Lake County Foreclosure Mediation Program

Lake County Foreclosure Mediation Program
Foreclosure Mediation:
Is it for me?
Foreclosure Process
Topics Covered
Foreclosure Mediation

Foreclosure Process

Retention options - keep your home

Disposition options - exit the home

Talking to your lender
Moving Options
Offers a strategic and graceful exit to people who have demonstrated hardship and don't qualify for a loan modification
Staying Options
What is Foreclosure Mediation?
Court program

Solution driven

Assess your goals

Review possible solutions

Help gather information

Open dialogue
How will the program benefit me?
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.
Who will work with me?
Mediators
What now?
Foreclosure Timeline
What to expect?
Don't panic...the process takes time

The average foreclosure takes about 365 days from 1st missed payment
Foreclosure Timeline in a Normal Market: Assumes continually missed payments and no attempt to resolve.
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
The Key Rules
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
Resolution Options
Stay Option. Situation is curable, keep the home.

Move Option. Transition out of the home.
Loan Modification
What does loan modification do?
It changes the terms of the loan in order to:

-Bring loan current
-Sustain affordability for the life of the loan
Loan Modification and Affordability
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)
Reaching a Modification (31% HTI)
Reduce interest rate permanently or temporarily

Extend loan term

Add arrearages and fees to loan balance

Forgive a portion of the principal balance
Forbearance
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
Other Staying Options
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
Your Workout Options
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)
Bankruptcy
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
Eligibility Guidelines to Move
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
Short Sale
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
Deed in Lieu
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
Benefits of Moving Options
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)
Intentional Foreclosure
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
Communicate with your lender
Lake County Foreclosure Mediation Program

Attorney

Handle on your own
Foreclosure Mediation Program
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!
Work with an Attorney
Represent you in mediation and in court

Prairie State Legal Services 847-662-6925

Lake County Bar Association 847-244-3143
Talk to Your Lender on Your Own
The Initial Call
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
The Follow-Up Call
Keep detailed communication log

Save all paperwork

Make copies of documentation submitted

Read all mail and answer all calls

Consistent and determined follow through
Resources
AHC http://www.ahclc.org/saveyourhome.html
For questions about housing counseling please call:
Affordable Housing Corporation of Lake County (AHC) 847-796-8050
For questions about the program please call:
Resolution Systems Institute (RSI) 847-377-3552
Foreclosure Mediation Program
847-377-3552
Affordable Housing corporation of Lake County (AHC)
847-796-8050
Documents Webinar: https://prezi.com/wcomyntviv8x/preparing-a-loan-workout-packet/
Prairie State Legal Services
847-662-6925
Lake County Catholic Charities
847-782-4000
Consumer Credit Counseling Service of Northern Illinois
815-338-5757