ask a bank advocate, that person will tell you that deficiency judgments are fair, as “former homeowners ought to pay what they owe.”

But if you ask a consumer advocate, that person might tell you that “deficiency judgments blast those who have just recovered from financial collapse back into debt,” which is especially problematic when “the banks bear culpability because they made the unsustainable loans in the first place.”

Bankruptcy May Help Consumers in Post-Foreclosure Crises

What options are available to consumers who have been saddled with deficiency judgments?  One option is personal bankruptcy.  Although consumer bankruptcy can significantly affect your credit and can make it difficult to find creditors for home loans or credit cards, it might be able to wipe away your debts.

Have you been affected by a deficiency judgment?  If you have questions about your rights as a consumer, it’s important to speak with an experienced Chicago consumer law attorney.  Contact the Emerson Law Firm today to learn more about how we can assist you.

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New Statistics on Chicago Area Foreclosure Starts

Avoiding Foreclosure: The Emerson Law Firm Discusses Ways to Save Your Home

New Statistics on Chicago Area Foreclosure Starts

Throughout the housing crisis, Illinois ranked among the top states in the nation for its total number of foreclosures.  Indeed, many neighborhoods saw housing prices decline rapidly with the rise of abandoned properties and hundreds of families that couldn’t make monthly mortgage payments.  Yet it looks like the Chicago area has reached new levels of recovery, according to a recent article in DSNews.com.

Specifically, based on data gathered by the Woodstock Institute and released earlier this month, “the number of foreclosure filings in a six-county region in Illinois dropped by nearly 38 percent from the first half of 2013 to the first half of 2014.”  The six counties included McHenry, Lake, DuPage, Kane, Cook, and Will.  What does this mean in terms of financial recovery? The foreclosure starts are at the lowest level seen since 2007—in other words, the new data suggests that foreclosure starts have returned to a pre-recession level.

Fewer Foreclosures in Chicago?

If foreclosure filings have finally reached a pre-recession low, does this mean that fewer foreclosures are happening?  Foreclosure filings, which are also known as foreclosure starts, “are the first step toward foreclosure,” the article explains.  This means that fewer homes are actually going into foreclosure.  However, the drop in foreclosure filings doesn’t necessarily mean that fewer foreclosure auctions are taking place.

Different from foreclosure filings, which are the first stage in foreclosure process, foreclosure auctions are the final stage in the foreclosure process.  And foreclosure auctions have actually shown “a less drastic year-over-year decline.”  In other words, foreclosure auctions haven’t reached the same pre-recession low.    

The data from the Woodstock Institute about foreclosure starts in the six-county region looked like this:

·      22,342 foreclosure filings during the first half of 2013

·      13,916 foreclosure filings during the first half of 2014

·      Drop of 37.7 percent from 2013 to 2014

The Woodstock Institute reported the following information about foreclosure auctions in the six-county region:

·      16,332 foreclosure auctions in the first half of 2013

·      13,602 foreclosure auctions in the first half of 2014

·      Drop of 16.7 percent from 2013 to 2014

Adjusting for the Aftermath of the Foreclosure Crisis

The decline in both foreclosure starts and foreclosure auctions is a good sign for Chicago.  But will government officials need to adjust plans for recovery in light of these numbers?  According to Spencer Cowan, the vice president of the Woodstock Institute, “the decreasing number of new properties entering the foreclosure pipeline means policymakers will need to adjust the tools they are using to address the foreclosure crisis and its aftermath.”

What kinds of issues will policymakers need to address?  According to Cowan, “there are still thousands of homeowners entering the foreclosure process who will need guidance on how to avoid losing their homes whenever possible,” along with “tens of thousands more who lost their homes and who are struggling to rebuild their lives.”

Indeed, the foreclosure crisis continues to impact many Chicago-area residents despite the fact that foreclosure numbers have fallen.  If you have questions about foreclosure in Oak Park and throughout Illinois, contact the experienced consumer protection attorneys at the Emerson Law Firm.

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Avoiding Foreclosure: The Emerson Law Firm Discusses Ways to Save Your Home

Remnants of the Foreclosure Crisis

Avoiding Foreclosure: The Emerson Law Firm Discusses Ways to Save Your Home

Earlier this month, Sandy Emerson talked with Illinois Homes about how the Emerson Law Firm can help consumers who are facing foreclosure.  Back in 2000, Sandy Emerson established the firm after “witnessing the rampant abuses in the debt collection and mortgage servicing industries.”  While the firm focuses on consumer law today, the attorneys at the Emerson Law Firm continue to assist clients with foreclosure defense, loan modifications, real estate matters, and other consumer issues.

Homeowners Can Stop a Foreclosure

Many struggling homeowners operate under the misconception that there’s nothing to be done about a foreclosure.  Yet it’s important to know that, at the Emerson Law Firm, the dedicated foreclosure defense attorneys stop foreclosures every day.  In her interview for Illinois Homes, Sandy Emerson emphasizes that, unlike other foreclosure defense firms, the Emerson Law Firm is “a home preservation firm.”

What does that mean?  In short, the consumer attorneys at the Emerson Law Firm will not simply litigate in order to “buy time” before a foreclosure.  Instead, there are a number of options that a foreclosure defense attorney can help you with to ensure that you get to keep your home.  For example, if you’re eligible for a loan modification, we can help you to get your mortgage payment modified.  You also may be able to prevent foreclosure with a deed in lieu or a short sale, but many other loss mitigation options exist, too.  We have years of experience helping Chicago residents to stay in their homes, and we understand the many different options that exist for clients who face foreclosure.

In some cases, a lender won’t comply with all of the state and/or federal foreclosure requirements, and the foreclosure defense attorneys at the Emerson Law Firm can help.  For instance, if a loan servicer doesn’t comply with certain notice requirements under state or federal law, you might be able to use that as a defense to foreclosure.  A foreclosure defense attorney can assess whether a loan servicer has violated notice requirements under the Fair Debt Collection Practices Act or the Code of Federal Regulations.

However, it’s important to remember that defenses to foreclosure must be brought within a particular period of time.  The longer you wait to raise a defense, the greater the likelihood that you won’t be able to use that defense at all.  As such, you should speak to an experienced foreclosure defense attorney as soon as possible.

Foreclosure Regrets

When it comes to facing foreclosure, homeowners often regret that they didn’t speak to a foreclosure defense attorney sooner.  The sooner you talk with a foreclosure defense lawyer, there’s a better chance that you’ll be able to raise defenses to the foreclosure.

According to Sandy Emerson, many clients call the Emerson Law Firm just a day or two before their homes are being sold through a foreclosure auction in hopes of stopping the sale.  Short of filing for bankruptcy, it’s difficult to save homes that have reached this stage.  The key to stopping a foreclosure is speaking to an attorney as soon as possible.  Sandy Emerson explains that, “if a homeowner wants to save the home, we have the most bargaining power when we are involved early in the case.”

Contact a Foreclosure Defense Lawyer

You can reach the Emerson Law Firm by phone at (708) 660-9190 or by filling out an electronic message form.  If you are at risk of losing your home because you’re having difficulty making mortgage payments, contact a foreclosure defense lawyer as soon as possible to discuss your case.

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Are Big Banks Overcharging Foreclosure Fees?

Remnants of the Foreclosure Crisis

Are Big Banks Overcharging Foreclosure Fees?

According to a recent article in Reuters, it’s possible that at least five large banks may have “overcharged the government for expenses incurred during foreclosures on federally backed home loans.”  Which banks have been implicated?  Based on filings with the Securities and Exchange Commission (SEC), the banks involved are PNC Financial Services Group Inc., PHH Corp., MetLife Inc., Santander Holdings USA Inc., and Citizens Financial Group Inc.  Citizens is the U.S. “unit” of the Royal Bank of Scotland.  The banks have all received subpoenas that seek to uncover information about the fees at issue.

Foreclosure rates are continuing to wane across the country.  And although Illinois is still near the top of the list of states affected by foreclosures and delinquencies, the market is bouncing back.  However, the fact that the real estate market is in recovery doesn’t mean that banks can get away with fraud or overcharging for expenses related to foreclosures.  Indeed, the recent investigation suggests that the SEC and other organizations continue to investigate lending and foreclosure practices from the peak years of the housing crisis.

If you have questions about foreclosure fees and your rights as a borrower, it’s important to get in touch with an experienced Chicago foreclosure defense lawyer.  An attorney at the Emerson Law Firm can speak to you today.

Details of the Bank Subpoenas and Foreclosure Expenses

Based on information contained in the Reuters article, it looks as though the U.S. Attorney’s office has issued subpoenas to those banks in order to obtain “information on claims on foreclosed loans insured by the Federal Housing Administration or guaranteed by Fannie Mae and Freddie Mac.”

Why are the subpoenas coming now, in a period that Reuters describes as “years after the height of the foreclosure crisis”?  In short, the SEC, along with many different consumer advocacy groups across the country, is attempting to really “clean up” the mortgage-servicing industry.  Given all the problems involving mortgage servicers and consumer fraud over the last six years, it shouldn’t come as a surprise that consumer rights groups continue to look into these matters.

But what is distressing, according to Ira Rheingold, the director of the National Association of Consumer Advocates, is that consumer rights advocates are “seeing the same servicing problems over and over.”  Indeed, Rheingold contends that overcharging is a practice that has been “built into” mortgage-servicing procedures.  As a result, servicers have learned “to charge as many fees as they could.”

The new interest in fee-related practices has also arisen with renewed use of the Financial Institutions Reform, Recovery and Enforcement Act.  As of late, the Justice Department has been relying on that law to “pursue cases against banks.”  And for many advocate groups, it makes sense to take a closer look at these banking practices now that we’re out of the woods with regard to the economic crisis.  Given the extremely high percentage of loans that were delinquent or in foreclosure between 2009 and 2012—a total of approximately 10 percent—between $6 trillion and $7 trillion are connected to loans connected to the economic downturn.  It’s important to know whether those mortgages have been affected by bad banking practices.

Do you have questions about foreclosure or mortgage-servicing practices in Illinois?  Contact an Oak Park foreclosure lawyer today.

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