DELAYED IL FORECLOSURE NOTICES NOW ARRIVE FOR DISTRESSED HOMEOWNERS!
NO EXPECTED FALL OFF IN IL MORTGAGE LOAN DEFAULTS!
There is one inherent problem with government-mandated moratorium, or "cooling off" periods. They eventually expire, and those who benefited from the delay are now subject to what the stall period was dealing with.
Here in IL, last April, our new Governor Pat Quinn signed the Illinois Homeowners Protection Act into law. That new law prevented a bank from initiating a foreclosure action within the first 30 days of mortgage loan delinquency. A second thirty day period would allow lenders to notify delinquent borrowers they have the opportunity to seek foreclosure counseling, while a third thirty-day period provides time to create a special loan workout or modification agreement with a HUD-Approved Housing Counselor.
See Mary Ellen Podmolik's story in Thursday's Chicago Tribune for more.
With the initial waiting period dictated by the new law now at an end, lenders are beginning to file an in ceased number of foreclosure actions. Furthermore, according to U.S. Treasury Department figures, only 9% of eligible, late-paying homeowners have been offered three-month loan modification trials.
Last April, initial default notices were filed on 5.539 homes in the Metro Chicago Area. They dropped to just under 1,700 in May, then rose again in June, to 3,468, according to the Woodstock Institute, a research group.
Some interesting numbers in the Woodstock study. Although lower-income areas, as many would predict, have the highest total number of filed foreclosures (the Austin Neighborhood of Chicago, on the Low-Income West Side, had 446 foreclosure notices mailed from the beginning of the year until the end of June, 2009. But the foreclosure numbers were actually 2% lower than they were for the same period in 2008.
By contrast, in the affluent Lincoln Park Neighborhood on the North Side of Chicago, 81 default notices were mailed during the first six months of 2009. But these 81 represented a 161% increase over last year!
According to the Illinois Department of Financial and Professional Regulation, roughly 2,000 homeowners are calling each month asking for a housing counselor, as a result of their receiving Grace Period Notices from their lenders.
Now, with the initial grace period ending, however, IL now ranks Number 5 in the number of initial foreclosure notices sent to distressed homeowners in July, according to data by CA Foreclosure Research Company Realty Trac.
In July, 14,524 homes across IL were at some stage of the foreclosure process. Also last month, 6,770 IL Homeowners received their initial Notice of Default. That's up from the 3,648 Initial Default Notices sent in June, 3,139 in May, but slightly higher than the 6.407 default notices mailed in April.
Actual homes taken and repossessed by banks in July jumped as well - to 3,700 homes across IL.
DEAN MOSS & DEAN'S TEAM CHICAGO
