July 8, 2009
Two of the Prairie State’s top housing
advocates released some more grim news yesterday on the handling of the
foreclosure crisis in Illinois. After surveying dozens of agencies backed by the
Department of Housing and Urban Development (HUD), the Woodstock Institute and
Housing Action Illinois (HAI) revealed some alarming gaps in foreclosure
aversion services — particularly in McHenry, Will, and Cook counties.
The report (PDF), "On The Foreclosure Front Lines," found that even in
the depths of the housing crisis, only seven counseling sessions were scheduled
for every 100 foreclosure filings in the state last year. Foreclosure counseling
is an extremely effective service; HUD reports that 45 percent of those who
participated in 2008 were able to hang onto their homes. And finding a way to
include more people in the process would certainly help bolster the state’s
housing market, which is suffering from a glut of vacancies.
Woodstock Institute’s Geoff Smith told the Tribune that the underlying problem
is "there are a set of borrowers who can be helped and are falling through the
cracks." Reporter Mary Ellen Podmolik explains:
Even where the most
counseling is occurring, 80 percent of homeowners, on average, face foreclosure
without free counseling offered by agencies approved by the Department of
Housing and Urban Development. […]
Illinois has 94 HUD-certified
agencies that offer counseling. The shortfall, the report concludes, is the
result of a lack of homeowner awareness as well as agencies too strapped to do
HUD Secretary Shaun Donovan is trying to address the latter
problem by lobbying Congress for funding to beef up counseling services over the
next year. As Woodstock and HAI point out, the foreclosure crisis doesn’t appear
to be letting up and the time for additional reinforcement is now:
April 2009, Illinois had the eighth highest rate of foreclosures in the nation
with a foreclosure action on one in every 384 Illinois households. In total,
13,647 Illinois properties had foreclosure actions against them in April, the
country’s fifth highest state total.
Many of those folks may already be
out of a home, but Smith points out that they "could have been reached if
someone had reached them in time, if they’d been represented in an appropriate
For a full briefing on Woodstock and HAI’s recommmendations,
read the full report here.
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