Although she is an attorney with decades of experience, Mary Flynn joined the ranks of the unemployed after the social services agency she worked for cut jobs this year. Unable to keep up with mortgage payments for her Berwyn home, Flynn wasted no time enrolling in the federal Hardest Hit Fund program.
Flynn now has a temporary job in her field, which she hopes to parlay into a permanent one.
"Hardest Hit was the bridge that helped me keep my home," she said.
Hardest Hit is one of several federal funds designed to help unemployed and underemployed borrowers keep up with mortgage payments. It is the biggie, with $57 million dispersed to homeowners in Illinois alone since it was launched in 2011. The government offers other programs under the Making Home Affordable umbrella. They include mortgage modification, principal reduction and refinancing programs, as well as resources geared toward veterans.
Illinois ranks third nationally in delinquent home loans, behind Florida and New Jersey, according to the Mortgage Bankers Association.
Borrowers facing foreclosure can pursue other remedies.
The federal independent foreclosure review program provides a third-party review and, in some cases, offers compensation. Residents of Cook, Madison, Peoria and Will counties can take advantage of county mediation programs to try to resolve foreclosure claims.
Minority homeowners who were given mortgages under unfair terms can tap into restitution programs such as the Wells Fargo Fair Lending and Civil Rights Violations Settlement and the Countrywide Mortgage Fair Lending and Civil Rights Violations Settlement.
At the state level, the Illinois Foreclosure Prevention Network coordinates federal programs with local agencies, hosts foreclosure prevention workshops for homeowners and has free counseling services that homeowners can reach through a hotline, 855-KEEP-411, and website, keepyourhomeillinois.org.
On its website, illinoisattorneygeneral.gov, the Illinois attorney general's office offers mortgage-related resources for distressed homeowners.
Because of the Illinois Homeowner Protection Act, borrowers at risk of default have a 90-day grace period before lenders can initiate foreclosures. This law expires July 1.
Typical of many federal grant programs, Hardest Hit money is dispersed locally after recipients meet with counselors approved by the U.S. Department of Housing and Urban Development. Flynn's counselor, for example, was with the Neighborhood Housing Services of Chicago Inc.'s Chicago office, which also has an Elgin office.
In addition to advising homeowners about keeping up with their mortgages, HUD counselors teach basic money management.
"More and more, that includes credit counseling," said Ruth Contreras-Di Diana, director of counseling for the Greater Southwest Development Corp. in Chicago. "The banks tell us that homeowners are having trouble overcoming their credit card debt, especially."
She said her crew "triages" clients so they can help those with the most dire situations first. After the counselors help clients secure new mortgage terms, the counselors talk to them about financial goals.
Contreras-Di Diana said she tells clients: "You may be back on your feet for now, but what about after that? Where will you be financially in a year and how are you planning for that?"
Pablo Arontes, of Niles, praises the counselors at the Spanish Coalition for Housing in Chicago for their advice, which included renting out a room in his house and increasing his work hours. Both recommendations help him pay his mortgage, which was modified.