Area foreclosures are growing more frequent
Tara was thrilled when she was able to buy her first home and live closer to her mom. Tara and Jason were both only 21 when they bought the condo...Their first mortgage was with a company offered by the builder of their townhome. The couple made one payment to the first company, and their mortgage was sold to a second company in June 2003...The checks were sent on time as arranged and cashed, but never credited to the mortgage loan.

Tara Parrish and her husband, Jason, won't be celebrating Christmas in the Plainfield condominium the young couple purchased in 2003.

Instead they'll celebrate in a much smaller home they're now renting in Crest Hill. Their Plainfield residence was lost to foreclosure in November.
        Tara Parrish and her husband, Jason, are upset with the practices of mortgage companies they dealt with before they lost their home in foreclosure. 
      
       (Brian Loeb/Staff Photographer)
Tara was thrilled when she was able to buy her first home and live closer to her mom. Tara and Jason were both only 21 when they bought the condo. They were determined to plant roots and buy a place of their own, even though Jason was the only one working and the couple had a 2-year-old son with autism.

What Tara and Jason didn't know at the time was their attempt at achieving the American dream would end in disaster. Now Tara and Jason are working to rebuild their lives and their credit rating.

The couple admit they made some mistakes during their first foray into home ownership, but they also believe they were victims of some predatory lending practices, something that is problematic around the country and has spawned class-action lawsuits and legislative changes.

Tara and Jason aren't alone. The foreclosure numbers are high in Will County, and they've spiked in the past few months -- just in time for the holidays.

Tara and Jason had been living in southern Illinois. But when Jason got a job at a Joliet restaurant, the young couple was finally able to move north.

Their first mortgage was with a company offered by the builder of their townhome. The couple made one payment to the first company, and their mortgage was sold to a second company in June 2003.

The trouble began in August 2004 when the transmission went out on the couple's minivan. Suddenly they were in over their heads with bills. The couple filed for bankruptcy, but specifically excluded their home loan from the proceedings. They wanted to keep the house at all costs.

They contacted the second mortgage company and arranged to make two half payments for the September mortgage. The company agreed, according to a letter that it subsequently sent the couple. The checks were sent on time as arranged and cashed, but never credited to the mortgage loan.

The second company then told Tara she hadn't made her payment for that month, even though she had canceled checks that proved she did.

The debate lasted several months, and eventually Tara got mad and she stopped sending money, fearing it would be deducted from her bank account, but not credited to her mortgage.

This led to a snowball effect of fines and fees for late payments that took weeks and numerous phone calls and faxes for Tara to unravel.

In May 2005, the second company sent Tara and Jason a letter that admitted the company had received the two half payments in August and September 2004 on time, but the money had "inadvertently" been allocated toward a late charge balance of $51.94. The rest was deposited into an escrow account.

Ultimately, Tara and Jason agreed to be put on a payment schedule to pay off the fines and fees and get current with her mortgage.

Then the second company sold the couple's mortgage to a third company in May 2006.

The third company told her not to send money while the transition took place. Then it sent a letter welcoming the couple to that company. Then it sent a letter in June saying Tara and Jason owed $15,000 in principal, interest late charges and fees.

She tried to work out a new payment agreement, and the company sent her an application.

"I did it," Tara said. "I was going to jump through any hoop (to save the house)."

The third company told Tara not to send any payments in while the application was being processed. The company ultimately rejected the couple.

Finally, in mid-September, someone at the mortgage company told Tara that her home was scheduled to be sold at a sheriff's auction on Oct. 18.

Tara contacted lawyers, but none wanted to get involved because she didn't have the money to pay them. On Nov. 20, the foreclosure was finalized in a Will County courtroom.

Officials from neither the second or third companies wanted to comment on Tara and Jason's situation specifically because of privacy concerns. But spokeswomen for both companies said they have tips and policies designed to help customers avoid foreclosure.

Looking back

Now all Tara has for her efforts is a thick binder filled with all of the documents she accumulated in her battle to save her home. She contacted the Illinois attorney general's office, which reviewed her file, but declined to get involved.

Tara admits she made mistakes, especially when she stopped paying her mortgage to the second company for three months after her half-payments weren't credited to the loan.

"I'm not innocent, but as soon as I did that, I tried to make it right," she said.

She also never had a lawyer represent her, not even when she bought the condo, which is something experts always advise.

She attributes some of what happened to her to predatory lending practices. Some people have filed class-action lawsuits against mortgage companies that they claim ran roughshod over homeowners until they lost their homes. Consumers complained the companies weren't posting payments in a timely fashion, failed to return phone calls, improperly adjusted adjustable rate mortgages or changed loan terms suddenly right before closing.

Illinois passed the High Risk Home Loan Act in 2003 to protect consumers against some of the abuses, said Susan Hofer, a spokeswoman for the Illinois Department of Financial and Professional Regulation.

There are many ways for potential homeowners to protect themselves against predatory companies or even companies that operate within the law, but offer risky loans to people who may be getting in over their heads. (See back page story for Hofer's advice on how to stay out of trouble.)

Joliet attorney Myles Jacobs, chairman of the Will County Bar Association's Real Estate Committee, said there is a wide range of mortgage companies out there.

"There are some good mortgage brokers, some bad ones and some dishonest ones," Jacobs said. "They (the dishonest ones) take advantage of people who shouldn't be buying a house."

There are all kinds of tricks that harm consumers, he added, including adjustable rate mortgages with excessively high rates, loans for 100 percent of a home's value and inflated home values.

Jacobs said he and other lawyers can help people stay out of trouble, but often it's too late.

"Usually, by the time I get into something like this, they've already applied for the loan," Jacobs said.

Home shoppers should contact an attorney before they are locked into a mortgage, he advised.

"It's a sad situation," he said.

Neither Hofer nor Jacobs was commenting on Tara and Jason's case specifically, but they were speaking generically about issues that can lead to foreclosure.

Tara and Jason are among a growing number of Will County homeowners who have been forced into foreclosure this year.

The number of foreclosures here has increased from last year, said Laurie McPhillips, recorder of deeds.

In 2005, there were a total of 2,479.

Through October this year, there have been 2,671. Foreclosures have been averaging 300 a month the last three months. If that pace continues, there could be more than 3,000 this year, she said.

"That's a huge jump," she said.

Will County continued to post the area's highest foreclosure rate in October, with one new foreclosure filing for every 267 households -- more than three times the national average, according to RealtyTrac, an Irvine, Calif.-based private company that tracks foreclosures.

Many of the foreclosures are on the 80/20 percent mortgages obtained by people who don't have 20 percent to put down, McPhillips said. In essence, they're being allowed to borrow 100 percent of the home's value.

"You're mortgaged to the hilt, basically," she said.

Last year, McPhillips did a random survey of 15 homeowners who had ended up in foreclosure. All had lost their homes within five years of purchasing it, and most had only owned their property for three years.

Tara and Jason had an 80/20 loan, and they had owned their home for three years, so they fit McPhillips' informal profile. (They never had problems with their 20 percent mortgage.)

But Tara still believes she was raked over the coals by the mortgage companies that failed to credit her payments, put her on hold, transferred her call numerous times, failed to acknowledge receiving faxes and sold her mortgage just as she was catching up and getting on track.

She drove past her old condominium the other day. A real-estate sign is in the front yard. The home isn't decorated with lights for Christmas, which makes her sad.

"The last couple of weeks, every time I get on the phone, I cry," she said.
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