On top of the wave of troubled mortgage-lending practices that is plaguing Evanston and the country comes another wave of scams – illegal and unethical companies and persons promising help with loan restructuring.
There was a total of 446 foreclosures filed on properties in Evanston in 2007-08, according to data prepared by the Woodstock Institute. In the same period, 164 Evanston properties have been sold at auction, according to the institute.
While some agencies – such as CEDA/Neighbors at Work and Interfaith Housing of the Northern Suburbs – are certified by the Department of Housing and Urban Development (HUD), certain for-profit companies and those that charge up-front fees may not be on the up-and-up.
Fraudulent practices including promises to save a house already in foreclosure, to obtain a reduction in the mortgage-loan balance and to keep the homeowners out of court and in their homes – all for an up-front fee, said State Attorney General Lisa Madigan. Such practices are illegal, Ms. Madigan said in a telephone press conference last week in which the RoundTable participated.
“If you’re struggling to pay your mortgage, you need to stay away from anyone who says they’re going to save your home for upfront money,” the Attorney General said.
“In the State of Illinois it is illegal for someone to charge money up-front” for help with loan restructuring or foreclosure prevention, she added.
Ms. Madigan said these fraudulent practices are occurring statewide and that her office has sued 24 companies for fraudulent dealings in connection with foreclosure prevention and mortgage restructuring.
Representatives of these companies aggressively contact persons whose homes are in foreclosure, she said. They obtain information from the court once a foreclosure as been filed, then send letters, call on the telephone and sometimes even appear in person at the home, promising help for money up-front.
In some cases, companies will hire local residents or church members to solicit customers, banking on the representative’s status to ensure trust – a practice Ms. Madigan says is known as “affinity fraud.”
Signs on light-posts and parkways offering easy money for a home can also be indicators of fraudulent companies, the Attorney General said.
Donna Spicuzza of the City’s Planning Department said the City has received a few calls about loan-restructuring fraud. Both the City and the State’s Attorney’s office urge anyone struggling to make mortgage payments either to contact the lender directly or to speak with a HUD-certified counselor. In addition, the City of Evanston’s website, cityofevanston.org, is updated frequently with information for persons in foreclosure and those seeking to avoid foreclosure, she said.
Although nearly every neighborhood has experienced a number of foreclosures, the majority are concentrated in a few wards, says City Planner Donna Spicuzza. In response, the City is taking a multi-dimensional approach to curtail a rise in foreclosures and to minimize the impact on a neighborhood of vacant and foreclosed-upon properties.
Information on the City’s website, www.cityofevanston.org includes general information on the foreclosure process, resources for free foreclosure counseling and updates on federal programs aimed at reducing foreclosures.
Not only does the City urge owners to take proactive steps to address the problem, but also to be wary of ads and solicitations offering help for a fee. Free resources, links to other websites and an alert from the U.S. Housing and Urban Development department about mortgage rescue scams are among the current web page listings.
The City also wants to make homeowners aware of a recent federal initiative, Making Home Affordable, announced in early March. The program encourages lenders to modify existing mortgages for owners who cannot afford the mortgage payments and provides modification guidelines. It also expands mortgage refinancing options for owners in good standing who have lost equity in their property but want to refinance to get a lower rate.
The City has heightened its property- standards enforcement of vacant buildings and will apply for federal funds through the Neighborhood Stabilization Program to turn around vacant or foreclosed properties, Ms. Spicuzza said.
Help With ForeclosureHomeowners or renters who have any questions or concerns about foreclosures can contact the City of Evanston to speak with Ms. Spicuzza, at 847-866-2928, ext. 2264, or Evonda Thomas,Director of Health & Human Services, at 847-866-2969.
Other sources of help for those struggling with foreclosure are the following:
CEDA/Neighbors at Work: 1229 Emerson St., 60201, telephone 847-328-5166.
Interfaith Housing of the Northern Suburbs: 620 Lincoln St., Winnetka 60093, 847-501-5678.
Attorney General’s Homeowner Helpline: 1-866-544-7151