Over the course of our 70-year history, one of the CBF’s hallmarks has become community leadership in times of crisis and emerging issues for access to justice. The great recession of 2008, and the swelling numbers of homeowners facing foreclosure in the associated housing crisis, was a particularly important example.
Growing numbers of foreclosures had already begun to spike by late 2006 before the Great Recession hit with its full force and proved to be the proverbial canary in the coal mine. By 2007, the CBF already was working closely with the Circuit Court and several of our pro bono and legal aid partners on expanding the availability of services to assist homeowners facing foreclosure.
The CBF was able to expand its support for these efforts over the next several years thanks to generous annual gifts by Denis Pierce, Attorneys Title Guaranty Fund, and the Law Bulletin Publishing Company (see photo). From their differing professional vantage points, each of these generous donors saw the dangerous impact the surge in foreclosures was having on unrepresented homeowners and on the courts.
As the number of foreclosures continued to spike more than doubling in just two years by 2008, and peaking at more than 50,000 new filings in 2010 it was clear that a more comprehensive response involving the court, the bar, pro bono and legal aid organizations, and other community partners would be necessary to meet the scale of the crisis.
The CBF worked with the Circuit Court and a number of partner organizations to develop an innovative program to tackle the problem, building off the successful programs the CBF, the Court and our pro bono and legal aid partners already had in place. With significant funding and support from the Cook County Board, the Circuit Court of Cook County Mortgage Foreclosure Mediation Program was launched in the Spring of 2010 to help homeowners resolve their foreclosure cases in the most fair and effective manner possible. For more than seven years, the program was a great example of a successful public/private partnership and played a critical role in stabilizing communities throughout Cook County.
Funding for the Circuit Court of Cook County is one of the County’s core responsibilities, and the County’s support for this program made it possible for tens of thousands of homeowners facing foreclosure to receive free housing counseling, brief legal advice and assistance, and community education. Many more homeowners were able to reach negotiated solutions with their lenders with the help of the case managers and housing counseling services that were part of the program.
For the smaller number of cases where homeowners had a potential legal defense or a more complex issue that needed to be resolved to reach agreement with the lender on an alternative to foreclosure, homeowners also had access to pro bono legal representation and free mediation.
The program also included another component that played an integral role. Community-based organizations working in harder-hit parts of the County were key partners in the program and received funding to do outreach to homeowners who had received foreclosure papers. Before the program started, awareness and trust in the foreclosure process and the court was quite low. That was reflected in the fact that 90% of homeowners served with foreclosure papers simply defaulted without ever appearing in court.
Thanks primarily to the community-based organization partners, who helped to connect homeowners with the array of free resources available and to build trust that the Court was committed to ensuring fair outcomes, those numbers were turned completely on their head. Not long after the program was up and running, 90% of homeowners in foreclosure were appearing in court and participating in the process.
Over the years after the launch, the program gradually contracted to about half its peak size as foreclosure volumes returned to pre-crisis levels, yet continued to help thousands of homeowners facing foreclosure each year and played a crucial role in keeping our communities safe and stable. More than 7,200 people were able to save their homes through the program, and even more people were able to negotiate alternatives to foreclosure that resulted in stable transitions for both the homeowners and their neighborhoods.
The experience with this program leaves us with a number of lessons that should serve as models for a new, longer-term foreclosure mediation program as well other court-based programs in the future.