City Initiatives Continue Battle Against Foreclosure Epidemic

Mayor Richard M. Daley today outlined upcoming City outreach and legislative initiatives aimed at providing Chicagoans caught in the mortgage foreclosure epidemic critical assistance that can help them stay in their homes.

"As the economy struggles, we continue to see record numbers of foreclosures in our neighborhoods, as hardworking families struggle to meet mortgage payments that have grown beyond their means," Daley said in a news conference held at Neighborhood Housing Services of Chicago's Back of the Yards Office, 1823 W. 47th St.

"We recognize the magnitude of this problem and its potential to slow down the progress we have made in neighborhoods all across Chicago. Especially in these difficult times, it's the responsibility of government to build effective strategies to reach borrowers and help prevent them from losing their homes," he said.

According to the Woodstock Institute, there were 20,592 foreclosure filings in Chicago during 2008, a 48% increase from 2007

Daley announced that February 15 will be the third annual "HOPI Sunday," an outreach partnership with inter-faith leaders from all across the city and Neighborhood Housing Services of Chicago that informs congregation members caught in the foreclosure crisis where they can go for help.

The Homeownership Preservation Initiative -- HOPI - is a foreclosure prevention partnership started in 2003 by the City, Neighborhood Housing Services of Chicago, 22 lending institutions and the Federal Reserve Bank of Chicago.

Since then, HOPI has prevented more than 2,000 foreclosures, reclaimed nearly 550 vacant buildings and provided counseling to more than 12,000 Chicagoans.

The HOPI Sunday outreach effort involves:

• Distributing information and literature about HOPI and other City initiatives to increase awareness of reputable organizations that people can turn to for help;
• Promoting City of Chicago Borrower Outreach Events; and
• Encouraging their congregations to call 311 for help at the first sign of trouble paying their mortgage.

As part of HOPI Sunday 2009, the City will provide participating faith-based leaders with a new foreclosure prevention toolkit that helps them get the word out to their congregations. Each toolkit will contain a variety of flyers and electronic documents to post or distribute in their places of worship and include in their websites and bulletins.

Some of the items in the toolkits include:

• Foreclosure prevention fliers, encouraging homeowners to call 311, and information about the City's 2009 borrower outreach day events.
• Tips on foreclosure prevention
• Information for renters impacted by building foreclosure
• Tips on avoiding predatory lending practices

Daley also announced that the City will offer six more "Borrower Outreachâ" days in 2009. These events offer homeowners one-on-one loan work-out sessions with counselors and lenders, access to free legal assistance, and information about the City's financial literacy programs. They are held in the neighborhoods hardest hit by the foreclosure crisis.

The first two events will be held Saturday, February 28 at Foreman High School, 3235 N. LeClaire Ave. and Saturday, April 18 at Washington High School, 3535 E. 114th St. Both events are from 9 a.m. to 2 p.m. The schedule for the remaining "Outreach Days" will be announced soon.

The City has held 13 outreach days since 2007, which have provided information and assistance to almost 2,600 homeowners.

"I encourage any Chicago homeowner who is having trouble paying their mortgage to call 311 at the first sign of trouble or to attend one of our "Borrower Outreach" events," Daley said.

"The earlier homeowners can sit down one-on-one with their lender or a housing counselor to start working out a solution, the better their chance of being able to keep their homes," he said.

The Mayor said the City and its partners need more help from both the Federal and State governments to prevent foreclosures and mitigate the impact foreclosures have on local neighborhoods and economies.

He said that at the federal level, he supports:

• Legislation to allow bankruptcy judges to modify mortgage loans. The proposal was introduced by Senator Durbin and is supported by many members of the Illinois Congressional Delegation and the City Council.
• Efforts to encourage lenders to reduce the principal balance on loans as part of their loan modification efforts.
• Using some of the remaining $350 billion in Troubled Asset Relief Program funds for foreclosure relief programs and to make credit available to borrowers.
• Increasing Neighborhood Stabilization Program funding as part of the Economic Stimulus bill and allocating it directly to local governments who will use this funding to acquire and redevelop vacant, foreclosed homes.

At the State level, Daley said he supports:

• Legislation to create an industry-funded Foreclosure Prevention Counseling Fund. The federal and state dollars available now for foreclosure prevention counseling are primarily one-time allocations. The assurance of ongoing support is needed.
• "Legislation that expedites City intervention on distressed condos. Many such buildings were purchased through fraudulent transactions and the City currently does not have the necessary tools to properly deal with them.

The Mayor said that, in addition to the 2009 borrower outreach and HOPI Sunday events, the City will continue its other ongoing foreclosure prevention efforts, such as:

• The HOPI 311 Campaign, which has connected more than 7,500 residents with free credit counselors;
• The Early Warning Program, which gives homeowners facing foreclosure more time to get help;
• Providing financial support for HUD-certified credit counseling agencies
• Outreach to renters impacted by building foreclosure to make sure they understand their rights and where to go for help

"Foreclosures have a devastating impact on homeowners and communities. These properties attract vandalism, arson, and other crime and they discourage people from investing in the neighborhood," Daley said.

"Our foreclosure prevention programs have served as national models, and we must continue to work together to keep the American dream of home ownership alive," he said.