To Boost the Chicago Real Estate Market, Complete More Foreclosures

Why might it be a good thing for more foreclosures to be completed in Chicagoland? You might be asking yourself: Does this mean more people losing their homes to foreclosure? Generally speaking, the desire to speed up the foreclosure process on properties throughout the Chicago area does not come from a desire for new foreclosure processes to begin. Instead, it is usually a plea to complete the foreclosure process on homes that have long been empty and, as a result of their status as foreclosures, damaging the real estate market. According to a recent article in the Chicago Tribune, “real estate values in Chicago and many of its suburbs have not fully rebounded from the Great Recession of 2008,” especially when you look at Chicago’s statistics in relation to other urban areas.

What is the problem when it comes to Chicago’s real estate market? In short, there are still too many uncompleted foreclosures, and they are harming economic recovery.

Housing Market in Chicago Lagging Behind

As the article explains, a recent story in Crain’s Chicago Business reported that “home prices here over the past decade have lagged the national recovery by about 20%.” In practice, what that means is that Chicago has lost out on about $107 billion total, which “has huge ramifications for the area’s economy.” How is the rest of the economy in the Chicago area impacted by home sales that are, on average, lower than the national rate?

In short, when the real estate market is weak, it has long-term effects. For instance, if a homeowner knows that she cannot put a certain price tag on her house or condo if she plans to sell it, then she is likely to spend less money in general—not just when it comes to her home, but on consumer items, as well. In addition, statistics suggest that homeowner is also going to be “more resistant to paying higher taxes.” The fact that property tax referenda in Chicago have failed, according to the Chicago Tribune article, are indicative of this trend.

Foreclosures May be to Blame for Chicago’s Less-Than-Stellar Real Estate Market

What is leading to the weak Chicago real estate market? While there are no definitive studies that can point to a single factor, some commentators believe that the underlying problem is lingering foreclosures. As the article intimates, the city of Chicago has “yet to come to grips with the enormity of the damage caused by the tsunami of residential foreclosures here in the late 2000s.” Why are foreclosures to blame? The article compares Chicago’s statistics to those of other cities that are also behind the curve in terms of real estate market recovery. For instance, like Chicago, Miami, Tampa, Phoenix, and Las Vegas are also experiencing a relatively weak real estate market. What do all of these cities have in common? They were among the “hardest hit by foreclosures.”

It takes a long time for the foreclosure process to reach completion in Cook County. Although the total number of properties in various stages of foreclosure has declined dramatically since the late 2000s, many properties remain in the system.

Contact a Chicago Foreclosure Defense Lawyer

Do you have questions about avoiding foreclosure or dealing with a property that is already in foreclosure? An experienced foreclosure defense attorney in Oak Park can help you. Contact the Emerson Law Firm to learn more.

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Homeownership Hurdles and Post-Foreclosure Stress Disorder

Foreclosures Down Nationwide, But Not in Illinois

Homeownership Hurdles and Post-Foreclosure Stress Disorder

The financial crisis may be over for the most part in Oak Park, but memories of the foreclosure epidemic remain in the minds of many Americans. Indeed, according to a recent article in Mortgage Orb, knowledge of the foreclosure crisis could be one of the factors that is leading fewer Americans to become homeowners over the last several years. If there are fewer homebuyers out there, then the real estate market is unlikely to grow.

How might the foreclosure crisis be impacting home sales in the present?

New Study Discusses Low Rate of Home Ownership

The article discusses a recent study conducted by researchers at the Fisher Center for Real Estate & Urban Economics at the Haas School of Business at University of California, Berkeley, in conjunction with the Rosen Consulting Group. From the study, the researchers produced a report entitled, “Hurdles to Homeownership: Understanding the Barriers.” The study seeks to illuminate reasons for low real estate market growth “despite steadily improving job markets and historically low mortgage rates.”

In other words, most factors suggest that we should be seeing a growing real estate market, but the opposite seems to be true. The authors of the study indicate that, with all other factors being equal, we should have seen approximately 900,000 more home purchases in 2016 than we did. What is the problem? There are some issues we might expect, according to Ken Rosen, who is the chair of Rosen Consulting Group and the Fisher Center. As Rosen articulates: “Ten years after the Great Recession, major barriers remain for households trying to buy a home. Limited mortgage availability and excessive bank regulation restricts nearly a million households from purchasing homes each year.”

Yet affordability and supply are only two pieces of the puzzle. It is possible that there are two much more salient causes for the lack of growth in the real estate market: what the authors of the study call “post-foreclosure stress disorder,” as well as spiking levels of student loan debt.

What is “Post-Foreclosure Stress Disorder,” and How Does it Impact the Real Estate Market?

What is “post-foreclosure stress disorder”? After a major economic downturn like the relatively recent financial crisis, potential homebuyers may experience anxiety when it comes to taking a major financial risk such as that required to buy a home. As Rosen explains, “many households now suffer from post-foreclosure stress disorder, an altered perception of the financial risks associated with homeownership.” In order to reinvigorate the real estate market, Rosen emphasizes that this so-called “post-foreclosure stress disorder” will need to be addressed.

It is possible that post-foreclosure stress disorder is compounded with student loan debt, as well. As the article highlights, in 2015, the average student loan payments was $300 per month, which is about 20% of the median mortgage payment. In other words, many would-be homeowners with significant student loan debt cannot afford to buy a house (or buying a house might be financially difficult). That fact, combined with post-foreclosure stress disorder, may be contributing substantially to the current rate of home buying in the country.

Contact a Foreclosure Defense Lawyer

Some families experience anxiety about foreclosure because they are still at risk of losing their homes. If you have questions about avoiding foreclosure, an experienced Oak Park foreclosure defense lawyer can answer those questions for your today. Contact the Emerson Law Firm for more information.

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Foreclosures Down Nationwide, But Not in Illinois

Mortgage Default Reach Recent High in Chicago

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