Foreclosures are a quickly growing trend nationwide and here in Rockford. They're also among the biggest factors pulling our economy down. Every time a house goes into foreclosure, it drags the property values for surrounding homes down a percentage point.
A state-sponsored workshop Tuesday night gave local homeowners options for how to keep the roof over their heads.
A slumping national and local economy means it's getting harder to hold onto a job and your home.
In 2007, 18 hundred Rockford homeowners filed for foreclosure. That's a 68 percent increase over 2006. Statewide, there more than 90 thousand foreclosure filings last year, up 25 percent from 2006.
Rockford homeowner Viviane Lopes fell behind in her house payments because of her climbing adjustable mortgage rate.
"It goes up so much and your salary doesn't follow it and when it goes up so much you can't afford to follow it," says Lopes.
Lopes was among dozens of Rockford homeowners at a state-run workshop at La Voz Latina Tuesday night, looking for a way to avoid foreclosing on their homes.
Lenders, credit and mortgage counselors and legal aid experts were on hand to field questions in one on one sessions and group seminars. Experts recommend alternatives like forbearance, that's a temporary moratorium on payments, or workouts and loan modifications.
"Modifying the terms of the loan, freezing an adjustable rate mortgage to the lower rate that they had when they took out the loan," says Bill Smirniotis, of the Illinois Housing Development Authority.
You can also opt for a short sale, selling the house immediately and giving the lender the proceeds. Or giving the lender the deed to the house in lieu of payment. In both options you lose the home, but don't suffer the black mark on your credit a foreclosure would give you.
Lopes says she has some hope after the workshop, but she needs more help.
"Yes we all make mistakes, but there's people that are trying to get out of the situation and most of the banks they don't want to work with you, I mean the mortgage companies, and they have to realize if everybody starts losing their homes, the United States ain't going to be the United States anymore," says Lopes.
The state also set up a 200 million dollar pool, with funds set aside from four Illinois mortgage lenders to refinance sub-prime loans with fixed rate mortgages. Information about that program is online at Illinois.gov.
It's important to remember you have to ask lenders for all these options because they usually won't volunteer them.
Fraud is another big concern. People may tell you they can negotiate for you to keep you in your home, then ask for your personal information and tell you take make payments to them.
If you suspect someone is trying to rip you off, call the Mortgage Information and Fraud Hotline at 800-532-8785.
You can also call 1-888-995-HOPE to talk to get connected to a local foreclosure counseling service and learn more about any of the options listed above.