Wednesday, October 8, 2014

Regulators, Housing Advocates Blast Mortgage Service Lenders

It is no secret that the “big banks” earned an awful reputation as a result of their questionable mortgage servicing practices when the real estate market crashed, particularly when it came to foreclosures and loan modifications. From backlogged loan modification paperwork to wrongful robo-foreclosures, the introduction of mortgage services companies seemed like a much-needed change. Unfortunately, the delays and mishandling of the past have sprouted once again, according to an article in the New York Times, and homeowners are experiencing difficulties when facing foreclosure or applying for loan modifications. Unfortunately, struggling homeowners in Palatine and other Chicago-area neighborhoods are too familiar with these issues.

Foreclosures in Palatine

Although recent statistics showed initial foreclosure filings during the first two quarters of 2014 to be the lowest since 2007, the time it takes to move the homes through this process is still backlogged, delaying the market’s bounce back. With so many struggling homeowners still facing foreclosure, it’s important to separate fact from fiction to be better equipped if you – or someone you know – is experiencing this.

  • Foreclosure adversely affects your credit – TRUE. Should your home go through the entire process, your credit score may drop as much as 200 to 400 points; additionally, the foreclosure will remain on your credit report for seven (7) years.
  • You have a set number of days to vacate once a foreclosure notice has been issued – FALSE.  Although a foreclosure notice means the judicial process has been initiated, options (such as a short sale or deed in lieu of foreclosure) are available that do not include surrendering the property within a certain period of time.
  • Hiring a foreclosure specialist (or attorney) will guarantee your home will be saved – FALSE. Unfortunately, there is no guarantee against a foreclosure and any third party promising you this – whether or not a fee is being charged for the services – is just being opportunistic.  
  • I won’t owe any money after my property is foreclosed on -  FALSE. Bad news. If your property cannot be sold for the full amount owed when auctioned off, the homeowner will be held personally liable for a “deficiency judgment” (the difference between the foreclosure sale price and the amount owed on the loan).

The foreclosure process is complicated. Only 29 percent of homes in the United States are owned free and clear, according to a real estate housing blog. Fortunately, there are options for homeowners who are facing foreclosure.  

We Are Here to Help

If you or someone you know is facing foreclosure, contact an experienced Chicago foreclosure attorney for advice on the best way in which to proceed. The attorneys at the Law Offices of Gilbert C. Schumm can guide you through each step of the home buying process, and can answer any questions you have regarding real estate. Call (847) 559-9109 today to schedule your initial consultation. Our offices serve clients in the Palatine area.

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