Illinois dispersed $ 750 million to help those who fell behind on rent during the coronavirus pandemic. Additional assistance underway will bring funding to over $ 1 billion. Much less – so far $ 100 million – has gone to homeowners struggling to meet their bills. And it can take months for homeowners to receive financing.
A moratorium on evictions and other pandemic pillows have helped tenants and landlords keep the roofs above their heads. But the moratorium is no longer in place, meaning legal proceedings that were on hold for much of the pandemic are continuing. In addition, the federal government’s limited protections for homeowners are expected to be lifted in January.
Karla Chrobak, supervising lawyer of CARPLS Legal Aid, a service that provides free legal aid in Cook County, is concerned about an increase in foreclosures.
Chrobak said that before the pandemic there were already signs that something was brewing. The hotline has received more and more calls from people having difficulty paying their mortgages. Then COVID-19 struck.
“We have a lot of people who… got behind in March 2020 and are now facing foreclosure because they have gone all this time without any additional protection except for eviction from their homes,” said Chrobak.
She receives calls from frustrated homeowners, desperate for help.
A struggling client, who contacted CARPLS on Tuesday, relied on her 35-year-old daughter’s income to help pay household bills. The daughter died of COVID-19, leaving the elderly mother and her Social Security checks struggling to cope with the mortgage.
At the start of the pandemic, Illinois helped 10,000 homeowners who fell behind on their mortgages, but that was in 2020.
This year is expected to end with no money for mortgage assistance, even though $ 250 million is allocated to the cause.
Illinois is still waiting for federal government approval before it can be dispersed, and that is taking time.
The Institute of Community Associations is monitoring of States’ participation in the Homeowners Assistance Fund.
Boss of Illinois Housing Development Authority Kristin Faust said the federal government is working hard and it is important that it review plans to ensure the prudent use of taxpayer dollars.
Yet if she had what she wanted, she would already have those dollars flowing.
Instead, she expects a second round of mortgage relief won’t happen until spring.
“We are a judicial foreclosure state in Illinois. Foreclosures don’t happen quickly when it comes to your own home – they are owner-occupied homes. And so we think the timing will work for most homeowners. I’m sure there will be exceptions, but we believe this timing will work, ”said Faust.
Chrobak is less confident.
“The lag time (between now and when Illinois offers more mortgage relief) is definitely important and can lead to that kind of influx of foreclosures that makes me so nervous,” Chrobak said. “Something like an infusion of a few tens of thousands of dollars is something that could save a house. It’s just how quickly is that going to happen before a judge orders the house to be sold? Should we wait for a sheriff to be at the door? By then, it is much too late.
Chrobak and Faust both said it made sense for rental aid to be a priority, given the fewest protections in place for tenants and the long road to foreclosure.
Even as Illinois awaits federal approval for its mortgage assistance plan, Chrobak and Faust say there are ways to avoid losing your home.
First, call the mortgage manager.
“Most people get something in the mail or email about their mortgage payment. The phone number will be right there. Call them and talk to them about the fact that you are having difficulty making this payment and have this conversation, ”Faust said. “A lot of mortgage companies are much more willing to work on payment plans than they were during the last housing crisis.”
They can offer abstentions that minimize and put payments at the bottom of the bill pile.
Option two: call one of the qualified and qualified housing counselors like CARPLS who offer free legal assistance. Faust stressed that owners should trust a list to IllinoisHousingHelp.org, rather than spending money out of pocket.
“I would really encourage people to contact these housing counseling agencies now. Don’t wait until the end. Don’t wait for the foreclosure to be filed. Don’t wait to have a date. The sooner you contact your provider or the housing counseling agency, the more likely you are to have a truly positive resolution, ”she said.
Other programs include the Cook County Housing Legal Aid and Early Debt Settlement Program to help resolve eviction, foreclosure, debt and tax deed issues and the online tool COVID Illinois HELP.
Once a new round of $ 250 million of mortgage assistance becomes available, the IHDA estimates that 12,000 Illinois households will be eligible for assistance of up to $ 30,000 each.
Tenants in difficulty don’t have to wait.
To be eligible, renters must be within 80% of the region’s median income and at least one month behind on rent, starting in June. Priority will be given to people without work for at least 90 days and to those with less than 50% of the median income of a region.
Those who have already received rent assistance may get more funding, although it must cover new arrears rents. Chicago residents can apply for both city and state funding, but cannot receive duplicate grants.
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