Mayor Richard M. Daley today said the City, in partnership with the MacArthur Foundation and Neighborhood Housing Services of Chicago, will sponsor a May 2nd “Fix Your Mortgage” event at the Chicago Police and Firefighter Training Academy, 1300 W. Jackson Blvd. The event is designed to help Chicagoans figure out if they are eligible for help under the federal government’s recently-announced foreclosure assistance plan and ensure they get into affordable, sustainable, fixed-rate mortgages.
“The foreclosure problem continues to require everyone’s attention: government, not-for-profits, the lending industry, and philanthropic partners. We recognize the magnitude of this problem and its potential to slow down the progress we have made in neighborhoods all across Chicago,” Daley said in a news conference held at Daley College, 7500 S. Pulaski Road.
“We must work continue to work together to keep families in their homes and create solutions that will protect our neighborhoods. That’s why we are pleased to announce this initiative today,” he said.
The mayor also announced a schedule for five more in the ongoing series of City-sponsored foreclosure “Borrower Outreach Days” to be held between April and December. The City has sponsored 14 of these events since 2007 and provided help to more than 3,200 homeowners.
The Obama Homeowner Affordability and Stability Plan -- known as “Making Home Affordable” -- was announced earlier this month. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program is required to participate.
The program has two primary parts: a $75 billion Loan Modification Program that is expected to help four million homeowners currently in or at-risk of foreclosure modify their loans; and $200 billion for refinancing, allowing homeowners who were previously unable to refinance their mortgage because the value of their home has dropped to do so.
The programs are open only to borrowers who live in their homes, and not to investors or people with mortgages on second or third homes. It is open to homeowners who obtained a mortgage before Jan. 1, 2009.
The May 2 “Fix Your Mortgage” event will focus only on the part of the Obama plan that deals with modifying loan agreements.
"We estimate that approximately 8,000 Chicago homeowners who are in foreclosure will be eligible for the federal program, and we want to make sure as many as possible take advantage of it," Daley said.
Daley stressed that the federal assistance under “Making Home Affordable” funds do not flow through City or State government. If a homeowner is eligible for federal support, he or she must deal directly with the lender.
“What we and our partners are trying to do with our initiative is to make it as simple as possible for Chicagoans who qualify to take part in the ’Making Home Affordable’ plan,” he said.
Prior to the May 2 event, in partnership with the faith-based community, aldermanic offices and local organizations, the city will get the word out about the event, including a checklist of documents that homeowners should bring with them.
Then at the event, HUD-certified counselors and pro-bono real estate attorneys will review the paperwork and complete a list to determine if the borrower qualifies for assistance under the Obama plan. If so, they will send the information directly to the loan servicer from the event.
There were 20,592 foreclosure filings in Chicago during 2008, a 48 percent increase from 2007. There were almost 10,000 completed foreclosures in Chicago in 2008, almost all of which went back to the lender after the foreclosure auction.
These properties often end up vacant for extended periods and can have a devastating impact on our neighborhoods, the mayor said.
“Here in Chicago we anticipated the foreclosure problem years ago and began to address it. Our foreclosure prevention programs have served as national models, but no one could have predicted how severe this problem would become,” Daley said.
The Mayor summarized the City’s longstanding range of foreclosure prevention efforts, including:
• The Homeownership Preservation Initiative (HOPI), which since 2003 has prevented more than 2,000 foreclosures, reclaimed nearly 550 vacant, troubled buildings and counseled more than 12,000 Chicagoans. Last year alone, the HOPI 311 Campaign connected more than 7,500 residents with free credit counselors. More than 1,260 residents have already called 311 in 2009.
• Nearly 100 faith-based leaders partnered with the City on HOPI Sunday (2/15/09) to publicize foreclosure prevention resources.
• The City successfully pushed for State legislation to assist renters impacted by building foreclosure and have done targeted outreach to assist such renters...
• The Early Warning Program, which started in 2007 and gives homeowners facing foreclosure more time to get help, work out solutions and keep their homes.
• The City’s support of HUD-certified credit counseling agencies.
• The Borrower Outreach events in Chicago neighborhoods hit hardest by foreclosure.
• The City’s Neighborhood Stabilization Program strategy to acquire and redevelop vacant, foreclosed homes using $55.2 million in HUD funding.
• And the City intent, announced two weeks ago, to use $6 million from the federal economic stimulus program for foreclosure prevention activities.
Daley said the City will continue working hard to pass legislation at both the federal and state level to prevent foreclosures and lessen the impact foreclosures have on local neighborhoods and economies.
This includes, at the Federal level, support for legislation to allow bankruptcy judges to modify mortgage loans.
And at the state level, continue to support for legislation to create a Foreclosure Prevention Fund and legislation that expedites City intervention on distressed condos so a building can be put back to productive use.
Daley said he also supports legislation brought to Springfield by the Metropolitan Mayors Caucus that enhances a city’s ability to address the foreclosure crisis by providing direct notification of foreclosures to municipalities. The legislation also requires any entity that holds a mortgage – including a bank or trustee – to maintain its vacant properties.
He thanked the MacArthur Foundation, Neighborhood Housing Services of Chicago and the other partners who are helping to make the May 2 outreach day possible.
“They recognize the impact foreclosures can have on our neighborhoods. Their willingness to commit resources to this struggle will help keep alive the dream of home ownership for thousands of Chicagoans,” he said.
Daley reminded homeowners to beware of foreclosure rescue scams, such as any person or organization that asks for a fee in exchange for counseling services or a modification.
The schedule announced for the regular “Borrower Outreach Days” through the December is:
April 18, 2009, 9:00 a.m. – 2:00 p.m.
George Washington High School
3535 E. 114th St.
June 26, 2009, 9:00 a.m. – 2:00 p.m.
1145 W. Wilson Avenue
August 5, 2009, 9:00 a.m. – 2:00 p.m.
South Shore Cultural Center
7059 S. Shore Drive
October 9, 2009, 9:00 a.m. – 2:00 p.m.
7500 S. Pulaski Road
December 5, 2009, 9:00 a.m. – 2:00 p.m.
1312 S. Racine