Progress Illinois

For an indication of how wide Cook County's foreclosure crisis has spread, look no further than the circuit court. That's where judges have been buried under a record increase in filings. Unfortunately, the trend hasn't slowed in 2009. During the first three months alone, the Woodstock Institute reports that 10,962 new cases were filed, marking a 41 percent increase over the same period last year.

Despite hiring more judges and clerks, the caseloads haven't gotten any more manageable. In an effort to plow through the backlog -- which stood at 46,854 earlier this year -- Cook County Circuit Court Chancery Division Presiding Judge Dorothy Kirie Kinnaird ordered a two-month reprieve on mortgage default calls, which are the initial court appearances a lender makes after a borrower has been unresponsive to foreclosure action. That moratorium begins today.

Kinnaird's order couldn't have come at a better time. For homeowners who signed onto adjustable-rate mortgages during peak spring months, their payments have recently reset. Coupled with rising unemployment, thousands more people are anticipated to file foreclosure this summer. Cook County Judge Lewis Nixon says he expects his caseload to grow to 300 a day, up from around 70 currently. But, as Action Now points out, that's going to require some persistence on the part of homeowners, who have largely declined to fight back in foreclosure proceedings. Of the 27,653 foreclosure default judgments in 2008, for example, a whopping 25,561 of the borrowers failed appear in court. The SouthtownStar explains:

[F]or many, fears of paperwork, courtrooms and conversations with county employees might make foreclosure seem like the easier option.

"People need to have a little courage about going in and fighting for their homes," said Madeline Talbott, lead organizer for the Chicago-based nonprofit group Action Now.

Considering how little lenders are doing to modify mortgages, it's understandable that homeowners are frustrated by or intimidated about appearing in court. Cook County Circuit Court Chief Judge Timothy Evans has tried to foster a more productive environment by routinely granting mediation requests for both lenders or borrowers  so a deal can be reached where banks get paid and people can stay in their homes.  A key to that mediation process has been making sure that housing counselors, loan servicer's attorneys, and trained mediators from the Center for Conflict Resolution are invited to participate.

For evidence of how successful mediation can be, look to Philadelphia's Mortgage Foreclosure Diversion Pilot Program. Under the court-backed initiative, lenders are required to refer certain struggling homeowners to mediation so the two parties can sit down (with the help of judges, housing advocates, and attorneys) and negotiate a deal to avert foreclosure. Since the program was launched last year, 60 percent of the of 4,690 homeowners involved remain in their homes.

Kinnaird is hoping to take mediation to the next level in Cook County by forming an advisory committee consisting of judges, experts, and lawyers who will determine who should qualify for court-backed mediation and how to bring more struggling homeowners into the process. This is certainly a step in the right direction, but as we've noted before, it's no substitute for a aggressive lawmakers who are willing to stand up to clout-heavy banks.