Illinois Has Third Highest Foreclosure Rate in the Country

According to data recently released by the Mortgage Bankers Association, nearly 7.5 percent of Illinois residential properties secured by mortgages were in foreclosure at the end of March - compared to the national average of 4.39 percent for the same category of one- to four-unit properties.

In fact, Illinois had a higher foreclosure rate than almost every state in the union - following only Florida and New Jersey - and twice the rate of California, according to the chief economist at the Mortgage Bankers Association, Jay Brinkmann. Nationally, 52.4 percent of loans in foreclosure are from only five states - Illinois, New Jersey, New York, Florida and California.

Slow Foreclosure Process in Illinois

Unfortunately, the large number of foreclosures in Illinois is bogging down an already swamped court system. Parties are waiting longer than ever for foreclosure resolution, with families facing even greater periods of uncertainty regarding their homes.

The Illinois Supreme Court did establish a committee 13 months ago to study the foreclosure process and the impact certain rules have on the entire process. Earlier this spring, the committee presented their recommendations which mostly consisted of paperwork changes and one change regarding when a foreclosure sale must take place - but it remains to be seen if these proposed changes will have any positive impact.

Options for Illinois Homeowners Facing Foreclosure

Illinois homeowners need to know there are options available for fighting foreclosures, especially since the problem doesn't appear to be going anywhere any time soon. For example, filing for bankruptcy will automatically stop foreclosure proceedings in its tracks and allow the homeowner to challenge their lender in court.

Also during bankruptcy, the homeowner may be able to establish a Chapter 13 payment plan to get current on their mortgage. However, even if the homeowner doesn't prefer the Chapter 13 option - or even if they lose when challenging the bank in court - the additional time afforded the homeowner by filing for bankruptcy may give the homeowner the ability to improve their credit score, possibly making them eligible for FHA financing on a more affordable home in the process.

Many options exist for homeowners facing foreclosure, with just a few mentioned here. An experienced Chicago consumer law lawyer can advise Illinois homeowners on how to best use their time to save their home and/or credit.

Source: Chicago Tribune, "Foreclosures in Illinois bogged down," Mary Ellen Podmolik, May 17, 2012

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