By: R. Dennis Smith
Project Manager, Fair Lending and Home Preservation Law Project
The John Marshall Law School
My legal career began at the tender age of 63. After retiring from two previous careers, one of which was 25 years of military service, I had decided to try something a little different for my senior years. My introduction to the Fair Housing Act came a year after receiving my law license by way of a Department of Housing and Urban Development (HUD) grant funding project at the John Marshall Law School to combat the effects of predatory mortgage lending. The role I had was to place law student interns with housing counseling agencies throughout Chicago and to supervise other students involved in the Cook County Circuit Court’s Mortgage Foreclosure Mediation Program. My initial courtroom experience was on the 28th floor of the Daley Center: Foreclosure Court.
Fast forward to 2011 where the national housing foreclosure crisis was nearing its zenith. The ten Circuit Court judges assigned to hear foreclosures had an average backlog of more than 7,000 cases each. Pending foreclosures in Cook County peaked at around 78,000 cases in 2012. So, to say that this crisis hit home/Chicago hard is an understatement.
The Illinois Mortgage Foreclosure Act requires a lengthy judicial process before a lender can evict a homeowner and sell the property to repay a delinquent mortgage loan. What struck me was the number of cases that resulted in default judgments because the homeowners who had fallen behind in their mortgage payments simply didn’t show up in court to defend the foreclosure lawsuit brought by the original lender or, more commonly, by the loan servicer. I knew that this was an issue that needed to be addressed.
Just appearing at the initial hearing – even without legal representation – would have virtually guaranteed at least some delay in the process and would have given the homeowner additional time and a little breathing room to work something out. The lender’s attorney nearly always had the proper supporting documentation to show that the homeowner had been served or otherwise had been given notice of the pending lawsuit. The Daley Center is centrally located in Cook County and is readily accessible by public transportation. So why did so many of these folks not show up? Why did so many others simply give up?
The basic reason was the overwhelming complexity of the process, both with the court and with the various offices and departments of the lenders themselves. For those with limited English proficiency, even with some interpretive help, this is an even more bewildering landscape. There were a multitude of other reasons, but each case shared a common, destructive outcome: every time a gavel came down and an order of sale was issued, a family lost their home. And the consequences were devastating: The fabric of family life torn apart, credit ratings ruined, jobs and careers lost or damaged, children forced to change schools, financial dreams shattered, profound physical and mental health suffering – to name but a few.
This nation-wide crisis has been the grist for the mills of politics, news reports, legislation, court cases, law review articles, books, and documentary films. It is not for me to offer hindsight analysis or propose an ideal model for the mortgage industry. On reflection, however, I know why I have spent so much of the past seven years involved in the general area of helping people understand mortgage financing. A general lack of understanding was one of the factors that got most people into this financial quagmire. On this 50th year of the Fair Housing Act, I hope that providing my experience and such knowledge can be a key factor to keep others out of it.