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Tenants in Foreclosure Training

Tenants in Foreclosure Training. Center for Disability & Elder Law July 15, 2014. Part 1: Eviction. About Eviction Court. 3 0,000 evictions filed each year in Cook County 95% of tenants appear pro se Landlords are three times more likely to obtain an eviction order if a tenant is pro se

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Tenants in Foreclosure Training

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  1. Tenants in Foreclosure Training Center for Disability & Elder Law July 15, 2014

  2. Part 1: Eviction

  3. About Eviction Court • 30,000 evictions filed each year in Cook County • 95% of tenants appear pro se • Landlords are three times more likely to obtain an eviction order if a tenant is pro se • Average pro se tenant’s trial lasts < 2 minutes • Routine denial of tenants’ due process rights • Tenants not allowed to present defenses • Witnesses not sworn in when testifying • Judges not examining eviction notices • Denying or limiting discovery rights From LCBH’s 2003 report No Time for Justice

  4. Landlord-Tenant Laws

  5. Part 2: Policy Concerns

  6. Foreclosure Filing Data 2009-2013 • From 2009-2013, 22,674 apartment buildings have entered foreclosure, impacting 68,300 housing units. • 2013 witnessed a 37% decrease in foreclosure filings from 2012, with a total of 2,758 apartment buildings entering foreclosure, affecting 7,704 units.

  7. Foreclosure Filing Data 2009-2013 • The geography of foreclosure remains unbalanced across Chicago. • The10 community areas with the highest number of units impacted by foreclosure in 2013 are located on either the South or West sides of the city. • These communities have had an average of 21.2% of their rental housing units impacted by foreclosure since 2009. • This is double the average rate of rental unit foreclosures for the City of Chicago.

  8. Foreclosure Sales and Bank Practices • Over the past five years, only 10% of the banks and other financial institutions filing foreclosures were responsible for 90% of all foreclosures on apartment buildings. • 83% of foreclosure sales result in bank-ownership. • Banks choose to vacate properties as quickly as possible. • Constructive eviction • About 1 in 10 eviction cases are foreclosure-related in Chicago

  9. Foreclosure: Impact on Renters LCBH documents common renter problems: LCBH Survey Project: • LCBH conducted a survey as part of the 2012 annual report. • LCBH reached 55 tenants out of 233 contacted. • The majority of renters LCBH contacted in the follow-up survey were forced to leave their homes as a direct result of a foreclosure. • 3 main issues were highlighted in the report

  10. Foreclosure Impacts Children • Research has shown that changing schools is associated with a wide array of problems including: • emotional and behavioral: illicit drug use, depression, and teen pregnancy • academic: dropout, lower math and reading scores

  11. Foreclosure Impacts Families • Displaced families often face housing instability and end up in shelters or doubling-up with family or friends • On average, families spend 7 months in temporary housing • Places burdens on the receiving households as well as municipal services and charity organizations

  12. Foreclosure Impacts Finances • Studies show from 2000 to 2010, the percentage of households allocating more than 30% of their income to rent rose from 11.1 percent to 46.5 percent.

  13. Foreclosure Impacts Finances • Studies show from 2000 to 2010, the percentage of households allocating more than 30% of their income to rent rose from 11.1 percent to 46.5 percent.

  14. Community Impact: Vacant Properties LCBH report released in April of 2013: Vacant Properties: Havens for crime in a city plagued by violence • Increase in vacant properties due to foreclosure • Chicago has experienced an increase in vacant housing units from 7.9% of the total housing stock in 2000 to 12.5% in 2010 • In Chicago, about 70% of vacant properties are the result of foreclosure • In 2011 alone, Chicago had 15,000 properties registered as vacant or “abandoned” according to city data

  15. Community Impact: Vacant Properties Chicago police data shows that crime associated with vacant properties has increased dramatically: • From 2005-2012, reported crimes in abandoned buildings and vacant lots increased by 48%; • Three times as many reported crimes occurred in abandoned buildings in 2012 than in 2005, a 196% increase; • In 2012, a total of 2,618 crimes occurred in abandoned buildings or vacant lots: • 7 reported crimes per day, on average • 3 reported criminal sexual assaults and 4 weapons violations per month, on average.

  16. Citywide Impact • Disinvestment and loss of population on Chicago’s South and West Sides. • Gentrification and increasing rental demand. • Impact on affordability. • According to the U.S. Census Bureau, an 23% of Chicagoans—over half a million people—lived below the federal poverty line in 2010. • According to the National Low Income Housing Coalition, a person employed full-time in Cook County must earn $18.42 an hour to afford a two-bedroom apartment—the current minimum wage is less than half that at $8.25

  17. Part 3: Legal Protections

  18. Foreclosure Timeline

  19. Common Problems

  20. Rights and Responsibilities

  21. Protecting Tenants At Foreclosure • Key Points: • Federal law: Passed in 2009 • 90 day notice for “bona fide” tenants • “Bona fide” lease term survives (including subsidies) • Tenant is not child, parent, or spouse of mortgagor • Arms length transaction • Rent is not substantially less than fair market value • Schedule tosunset at end of 2014

  22. Illinois Mortgage Foreclosure Law • Key Points: • State law: Governs all foreclosures in Illinois • Change in management/ownership notice all tenants • 90 day notice for “bona fide” tenants • “Bona fide” lease (not just the term) survives • Tenant is not child, parent, or spouse of mortgagor • (Unlike PTFA, this is a rebuttable presumption) • Arms length transaction • Rent is not substantially less than fair market value • Lease term restrictions (effective after PTFA sunsets) • Provides for sealing of foreclosure-related eviction records

  23. Keep Chicago RentingOrdinance • Key Points: • City ordinance: Effective September 24, 2013 • Notice to all tenants informing them of their rights • Penalty: actual damages and attorney’s fees • Qualified tenants: Offered either lease renewal OR $10,600 relocation assistance (bank’s choice, not the tenant’s) • Tenant is not child, parent, or spouse of mortgagor • Arms length transaction • Rent is not substantially less than fair market value • Penalty: double relocation assistance and attorney’s fees

  24. Renewal v. Relocation

  25. Summary of Law

  26. Sealing Court Records • Why Seal? • Reported by various credit reporting agencies • Difficulty securing housing in the future • Barrier to some government housing subsidies • How to Seal? • Discretionary (FEDA) 735 ILCS 5/9-121(b) • Mandatory (FEDA and IMFL) 735 ILCS 5/9-121(c) and 735 ILCS 5/15/1701 • Most courtrooms have preprinted sealing orders

  27. Three-Step Property Search

  28. I found the case, now what?

  29. Wrap-Up Contact Us: Lacy Burpee Tenants in Foreclosure Staff Attorney Equal Justice Works Illinois Foreclosure Fellow Phone: (312) 784-3518 E-mail: lburpee@lcbh.org

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