Illinois Mortgage Delinquencies May Rise Due to Recession

 Posted on June 30,2020 in Mortgage Foreclosure

Lawmakers in the U.S. recognized from the beginning of the COVID-19 crisis that homeowners would need help with mortgage payments in order to avoid a surge in mortgage foreclosures. The Coronavirus Aid, Relief, and Economic Security Act had several provisions for homeowners, including:

• A moratorium on foreclosure of single-family homes with federally backed mortgages, which the Federal Housing Finance Agency recently extended until at least Aug. 31
• A mandate that forbearance be provided to homeowners, regardless of their delinquency status
• The loosening of restrictions on modifying loans

Illinois has issued executive orders that put a moratorium on evictions, though it also said that homeowners are still responsible for making mortgage payments. Housing market analysts are concerned that the downturn in the economy could lead to the state’s worst mortgage delinquency rate since the Great Recession of a decade ago.

Obstacles Facing Mortgage Payments

More than one million Illinois residents lost their jobs due to businesses being forced to close or reduce staff in response to the coronavirus outbreak. Even with unemployment benefits and stimulus payments from the federal government, many homeowners have tighter budgets with which to make mortgage payments. In some cases, homeowners may be forced to choose between staying current on their mortgage payments and paying for other necessary expenses.

Avoiding delinquency and foreclosure is a priority for many homeowners, but they may be less inclined to do so if their property is underwater. As compared to other states, demand for Illinois homes has not recovered as much from the Great Recession, which decreases property values. When a homeowner owes more on their mortgage than their home is worth, they are more likely to become delinquent on mortgage payments and abandon the property if faced with likely foreclosure.

What Can You Do?

Foreclosure is a final measure for mortgage lenders when continued payment of the mortgage is unlikely. The best way to avoid foreclosure is to communicate with the borrower after their first delinquent payment. Find out the reason for their delinquency and let them know about options that you offer to help clients avoid foreclosure.

Contact an Illinois Debt Collection Attorney

When you are left with no choice but to foreclose on a mortgage, you need the guidance of a Chicago creditor’s rights lawyer. At Dimand Walinski Law Offices, P.C., we help out clients collect on delinquent debts using legal means such as foreclosure. Schedule a consultation by calling 312-704-0771.

Source:

https://www.illinoispolicy.org/covid-19-recession-could-double-illinois-delinquent-mortgage-rate-in-2020/