Chicago-area religious and community leaders are urging Illinois
Attorney General Lisa Madigan to help provide financial relief for
Illinois homeowners affected by the 2008 housing crisis.
Connie
Gates-Brown, an Illinois resident who was negatively affected by the
financial crisis, said she and her husband both lost their government
jobs after budget cuts and can now barely make the mortgage payments on
their condo.
“Time and time again, when we tried to modify our
loan with Chase bank … After all the money we had given them over the
years, they refused to negotiate with or even hear from us and now time
is running out,” said Gates-Brown, a resident of Chicago’s Rogers Park
neighborhood.
Gates-Brown spoke on Friday to a group of about 100 people, including students and members of community groups like Southsiders Organized for Unity and Liberation, Northside P.O.W.E.R., the Northwest Indiana Federation and IIRON,
who assembled at North Park University’s Anderson Chapel for a rally
where shouts of “Amen” easily found their place next to chants of “We
are the 99 percent.”
The group of community activists said in a
press release that they want Madigan to “pursue mortgage principle reduction,
and to call for a moratorium on all foreclosures, particularly those
instigated by Fannie Mae and Freddie Mac.”
“We ask Illinois Attorney General Lisa Madigan to use her position as a leader of the new national Mortgage-Backed Securities Working Group
to stand with her constituents and stand up to financial institutions
and to be a champion and save our homes,” said Marilyn Pagan-Banks, a
leader with Northside P.O.W.E.R.
Here's more from the meeting and rally:
Working alongside U.S. Attorney General Eric Holder and about 50 additional attorneys and analysts, Madigan joined the Working Group, which was created in January, to help investigate the cause of the recent financial crisis.
President Barack Obama told the Los Angeles Times in January that the Working Group would “hold accountable those who broke the law” and “speed assistance to homeowners.”
In
what’s being viewed as a positive step forward by the group of
community leaders who gathered Friday, Madigan has begun pressuring Edward J. DeMarco,
director of the Federal Housing Finance Agency, which oversees Fannie
and Freddie, to consider debt forgiveness.
On Friday, Madigan joined about 100 Democratic legislators who sent letters
to DeMarco in which she said “Principal reductions for borrowers can
prevent the likelihood of defaulting and in turn, prevent unnecessary
foreclosures. This is a critical step to repair the widespread
destruction caused by the housing market's crash that has reverberated
in communities across Illinois."
Meanwhile, DeMarco told NPR
in a prepared statement that the FHA has no plans to consider principal
reductions, in which the government would subsidize some of the cost of
an underwater mortgage.
While not as drastic as California,
which claimed the top spot with 155,000 foreclosures, last year Illinois
foreclosed on about 21,000 homes. The Prairie State also has the
third-highest foreclosure rate in the country, according to CoreLogic, a financial and property information service provider.
Madigan is expected to meet with the group of community leaders in April, but no specific date has been set.
Right now, the mortgage rates are so low that you might be able to refinance with a 15-year fixed-rate loan, thus escaping the debt trap faster than you might have originally planned, while also cutting your monthly loan payment. The icing on the cake is the outrageous amount of interest you will avoid paying. I have used only "Official Refinance" to find rates
"Principal Reduction"?
It's unfortunate when you lose your job and still have to make house payments, but I don't think anyone is entitled to have the principal reduced on money they borrowed and promised to repay.
If your bank when re-do the loan, then go to another bank that will. Or just sell the house, take your loss, and move on.
I don't think the taxpayers should need to pay for this.
Bob Kastigar
IBEW Local 1220, Chicago
@Bob K
Nobody is asking taxpayers to pay for principal reduction. It's the banks and Wall Street --you know, the ones who wrecked our economy and made your home worth about half as much as it was before-- who should pay for the damage they've done.
As a union guy, you should know better than to side with the 1%.
Beyond market fluctuation, there are numerous variables that can mess with the interest rate on a mortgage refinance. Here are the important ones, and knowing which side of the fence to be on with each will save you green. Resource for this article: Factors that influence a refinanced mortgage rate
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