A new foreclosure program in Philadelphia has been so successful there that Cook County Clerk of the Circuit Court Dorothy Brown said the county should duplicate to slow the rash of foreclosures here.
A new foreclosure program in Philadelphia has been so successful there that Cook County Clerk of the Circuit Court Dorothy Brown said the county should duplicate to slow the rash of foreclosures here.
Brown and other elected officials joined Action Now, a Chicago housing non-profit organization, at a Tuesday news conference to propose a local version of the Philadelphia Residential Foreclosure Diversion Pilot Program, a foreclosure diversion program that has proven successful in East Coast city.
The program, which is the first city-sponsored plan in the United States, brokers negotiations between mortgage lenders and homeowners who have fallen behind in their payments, Brown explained.
And in Philadelphia, it prevented or delayed foreclosures in 80 percent of 552 cases. Essentially, it requires all owner-occupied properties scheduled to be foreclosed and sold by the Sheriff’s office to have their mortgages reviewed by borrowers, lenders and the court before they can be sold.
“If we can get this program in Chicago, it would give homeowners the opportunity to negotiate with the banks to save their homes or work out payment arrangements. It would also be beneficial to banks because lenders lose money when borrowers default,” said Denise Dixon, executive director of Action Now. “We are urging Cook County judges to pass this program and save our homes for the holidays.”
From a national standpoint, mortgage loans in foreclosure leaped to a 29-year high of 2.47 percent by the end of the first quarter of 2008, from 2.04 percent in the fourth quarter of 2007, according to the Mortgage Bankers Association, an industry trade group.
So far this year, 44,000 foreclosures have taken place in Cook County, which is an average of 3,700 a month, said Alderman Willie Cochran (20th).
“It’s time for homeowners to reap some benefits from lenders who are making money off them,” he said.
“All we’re asking is that homeowners be given a little air so they can get back on track just like the financial industry is receiving from government bailouts.”
In October alone, Brown said there were a record 4,000 foreclosures in Cook County.
“Abandoned properties in the middle of the block bring down property value and breeds crime, two things destroying neighborhoods today,” Brown said. “Bottom line, we need some mandatory legislation to temporarily halt foreclosures as a cooling off period for homeowners to regroup and for us to implement a diversion program similar to the one in Philadelphia.”
Thanks to Action Now, some homeowners have been able to avoid foreclosure.
Flora Johnson was three months behind in her mortgage, which was held by Countrywide, and she was facing foreclosure until Action Now stepped in.
“Action Now assisted me in setting up a face to face meeting with my lender and getting my mortgage reduced,” Johnson said. “At first I was struggling to pay $1,400 a month, and now my monthly payments are $920. I would have sought help sooner, but I was ashamed to let anyone know I could not pay my bills. Now I know there is no shame in not being able to pay your mortgage.”
But Marilyn Smith was not so lucky in getting her payments reduced and has been ordered by a Cook County judge to vacate her home, a two-flat building at 6435 S. Langley Ave., in the next 60 days. Wells Fargo bank is her lender.
“I am a widow, and this is my primary residence. Action Now is trying to help me as well as my alderman (Cochran) but so far nothing,” Smith said. “I guess I am one of the unlucky ones. But I am not bitter because I know God will rescue me.”
Wendell Hutson can be reached via e-mail at whutson@chicagodefender.com,
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