Lake County Foreclosure Mediation Program

Foreclosure Mediation:

Is it for me?

Lake County Foreclosure Mediation Program

Foreclosure Timeline

Staying Options

What now?

Foreclosure Timeline in a Normal Market: Assumes continually missed payments and no attempt to resolve.

Foreclosure Process

Jan 1: 1st missed mortgage payment

Feb 1: 2nd missed payment - lender sends default notice

Mar 1: 3rd missed payment - lender sends default notice

May 15: Homeowner served with summons/complaint

June 15: Homeowner's Answer to complaint is due

Jul 15: Judge enters Order of Default against homeowner

Dec 15: Judicial sale of home

Jan 1: Judge confirms sale and orders possession

Feb 1: Homeowner is evicted

Bankruptcy

Loan Modification

What to expect?

Loan Modification and Affordability

Don't panic...the process takes time

The average foreclosure takes about 365 days from 1st missed payment

31% housing to income ratio

Compares mortgage payment to gross income

Mortgage payment = PITI(A)

Principal, Interest, Taxes, Insurance, Assessments

Gross income (before taxes, deductions taken out)

Resources

Consider if:

Turned down for a loan workout

Default is due to debt not hardship

Can usually remain in the house

May qualify for a loan mod after bankruptcy is discharged

Obtain legal counsel proficient in both foreclosure and bankruptcy

Work with an Attorney

Reaching a Modification (31% HTI)

Communicate with your lender

What does loan modification do?

Foreclosure Mediation Program

847-377-3552

Reduce interest rate permanently or temporarily

Extend loan term

Add arrearages and fees to loan balance

Forgive a portion of the principal balance

It changes the terms of the loan in order to:

-Bring loan current

-Sustain affordability for the life of the loan

847-796-8050

Affordable Housing corporation of Lake County (AHC)

The Key Rules

Lake County Catholic Charities

847-782-4000

Your Workout Options

Forbearance

815-338-5757

Represent you in mediation and in court

Prairie State Legal Services 847-662-6925

Lake County Bar Association 847-244-3143

Consumer Credit Counseling Service of Northern Illinois

Lake County Foreclosure Mediation Program

Attorney

Handle on your own

Prairie State Legal Services

847-662-6925

Documents Webinar: https://prezi.com/wcomyntviv8x/preparing-a-loan-workout-packet/

Don't put your head in the sand

Open all your mail

Don't move out (until a judge tells you to or you reach an agreement)

Pay your HOA and taxes

Be honest and accurate with your lender

Your loan type

Your lender, servicer and investor

Property value

Your financial circumstances

Reason for default (hardship vs. debt)

When purchased (more options if after January 1, 2009)

Suspend partial/full payment

Must demonstrate hardship is short-term or ending

Immediate relief

Often provided with little paperwork

Always ask your lender if it is an option

AHC http://www.ahclc.org/saveyourhome.html

Foreclosure Mediation Program

Talk to Your Lender on Your Own

Other Staying Options

Resolution Options

The Follow-Up Call

The Initial Call

Application packet and financial documentation

Counseling and intervention with your lender

Prepare a loan workout packet

Mediation

Call before your deadline expires 847-377-3552!

Refinance: Lowers interest rate for homeowners who missed 0-1 payments in the last 12 months

Repayment Plan: Adds arrearages to monthly payment

Reverse Mortgage: For homeowners age 62+ with a lot of equity

Keep detailed communication log

Save all paperwork

Make copies of documentation submitted

Read all mail and answer all calls

Consistent and determined follow through

Explain your situation concisely

Clarify documents required and the submission process

Identify a single point of contact

Request a forbearance

Ask for time-frame for decision making

Stay Option. Situation is curable, keep the home.

Move Option. Transition out of the home.

Moving Options

Topics Covered

Offers a strategic and graceful exit to people who have demonstrated hardship and don't qualify for a loan modification

Intentional Foreclosure

Eligibility Guidelines to Move

Can be an intentional choice to create breathing room, save and prepare for the future

Commit to basic property maintenance prior to eviction

Possible ramifications:

Owe taxes

Damage credit profile

Property deterioration, impact on neighborhood

Guidelines vary by investor but typically include:

Ineligible for loan workout

Unable to sell home after listing for 90 days

Experienced a long-term hardship

Owe more than the home is worth

Behind on mortgage payments

Can no longer afford home and are ready to leave

Foreclosure Mediation

Foreclosure Process

Retention options - keep your home

Disposition options - exit the home

Talking to your lender

What is Foreclosure Mediation?

Who will work with me?

How will the program benefit me?

For questions about housing counseling please call:

Affordable Housing Corporation of Lake County (AHC) 847-796-8050

Short Sale

Deed in Lieu

Benefits of Moving Options

For questions about the program please call:

Resolution Systems Institute (RSI) 847-377-3552

Court program

Solution driven

Assess your goals

Review possible solutions

Help gather information

Open dialogue

We will work with you to avoid the need for multiple document submissions.

Legal Stay: the court proceedings stop while you are in the program.

Mediation: the lender and their attorney are required by the court to participate.

Relocation cash incentives possible

Subordinate debt is often relieved

Forgiveness on tax ramifications may occur

Less damage to your credit than a foreclosure

May purchase a home in 2-3 years (versus 4-7 after a foreclosure or bankruptcy)

Lender repossesses property and homeowner is relieved of debt

Must leave property in good condition

More viable if no subordinate lien holders

More lenient guidelines than short sales

Lender accepts less than loan balance due and incurs cost of the sale

Depends on a market analysis

Lengthy process with lots of red tape

Need to negotiate with all lien holders

Use a realtor experienced in short sales in your neighborhood

Affordable Housing Corporation of Lake County (AHC) 847-796-8050

Mediators