The nation is in the grip of one of the worst foreclosure crises ever. The Chicago area is no exception. Mortgage lenders issue foreclosure summonses after a borrower has fallen behind on payments. The intent, of course, is to prompt the homeowner to catch up on payments, or if that is still not possible, then the lender will take ownership of the house and sell it at auction to recover a portion of their loan.
For those who have received a foreclosure summons, there is roughly a six or seven month grace period before a foreclosure sale becomes a reality. Declaring bankruptcy might stop the process and might keep the home from being sold if all the back payments are made via a Chapter 13 reorganization plan. Without a steady source of income that allows a payment plan to combine current payments, back payments and other debts, however, it is doubtful that all the debt will be erased in the allotted 36 to 60 months.
Even those with higher than normal incomes are not above the threat of foreclosure. Former Chicago Bulls and New York Knicks center Eddy Curry, who earned about $70 million in his career, found himself way behind in mortgage payments on his home in Chicago. He ultimately lost the home to foreclosure and it was sold at a sheriff’s sale.
One key question is how it’s possible for someone with that kind of income to fall behind on a mortgage that was only $3.7 million to begin with. As many celebrities find, though, living in excess is easy to do when the excess funds are there. It also explains, however, how easy it is for the rest of America to struggle with their own mortgages, which are so much smaller by comparison, considering that their incomes are also correspondingly smaller.
The bank has every legal right to foreclose on and repossess a home if mortgage payments are in arrears. That being said, however, the loan modification process was enacted to help homeowners who were facing mortgages that were higher than their homes were worth. Homeowners facing foreclosure in Chicago have a right under the law to pursue advice about how the Home Affordable Refinance Program can help them. They may also be able to seek bankruptcy protection to help get a fresh financial start.
Source: www.forbes.com, Mansion Ex-NBA Star Lost to Foreclosure Lists in Chicago, Neal Leitereg, Oct. 25, 2013
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Even Chicago’s ex-NBA stars not exempt from foreclosure woes