Lake County Homeowners Benefit From Foreclosure Mediation Program

In 2014, Lake County homeowners were subject to over 2,300 foreclosure filings. While the consequences of the mortgage crisis and recession still loom large, a new program is providing homeowners in the area the opportunity to work with lenders to save their homes.

Established in December 2013, the Lake County Residential Real Estate Mortgage Foreclosure Mediation Program served 155 homeowners in its first year. The program, administered by Chicago-based Resolution Systems Institute (“RSI”) through funding from the Office of the Illinois Attorney General, is based in the Waukegan Alternative Dispute Resolution Center, located at 415 W. Washington Street. It was established to assist homeowners struggling to navigate the court system with a fair and efficient process for resolving foreclosure cases outside of the courtroom. Among other goals, the Nineteenth Judicial Circuit Court of Lake County and RSI sought to formalize interactions between homeowners and lenders to improve the likelihood of homeowners getting accurate information about their options and providing lenders with appropriate documentation.

RSI recently completed an evaluation of the Lake County program, along with the five other programs created under the Attorney General’s funding, and found that the mediation programs were meeting this goal. In Lake County, the homeowners work with housing counseling agencies, including Affordable Housing Corporation of Lake County and Consumer Credit Counseling Services of Northern Illinois, to gather and decipher the paperwork required to apply for a modified loan that they can afford. Working with knowledgeable counselors helps to facilitate the exchange of information between the parties. Once the parties have submitted the paperwork, mediation sessions afford homeowners an opportunity to communicate with their lender and the lender’s lawyer to decide what they will do.

In the first year, 39 homeowners were able to keep their homes. An additional seven people worked out agreements to voluntarily relinquish their homes and pursue other options. Homeowners participating in the Lake County mediation program avoided foreclosure at a higher rate (69%) than homeowners in the five other Attorney General-funded programs. Those who completed the program reported overall satisfaction with the process, describing the process as “very open,” and remarked that the process was, “Very helpful and [provided] good information. Took the pain out of dealing with the issue.”

“As a court, we want to be sure that homeowners have a fair opportunity to save their homes,” said Lake County Judge Mitchell Hoffman. “We don’t want to unduly delay the litigation process, but we do want to be sure that homeowners have the chance to fully explore alternatives to foreclosure with their lender.”

As the program moves forward, it will seek to foster greater participation and serve even more homeowners throughout Lake County. The Court has developed changes to the Rules, currently pending final approval, to (among other changes) allow parties more time to complete the various steps of the process and reduce the barriers to entering the program. Judges have also begun referring more homeowners to the program, when appropriate, to allow Lake County homeowners who had been ineligible when their case was first filed or who had missed a deadline to avail themselves of the options and tools the mediation process offers.

Homeowners interested in learning more about or entering the Lake County mediation program should reach out to Program Coordinator Olga Kordonskaya, at (847) 377-3552 or okordonskaya@aboutrsi.org.