The Foreclosure Crisis

The national housing crisis that began two years ago and culminated in 2008 has hit Chicago hard. According to numbers provided by the Circuit Court of Cook County, 40,438 homes in Cook County were foreclosed between the beginning of 2008 and June of 2009.13 From 2006-2007, foreclosure filings in Chicago increased by 32 percent, and from 2005 to 2007, they increased by 80 percent. At the same time, foreclosures that went to auction increased even more dramatically, indicating that homeowner lost all control of the property.14

Nearly 92 percent of foreclosures occurred because homeowners who were summoned to court to argue the judgments did not show up, and hence the verdict was automatically rendered in favor of the lender.15 A standard eviction notice in Cook County grants 30 days from the time that the bank secures a sale of the foreclosed house before an individual is vacated. By appearing in court, a judge can extend it to 60 to 90 days or can grant a person's motion to contest the eviction. However, lack of appearance at court enables the bank to move forward with the proceeding without any resistance.16

In response to a concerted community organizing effort, Action Now, a group of community activists campaigning for foreclosure mediation, was able to get the Cook County Circuit Court Chancery Division to pass a court order that will assist homeowners dealing with foreclosure proceedings by:17

-Putting a stop to foreclosure sales until the end of August, 2009. Instead of moving forward with the standard procedures regarding foreclosures, the Chancery Court will implement a "case management call" of all pending foreclosure cases and will not follow through on any default foreclosures decided on since April 1, 2009. -Establishing a mechanism for individuals to engage a mediator in foreclosure proceedings. Based on a mandatory mediation model developed in Philadelphia, a hotline will be implemented so that individuals can call for advice in navigating the foreclosure proceedings.

As a part of the case management call, individuals will receive a summons letting them know that their case will be reviewed. Once they receive the summons, they can go to the Help Desk at the Daley Center and get information regarding when and where they should meet. Homeowners can either bring their own lawyers or can arrange to have a counselor provided for them by the Department of Housing and Urban Development. The court will require the bank to provide a lawyer to fill out a form with the information on the case and categorize it accordingly; a mediator appointed by the Center for Conflict Resolution will be on-hand to assist with the process. During this time, no sales on foreclosed homes will be approved unless both parties agree.18

Lists of cases scheduled for review in July and August 2009 were to be made available to the public through the Cook County Circuit Court Clerk by the beginning of July; however, the lists have not yet been made available. According to Listman, Judge Lewis Nixon, supervising judge of the Court's Chancery Division, announced that the court clerk should be sending out postcards to individuals whose case management calls are scheduled for the next few months, but Listman says that so far he has yet to encounter anyone who has actually received a postcard. Court dates scheduled for September-after the case management calls are over-are listed on the county clerk's website, but no information about the case management calls is readily available to the public.19

Meanwhile, the lawyers for the banks are engaged in the process of categorizing the properties that are pending during the case management proceedings. However, unless homeowners are notified of the situation, the banks are the only ones engaged, in effect giving them full reign to set the terms of the case while also giving a two-month period for unilateral categorization of all properties currently enlisted. In other words, the bank categorizes the properties to its own exclusive benefit.20

In early 2009, Cook County Sheriff Tom Dart's office put a moratorium on evictions, but a court order compelled the Sheriff's office to re-engage in the process.21 Currently, the Sheriff's office posts notifications for pending evictions three times before commencing with the eviction process, which gives individuals who are renting in an apartment building that is being foreclosed due to the owner's inability to pay approximately three weeks to find new accommodations.22

On November 20, 2009, Action Now and its coalition celebrated victory when the Cook County Board passed a $3 million budget amendment to fund its proposed outreach and court mediation program.23 With any luck, Chicago houses will stay with Chicago home-owners.

13 Cook County Foreclosure Date, 2008-2009. Data provided to Action Now by cook County Circuit Court Clerk's Office.

14 "Foreclosure Fallout: An Analysis of Foreclosure Auctions in the Chicago Region," Woodstock Institute, Aug 2008

15 Cook County Foreclosure Date, 2008-2009. Data provided to Action Now by cook County Circuit Court Clerk's Office.

16 "Illinois Foreclosure Laws," RealtyTrac

17 Aileen Kelleher, "Action Now Victory!" ActionNow, 20 Nov 2009

18 Ibid.

19 Mikva, Judge Abner, "Thomas Dart: The 2009 Time 100," Time Magazine.

20 Ibid.

21 Mikva, Judge Abner, "Thomas Dart: The 2009 Time 100," Time Magazine.

22 Interview with Sean Heffernan, spokesman for the Cook County Sheriff's Department, 20 July 2009.

23 Aileen Kelleher, "Action Now Victory!" ActionNow, 20 Nov 2009