Help for homeowners facing foreclosure

June 13, 2012 2:53:30 PM PDT
Illinois homeowners who are facing foreclosure may get a share of the $25 billion settlement reached with some of the nation's biggest banks.

There have been promises of help before and some homeowners are worn down by the foreclosure process. But a recent settlement may offer hope.

Intake specialists are swamped at the Legal Assistance Foundation, which helps homeowners navigate a complex system to try and save their homes.

"We only accept about 10-percent of the foreclosure cases that come to us. Most of that's due to capacity because we don't have enough attorneys to take those cases," Jim Brady, Legal Assistance Foundation, said.

Brady is the supervising attorney. He hopes money from the Attorneys General foreclosure settlement with several big banks will allow the Legal Assistance Foundation to hire more attorneys and help more homeowners.

"Once an attorney is involved, I think it gets the lenders attention and then we're usually able to work some sort of settlement where the homeowner can keep the home," Brady said.

On Wednesday, Illinois Attorney General Lisa Madigan testified before the city's committee on housing and real estate. She was among the attorneys general who negotiated the foreclosure settlement and she is now on the committee monitoring the banks' follow through.

Madigan told aldermen that Illinois will get $1 billion from the settlement to benefit those fighting foreclosure and those who have been foreclosed upon and $20 million of that locally will go toward legal assistance.

"Please don't be ashamed. Please don't be embarrassed, scared, daunted. Don't put your head in the sand. There are programs out there and we want to do everything possible to let you know there are programs out there and get you the help you deserve," Madigan said.

Two bank executives also testified that they have begun offering principal reductions and refinancing to those homeowners who qualify.

Kendall Reed is a housing counselor on city's West Side for Kingdom Community Inc. With the high number of foreclosures in his neighborhood, he's seeing 20 new clients each week. He also said in recent weeks he's seen a shift on the side of the banks, which are now offering to work with the homeowner.

"I was actually shocked. It caught us by surprised a little bit to get the email that came through. And we were like, 'OK is this real?' We have a system we use through vendors, and we did verify these are legitimate offers," Reed said.

While banks are reaching out to customers, homeowners are urged to reach out to your mortgage servicer or the attorney general's office to see if you qualify for a refinance and/or principal reduction.

Meanwhile, some homeowners who have been foreclosed upon are entitled to up to $2,000. Those who believe their foreclosures were mishandled or fraudulent have until July 31st to file a claim with the U.S. Office of the Comptroller.

IL Attorney General Homeowner Help Line: 1-866-544-7151

To report errors, misrepresentations or other deficiencies in your foreclosure process file a claim by JULY 31st with the US Office of the Comptroller: independentforeclosurereview.com

AM I ELIGIBLE for assistance under the Bank Foreclosure Settlement: illinoisattorneygeneral.gov/consumers/settlementpdfs/Homeowner_relief_FAQs.pdf

IL Attorney General information on Bank Foreclosure Settlement:illinoisattorneygeneral.gov/consumers/bankforeclosuresettlement.html


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