More than 600 Chicago homeowners have received personalized counseling and other assistance at the first three of nine "Borrower Outreach Days" organized by the City to help people caught in the home mortgage foreclosure crisis, Mayor Richard M. Daley said today.
"The earlier we can reach homeowners and make them aware of what they're facing, the more options they have in addressing their financial issues and ultimately preventing foreclosure.
"By spreading the word, offering homeowners help and educating homeowners about how to avoid foreclosure, we have a real chance of making a difference," Daley said.
The mayor made his remarks at Tuley Park Fieldhouse, 501 E. 90th Pl., where the fourth "Outreach Day" was to be held later in the day.
He was accompanied by Alphonso Jackson, Secretary of the U.S. Department of Housing and Urban Development, for whom he outlined the numerous initiatives Chicago has undertaken to help homeowners avoid foreclosure and keep Chicago's neighborhoods stable and strong.
"The foreclosure epidemic is having a profound effect on hardworking families throughout our city - but especially in neighborhoods where people are struggling to make ends meet," Daley said. "It's a challenge we anticipated years ago and continue to address today."
According to preliminary figures from the National Training and Information Center, about 14,000 foreclosures started in 2007 in Chicago, up from 10,339 in 2006.
Three "Borrower Outreach Days" - co-sponsored by the City's Department of Housing and the City Treasurer's Office -- have been held since October and six more, including today's, will be held through March 20.
The sessions are for people who might already find themselves in over their heads with their mortgage payments and also for those who want to make sure it doesn't happen to them. They are held in and around communities that have been hardest hit by foreclosures.
They offer loan work-out sessions with counselors and lenders, access to free legal assistance, various workshops, and information about the City's financial literacy programs.
"The earlier we can reach homeowners and make them aware of what they're facing, the more options they have in addressing their financial issues and ultimately preventing foreclosure," Daley said.
But the "Borrower Outreach Days" are just one of the programs the City has established to deal with the foreclosure crisis, the Mayor said.
Since 2003, well before the crisis of the last year, the City and its partners began to combat foreclosures through the Home Ownership Preservation Initiative, or HOPI (HO-PEE). In that time, the program has counseled and educated thousands of Chicagoans, prevented almost 1,600 foreclosures and reclaimed 395 vacant buildings.
Through the initiative, any Chicago resident who is having trouble paying their mortgage can be connected to a financial counselor simply by calling 311, the City's non-emergency number.
"We took almost 6,000 calls from borrowers in 2007. About half those calls came in the last three months of the year, so you can see we have a growing problem on our hands," Daley said. Both HOPI and the 311 program have become models for other cities around the country.
Last year, the City also substantially increased its efforts to inform residents about the availability of its 311 foreclosure assistance campaign with a widespread marketing campaign.
On January 1, the City launched its new "early warning" process to give homeowners more time to get help before a foreclosure action is initiated.
Previously, the City was sending foreclosure prevention information to homeowners several weeks, or even several months after the lender filed a foreclosure action against the homeowner. The foreclosure process in Illinois usually takes about a year.
"We believe it's important to help homeowners earlier in the foreclosure process, so we have begun sending out foreclosure prevention information to homeowners within days of the foreclosure process being initiated in the Circuit Court," Daley said.
"Our hope is that with additional time, homeowners will be able to work out solutions to their problems and keep their homes. By spreading the word, offering homeowners help and educating homeowners about how to avoid foreclosure, we have a real chance of making a difference," he said.
To support its commitment, the city has leveraged private resources to substantially increase the number of credit counselors available to support, educate and assist homeowners. As a result, more homeowners will be able to seek help from trusted, HUD-certified credit counselors in their own neighborhoods.
Daley said the City needs to be able to provide even more counselors and said the participation of the federal government is critical in this effort. The City wants to work with Secretary Jackson and lenders to keep people in their homes, he said.
Daley congratulated the Bush Administration for putting in place a plan to help a small group of homeowners temporarily avoid higher mortgage payments, for his proposal to allow cities and states to issue tax-exempt mortgage bonds to refinance existing loans and for signing into law the Mortgage Forgiveness Debt Relief Act, which gives tax relief to a homeowner who refinances or loses his or her home.
"But, my concern is for the many people who are not covered by either measure.
The foreclosure problem requires everyone's attention: government, not-for-profits and, of course, the lending industry. We must keep families in their homes and work with lenders to create solutions that will protect our neighborhoods.
"We have an obligation to address the changing needs of our people. If we work together with homeowners and lenders and the federal government, we can keep people in their homes and keep our neighborhoods stable and strong," Daley said.
The schedule of upcoming "Borrower Outreach Days:"