MORTGAGE FORECLOSURE MEDIATION PROGRAM FORUM

COOK COUNTY CIRCUIT COURT

MORTGAGE FORECLOSURE

MEDIATION PROGRAM FORUM

AUGUST 18, 2011

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NDEPENDENT

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OTERS OF

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LLINOIS

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NDEPENDENT

P

RECINCT

O

RGANIZATIONS

Sandra Verthein

IVI-IPO Far North Chapter Chair

Special Thanks

Polish National Alliance

And

Grazyna Zajaczkowska

Director of Immigrant Services

Polish American Association

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Mary Hunter

IVI-IPO Far North Chapter Vice-Chair

Special Thanks

Polish National Alliance

And

Grazyna Zajaczkowska

Director of Immigrant Services

Polish American Association

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

Bridget Gainer,

Cook County Commissioner, 10

th

_District



Nicholas Bianchi,

Research Analyst, National People’s Action



Mathias Delort,

_{Associate Judge, Circuit Court of Cook County,}

Chancery Division



Daniel Lindsey,

_{Supervising Attorney,}

Home Ownership Preservation Project,

Legal Assistance Foundation of Metropolitan Chicago



Elizabeth Vitell,

_{Executive Director, Rogers Park Community Council &}

Rogers Park Community Development Corp.



Heather HainWhiteford,

Director,

Rogers Park Community Development Corporation

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Bridget Gainer

Cook County Commissioner, 10

th

_District

Office: 312-603-4210 Email: [email protected]

www.BridgetGainer.com



We Are All Affected by Foreclosures: The Real Costs of Foreclosures to Our

Communities



Current Mortgage Foreclosure Mediation Process and Case Flow



Expanded Mortgage Foreclosure Mediation Process and Case Flow



Recommendations for Measuring Results & Mediation Success

The Total Costs of a Foreclosure



What does 1 foreclosure cost?



$80,000



Cost to each homeowner losing home is

$10,337

(



Cost to local municipalities can exceed

$34,000

per property (



These costs include loss of tax revenue, increased policing, building inspections, legal expenses,

administrative costs to manage the foreclosure and more.



_{Foreclosures reduce nearby home values by}

_27%

(MIT December 2010)



_{Loss in value to neighbors’ home values within 1 block is}

_{$3,016 each}

_{(median home price of}

$167,500)



_{Projected loss in tax base and home value for Illinois in 2009-2010 is}

$27.3 Billion

.

(



75,112 homes were in the process of pending foreclosure in Cook County as of May

31, 2011.



At an estimated total cost of $6 Billion

to Cook County and Illinois in lost revenue and increased

administrative costs.

2

_{Adjusted for inflation}

Bridget Gainer, Cook County Commissioner – Tenth District

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Step 1:

Home Owner receives Summons & Complaint.

Step 2:

Statutory Reinstatement Period Starts

(3 months from date of service to “catch-up”)

Step 3:

Judgment of Foreclosure and Sale is entered if

home owner fails to catch up

Step 4:

Statutory Redemption Period Runs

(3 months from date of judgment or

7 months from date of service– whichever is

longer– to redeem by full repayment

Step 5:

Property goes to Judicial Sale

Step 6:

Confirmation of Sale and Order of Possession

is entered

Foreclosure Process

with

Mediation

Foreclosure Process

withou

t Mediation

Step 1:

Home Owner receives summons

Step 2:

Home Owner calls IDHA hotline; IDHA advises homeowner of eligibility for mediation program, e.g., live in Cook County, been served court summons, etc

Step 3:

Home Owner meets with IDHA counselor

Step 4:

Home Owner meets with CLS attorney

(prepare appearance, answer, and fee waiver

Motion for Mediation & Court appointed attorney)

Step 5:

Judge reviews file and orders Mediation or

Attorney prepares to Litigate rightful defenses

against foreclosure

Step 6:

1st mediation approx. 5 weeks after request

Step 8:

If there is an agreement, case dismissed

If there is no agreement, case resumes

Step 7:

2nd mediation approx. 8 weeks after request

Additional mediation if needed

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Step 1: Homeowner misses payment and foreclosure case filed by bank or servicer. Step 2: Court sends summons to homeowner. 60 days must elapse before 1st_{court date.}

(10 HUD-certified agencies reach out to these homeowners to encourage them to contact Cook County Foreclosure Mediation program)

Step 3: Homeowner calls IDHA hotline to set up 1-hour appointment with housing counselor at 69 W. Washington, 14th_{Floor and Room 1303 of the Daley}

Center.

Step 4: Homeowner meets with court-based housing counselor who performs the initial assessment of the best options for the borrower (i.e., loan modification, deed-in-lieu, short-sale, or rent). Counselor makes recommendation

Documents Needed: Recent pay stubs, proof of alimony or child support, Social Security, and any other income, most recent mortgage statement(s), homeowner’s insurance, last 2 months of bank statements, account balances and monthly payments on other outstanding debt, including property taxes, homeowner association/condo fees, credit cards, student or car loans, alimony, and utility bills.

Obstacle: Homeowner intimidated or unwilling to come downtown. Not prepared.

Usual Outcome: Application for loan modification

Step 1: Homeowner meets for 1 ½ hour with attorney at court to complete documents to be filed with the court. (69 W. Washington and 28th_{Floor of Daley Ctr.)}

Step 2: Attorneys determine if there is a legal defense to against the foreclosure, including fraud. Step 3: Absent legal defense, attorney

assists homeowner in completing an appearance form, screen for any potential jurisdictional issues, and preparation of motion to request mediation, if applicable. Rights explained to homeowner.

Goal: Can homeowner avoid court and foreclosure altogether.

Outcome: Homeowner leaves meeting in 1 of 3 positions:

1) Motion for Referral for Court Appointment of Attorney to litigate any defenses

2) Motion for Referral to Mortgage Foreclosure Mediation

3) Homeowner declines help from legal aid attorneys and opts to prepare motions on his/her own

60 days after filing, homeowner appears in court to check in with the in-court attorney.

Homeowner goes 1 of 2 directions:

Litigation Track Mediation Track

No contest/ default (homeowner fails to appear or says s/he does not want to contest the foreclosure) Stays in court for litigation Possible Defense Homeowner referred to Access to Justice attorney

Court enters Case Management Order referring case to Mediation (all parties in court agree to mediate the case – handled by Center for Conflict Resolution) 1

Appear in court to advise of result of mediation No Agreement Reached 39% 3 Agreement Reached -61% so far (Successful Mediation) 4 1. Home retention (loan modification), 2. Partial agreement, 3. Voluntary relinquishment (short-sale, deed in lieu, homeowner leaves)

STAGE 1: Info Gathering, Assessment,

and Recommendation

STAGE 2: Legal Assessment

_{STAGE 3: MEDIATION}

Homeowner and Lender get 12 weeks to do a minimum of 2 mediation sessions to reach an agreement. 2

Homeowner and Lender get additional mediation sessions 5

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Nicholas Bianchi

Research Analyst, National People’s Action

Office: 312-676-2806 Email: [email protected]

www.npa-us.org



June 2011 Report “No End In Sight: Home Foreclosures in Cook County Il”



Findings and Foreclosure Data Summary through May 2011



Future Foreclosure Trends for Cook County and the North Side of Chicago

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• Foreclosure Started (Jan. 2010 to May 2011)

A report of

NATIONAL PEOPLE’S ACTION

810 North Milwaukee Avenue • Chicago, IL 60642 • 312.243.3035•www.npa-us.org

Author: Nicholas Bianchi June 2011

www.showdowninamerica.org/research

No End In Sight

Home

Foreclosures

in

Cook County,

IL

2010

–

1

st

_{Half 2011}

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Number of Homes Foreclosures, Cook County, IL

2007—2011

0

10,000

20,000

30,000

40,000

50,000

2007

2008

2009

2010

2011 Projected

Projected 2011

Chicago

Suburban Cook

Prepared by National People’s Action

Data Source: Record Information Services, Inc.

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Prepared by National People’s Action

Data Source: Record Information Services, Inc.

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Prepared by National People’s Action Data Source: Record Information Services, Inc.

Northern Cook County Home Foreclosure Hot Spots

Percent of Total Housing Units in Foreclosure

Prepared by National People’s Action

Data Source: Record Information Services, Inc.

Cook County Home Foreclosures

by Mortgage Type and Interest Rate

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Prepared by National People’s Action

Data Source: Record Information Services, Inc.

North Side Chicago and Cook County Foreclosures

INDEPENDENTVOTERS OFILLINOIS– INDEPENDENTPRECINCT ORGANIZATIONS

40.5%

35.7%

17.2%

3.3%

2.5% 0.4%

0.1%

0.1%

North Side Foreclosure Filings by Property Type

Jan 2010 - May 2011

SINGLE FAMILY RESIDENCE

CONDOMINIUM

APARTMENT BUILDING

TOWNHOME

COMMERCIAL PROPERTY

VACANT RESIDENTIAL

INDUSTRIAL

VACANT COMMERCIAL

Prepared by National People’s Action

Data Source: Record Information Services,

Inc.

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Cook County

Home

Foreclosures

Jan. 2010 –

May 2011

• Foreclosure Started (Jan. 2010 to May 2011)

Prepared by National

People’s Action

Data Source: Record

Information Services, Inc.

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Mathias Delort

Associate Judge, Circuit Court of Cook County,

Chancery Division

Help Line: 877-895-2444 or 312-836-9222

www.cookcountyforeclosurehelp.org



Judicial Perspective: What You Can and Should Do When Facing

Foreclosure.



Explanation of the Cook County Circuit Court Mortgage Foreclosure

Mediation Program process.

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Circuit Court of Cook County

MORTGAGE FORECLOSURE MEDIATION PROGRAM

FORECLOSURE HELP IS A PHONE CALL OR CLICK AWAY

The Circuit Court of Cook County Mortgage Foreclosure Mediation Program provides

FREE help to

homeowners in foreclosure. You may be able to reach an agreement with your lender about your

mortgage.

Am I Eligible?

To participate in the mediation program, homeowners must:

be residents of Cook County

have received a foreclosure summons from the Circuit Court of Cook County

live in the building in foreclosure – which may be a single

‐

family home, single

‐

family condominium or

apartment building with four or fewer units.

What Can I Do?

Call the toll

‐

free help line at 877.895.2444

(312.836.5222 TDD) Monday – Friday between 8:30 a.m. and 6:00 p.m. to schedule a free meeting with a

housing counselor, followed by a consultation with an attorney. Or, request an appointment online at

www.CookCountyForeclosureHelp.org.

*Homeowners concerned about their mortgages, but who have not received a summons from the court

and are not currently in foreclosure, should consult

www.CookCountyForeclosureHelp.org for a list of

available resources.

Daniel Lindsey

Supervising Attorney, Home Ownership Preservation Project,

Legal Assistance Foundation of Metropolitan Chicago

HOPP Office:

3

12/431-2204 Client Screening Unit: 312-341-1070

www.lafchicago.org



Overview of the Home Ownership Preservation Project



Attorney Perspective From the Front Line: Foreclosure Mediation Efforts



Barriers to Seeking Help and Obtaining Relief When Facing Foreclosure

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Elizabeth Vitell,

Executive Director

Rogers Park Community Council &

Rogers Park Community Development Corp.

RPCC Office: 773-338-7722 www.RogersPark.org



_{Tenant Rights in the Foreclosure Process}



Tenant Access to Cook County Circuit Court Foreclosure Mediation Program.

Heather HainWhiteford,

Director

Rogers Park Community Development Corporation

RPCDC Office: 773-262-2290 www.RogersParkCDC.org



Role of the Housing Counselor & Overview of Current RPCDC Caseload



RPCDC Expanding Role in the Court’s Foreclosure Mediation Program



_{HUD Certified Counselor Perspective on Mediation Efforts.}

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Role of the Housing Counselor



Review financial situation



Provide unbiased information and options



Negotiate with lender where applicable

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Provide other resources and referrals as needed

HUD Certified Counseling is FREE!

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How to spot a loan mod scam:



1. You’ve been asked to pay a fee upfront



2. You’ve been guaranteed a loan modification



3. You’ve been told to stop paying your mortgage



4. You’ve been asked to sign paperwork you don’t understand

To report a suspected loan mod scam:



www.LoanScamAlert.org



www.PreventLoanScams.org

HUD Certified Counseling is FREE!

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Sandra Verthein

IVI-IPO Far North Chapter Chair

Special Thanks

Polish National Alliance

And

Grazyna Zajaczkowska

Director of Immigrant Services

Polish American Association

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