Progress Illinois

Deluged by the thousands of foreclosure cases that have clogged the Cook County court system, Chancery Division Presiding Judge Dorothy Kirie Kinnaird made a bold move back in June when she called for a two-month reprieve on mortgage defaults. Despite her effort to buy homeowners time to seek mediation,  resources remain too scarce -- particularly for people from the low-income communities hit hardest by the foreclosure crisis.

With the county pulling in millions in foreclosure filing fees, some local housing advocates are calling on Cook County Board President Todd Stroger to get creative and start redirecting that money toward mediation services. The local community organization Action Now estimates that the spike in $300 foreclosure filing fees has generated an additional $15 million for the county's coffers. Still, the Stroger administration has yet to allocate any of that money toward foreclosure prevention. "Why not use some of that money for mediation?" Marsha Godard of West Lawndale asked at a rally outside Stroger's office this morning. "At least that would give people a fighting chance."

It's no secret that low-income and African American neighborhoods have seen the highest concentration of foreclosures here in Illinois. "We saw someone getting put out on our way down here," activist Michelle Young of Austin reported at the rally. "This is about people losing their homes -- people who are moving out in the middle of the night because they're ashamed to say 'I'm having trouble with my mortgage.'" Watch:

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Over two years removed from the beginning of the subprime mortgage crisis, foreclosure filings continue to stack up. In Illinois alone, 13,000 homeowners received a foreclosure notice last month. Many of the households forced to leave don't even own the homes; the Woodstock Institute believes that 32 percent of 2008 residential foreclosure filings in Chicago were on properties with between two and six units. In other words, renters unfortunate enough to live in a building whose landlord can't make payments must scramble for a new place to live.

But starting today, those very renters will gain some legal protections thanks to the work of housing advocates in Illinois. That's because Public Act 96-0111, otherwise known as the Renter's Bill of Rights, is now in effect. Sponsored by Chicago Democratic State Rep. Will Burns and State Sen. Jaqueline Collins and signed by Gov. Pat Quinn this summer, the law guarantees that, should a new owner step in to run a foreclosed rental building, existing tenants must be informed within 21 days that management of the property has changed hands.Those notices must also include contact information for the new operator of the premises as well as a foreclosure case number, if necessary. And if the tenant is evicted, he or she will have at least 30 days to find a new residence.

The bill that eventually passed both chambers was not flawless. Stripped from it was a clause requiring new habitability standards for any foreclosed property, meaning landlords are not required to maintain an environment that’s “safe, healthful, and fit for occupancy." But it's a step in the right direction, specifically in a state that's trying to solve mounting budgetary and ethics problems.

With an Olympic development bonanza now out of the picture, there's been plenty of speculation over Mayor Daley's next move for boosting the city's sagging economy. Credit remains tight and the housing market is still  deeply distressed. But there are tools sitting in the Daley woodshed that could help ameliorate this problem; As we've pointed out before, the mayor is sitting on a $1.3 billion tax increment financing (TIF) surplus that could go a long way toward rejuvenating crumbling neighborhoods. The question is what will it take to get the mayor to finally dip into his honey pot?

Today, the Sweet Home Chicago Coalition ratcheted up the pressure on the mayor to begin spending in the communities that need it most. "Instead of waiting on the federal government to send us a stimulus package, we need to start our own stimulus," Ald. Walter Burnett (27th Ward) told members of the coalition early this afternoon as they rallied outside of a series of TIF-funded projects that transformed vacant Humboldt Park lots into thriving (and affordable) apartment buildings. Burnett and colleague Ald. Manny Flores (1st Ward) are currently crafting an ordinance that would require the city to commit 20 percent of all TIF revenues toward affordable housing.  Today, proponents of the plan built a symbolic yellow brick road paved with the TIF surpluses. Check out our slide show:

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"Rally Cap" is a new recurring feature at Progress Illinois in which we recap -- with photography or video -- progressive-oriented protests and political rallies held around the state.

The Set-Up:
For almost a year, Erica Bledsoe has been fighting to keep control of a subsidized Rogers Park apartment that belonged to her late mother, Rosetta Bledsoe, the legal guardian to three young grandchildren (ages 14, 11, and 9).  Following Rosetta's death last September, Northpoint, the company that leases the residence, ordered Erica and her three nieces and nephews to vacate the premises (and risk homelessness).  As justification, they cited the fact that her name did not appear on the lease.

After One Story Up blogger Megan Cottrell began reporting on their plight this summer, the Bledsoes witnessed an outpouring of community support, including the formation of a community group that gathered over 600 signatures of support for the family. They also received assistance from attorneys with the Legal Aid Foundation, who have argued that Erica's three nieces and nephews -- whose names do appear on the lease -- have the legal right to stay in the apartment and have Erica's name added to the document.

Today, supporters delivered a stack of signed postcards to HUD headquarters in downtown Chicago and also announced news that the Department of Housing and Urban Development is intervening in hopes of settling the case on the family's behalf in the coming days.  This outcome, while still tentative, is a testament to the real-world influence of good reporting, publicly-subsidized legal aid, and smart organizing.

Quote of the day:
"I never thought so many people cared.  But so many people showed support.  I want to say thank you to the people in my community -- and outside my community. ... We can stick together." - Erica Bledsoe

Multimedia:

Erica Bledsoe discusses her relief that HUD has intervened:

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The Obama administration's Making Home Affordable loan modification program has stumbled out of the gate. Through July, only 160,000 homes went into trial modifications, according to the Government Accountability Office. (The Obama administration pegged the number a bit higher at 235,250, but the number of successful modifications is undoubtedly lower than that.) Meanwhile, foreclosures keep stacking up. In Illinois alone, 13,000 homeowners received a foreclosure notice last month. And the economic devastation is focused in communities least able to recover. A new paper by the Woodstock Institute found that vacant, lender-owned properties "are concentrated in African American communities, go unsold longer, and incur greater losses to the lender." Clearly, more action is required to protect vulnerable homeowners and the communities in which they live.

Enter Sen. Dick Durbin and three of his Senate colleagues. Yesterday, they introduced a bill titled the "Preserving Homes and Communities Act of 2009" that would expand federal loan-modification programs to more borrowers and crack down on lenders eager to foreclose on delinquent homeowners.

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Calling it "a national disgrace" that veterans still constitute such a large share of Illinois' homeless population, Sen. Dick Durbin and members of the state's congressional delegation met with Veterans Affairs Assistant Secretary Tammy Duckworth yesterday to come up with a plan to address this issue. Last year alone, veterans filled an estimated 18,000 shelter beds in the Chicago area. After meeting with Reps. Bill Foster, Debbie Halvorson, Mike Quigley, and Dan Lipinski, Durbin noted that it's going to require some creative thinking to stretch federal resources and begin solving the problem. The AP reports:

"A possibility might be to turn foreclosed homes into opportunities for training and employment for veterans — maybe even ultimately a residence that they can live in," said Sen. Dick Durbin, the delegation's chairman and the Senate's second-highest ranking Democrat.

"Some homeless veterans are struggling with addictive issues and issues of mental illness, and they need counseling, and that has to be part of it."

Encouragingly, the Obama administration increased spending on homeless veterans programs by $3.2 billion this year. A majority of the funding ($2.7 billion) will be used to fill gaps in medical care and counseling services across the nation. The remaining $500 million is earmarked specifically for homelessness initiatives. Because Illinois and the Chicago area in particular have been struggling with an affordable housing crisis for years, the state's share of the funding will only go so far. To mitigate the impact on veterans, Durbin is co-sponsoring the Zero Tolerance for Veterans Homelessness Act (S. 1547), which would extend 30,000 federal housing vouchers to veterans in 2010 and phase in up to 60,000 vouchers by 2013.

Last year, Cook County Sheriff Tom Dart worked hard to defend thousands of unwitting renters who were tossed from their homes because of the foreclosure crisis. Then, Rep. Will Burns (D-Chicago) tried to right the wrong in Springfield by sponsoring a Renter's Bill of Rights. But at the eleventh-hour, lenders managed to strip out even the most basic protections, including habitability standards that would ensure units are “safe, healthful, and fit for occupancy." No organization better understands the stress that renters are facing as a result of too few protections than the Metropolitan Tenants Organization (MTO). And after fielding thousands of calls from Chicagoans living in substandard conditions, the non-profit has drafted a State of Chicago Renters report (PDF) that concludes it's time for the federal government to intervene on behalf of low-income households and help stabilize an increasingly difficult market. More from the report:

For too long, national housing policy has relied on moving Americans toward homeownership. The current housing and financial crisis suggests that during the last decade, growth in homeownership rates and increases in the numbers of owner-occupied units were unsustainable.

Prior to the foreclosure crisis and the economic downturn, thousands of renters were forced to move as rental units were converted to condominiums. Renters have been in an affordable housing crisis for sometime ... They continue to suffer from an acute shortage of affordable rental units.

After listening to 150,000 calls fielded by their own hotline and comparing the data with foreclosure estimates provided by the U.S. Housing and Urban Development and Census data, MTO found that foreclosure-related rental problems are creeping into some unlikely Chicago neighborhoods: those on the city's outskirts that were traditionally occupied by homeowners.

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The latest news about the local housing market is bittersweet. According to a report unveiled Thursday by RealtyTrac, home foreclosure filings in Illinois actually dropped 10 percent from July. But the month's activity was still 22 percent higher compared to August of last year. In all, over 13,000 homeowners received a foreclosure notice last month. And that number could grow unless unemployment dips significantly.  "The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline," the report stated.

Of course, what's lost in these broad statistics is the financial and emotional toll foreclosures take on families and communities. Yesterday, in the first installment of a series titled "Facing The Mortgage Crisis," WTTW's Chicago Tonight told the story of Chicago resident Richard Mitchell who recently received a foreclosure notice after losing his job and falling behind on his ballooning adjustable-rate mortgage payments. Watch it:

The story has a happy ending in this case, as Mitchell was able to get foreclosure counseling services, find work, and secure a 30-year fixed loan on his home. But that's not a common enough outcome. Only about 50,000 mortgages have been successfully modified by lenders under the Obama administration's Making Homes Affordable program, a fact WTTW reporter Eddie Arruza notes in the piece. That lag has led several powerful Democrats to reconsider Sen. Dick Durbin's judicial mortgage modification proposal, which was defeated in the Senate earlier this year.

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We've highlighted proposals, picked through reports, and listened to testimony from advocates concerned that Illinois has an insufficient number of affordable housing units. But nothing illustrates the need better than the scene in south suburban Park Forest yesterday, where hundreds of people lined up outside of the police station just to get their names on a federal housing voucher wait-list that has been closed for a decade. Yesterday morning, FOX Chicago sent a reporter out to the rain-soaked lawn where entire families are camped out. "It's almost like the Grapes of Wrath looking at those people," anchor David Navarro gasped. Watch their report:

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It's becoming quite clear that policy makers can't just will the region's foreclosure problem away. Two articles by the Sun-Times' Francine Knowles paint a pretty grim picture of the local housing market's health. According to a report from First American CoreLogic, 29.4 percent of properties in Illinois had negative equity, meaning a mortgage was greater than the value of the home, giving homeowners a huge incentive to abandon the property. In Chicagoland, the number is over 30 percent. Moreover, 14 percent of home mortgage loans in Illinois were in foreclosure or behind on payments at the end of the second quarter, a five percentage-point jump since last year.

As we've pointed out, it's not that new government regulations have "led to a spike" in foreclosures. It's that elected officials have done too little -- both the state and federal levels -- to step in and protect homeowners. And the most stinging failure has come from Washington where cowardly lawmakers have refused to stand up to financial institutions and pass Sen. Dick Durbin's judicial modification proposal, which is designed specifically to address underwater mortgages.

Most legislative attention nationally is being taken up by health care. In Illinois, the budget deficit has imposed severe limitations on what lawmakers can do. But getting people out from under these onerous debts should be a key priority for officials at both levels moving forward.