Mayor Richard M. Daley today detailed a package of legislative proposals the City will support in Springfield and Washington, D.C., to deal with the home mortgage foreclosure epidemic facing Chicago and the nation.

"Over the last year, Chicago has faced one of its greatest challenges: the home mortgage foreclosure crisis. It is having a profound effect on hardworking families throughout our city - but especially in neighborhoods where people are struggling to make ends meet," Daley said in a news conference held at Fuller Park Field House, 331 W. 45th St.

This week, the Federal Reserve chairman said he expects foreclosures and late payments on home mortgages to continue to rise, so it's clear that the foreclosure problem requires everyone's attention: government, not-for-profits and, of course, the lending industry, Daley said.

"We must keep families in their homes and work with lenders to create solutions that will protect our neighborhoods," the Mayor said.

"If we don't continue to address this challenge, we run the risk that whole streets in many parts of our city may be at risk, threatening the economic future of these homeowners and the tax base of our city. Our entire city benefits when we work to prevent foreclosures," Daley added.

In Chicago, the number of foreclosure filings jumped by about 40 percent from 2006. There were approximately 14,250 foreclosures started in 2007, compared to 10,339 foreclosures in 2006.

"It is a problem that we anticipated years ago and continue to address today. As far as I'm aware, no other city or state is addressing this challenge in the way we are. But there is much more that needs to be done if we are going to keep alive the American dream of home ownership and keep our neighborhoods stable and strong," he said.

The package of state and federal legislative proposals is critical to enact if we are going to help people avoid foreclosure and assist residents and neighborhoods being negatively affected by foreclosure, Daley said.

At the state level, the City will support the following bills:

• Senate Bill 2376, which will enhance protections for renters, who are often innocent victims who get evicted when the landlord has failed to pay his or her mortgage.
• House Bill 5788/Senate Bill 2566, which will create a Foreclosure Prevention Counseling Fund that would make grants to HUD-certified counseling agencies to work with homeowners to prevent foreclosure. The federal and state dollars available now for foreclosure prevention counseling are primarily one-time allocations. We need the assurance of ongoing support. The revenue for the fund would come from raising the annual license fee for corporations in the mortgage lending industry.
• House Bill 4385, which is aimed at strengthening neighborhoods by making it easier for municipalities to gain control of abandoned property and put it back into productive use. Large numbers of vacant properties in local communities can depress property values, increase concerns about public safety, and send neighborhoods into a downward spiral. The bill would refine the abandonment criteria to make it easier for courts to declare a property abandoned and require the owner of a property that meets abandonment criteria to secure and/or repair the property within prescribed timeframes to avoid losing the property.
• And an amended House Bill 5037/Senate Bill 1905, which expedites city intervention on distressed condos and makes sure a receiver is appointed before any major deterioration sets in so the building can be put back to productive use. We have discovered that a lot of these buildings were purchased through fraudulent transactions and currently, we don't have the tools we need to properly deal with them.

The Mayor said he will soon meet with the Illinois Congressional Delegation to discuss further the city's federal agenda on foreclosure, including its strong support for:

• Legislation to allow bankruptcy judges to modify mortgage loans. This proposal was introduced by Senator Durbin and is supported by many members of the Illinois Congressional Delegation and the Chicago City Council.
• Legislation to increase federal Community Development Block Grant funds to help cities deal with the impact on neighborhoods of the increase in foreclosures.

The Mayor also outlined initiatives the City already undertaken to help residents deal with the foreclosure issue.

Since late last year, the City has held a series of "Borrower Outreach Days" for people who might already find themselves in over their heads with their mortgage payments and also for those who want to make sure it doesn't happen to them. They are held in and around communities that have been hardest hit by foreclosures.

They offer loan work-out sessions with counselors and lenders, access to free legal assistance and information about the City's financial literacy programs. Almost 1,200 people have received assistance from their lenders or counselors during face to face meetings at these sessions.

There are two outreach days scheduled in March: Saturday, March 15th, from 9 a.m. to 2 p.m. at Warren Park, 6601 N. Western Avenue and Thursday, March 20th, from 3 p.m. to 8 p.m. at Fuller Park, 331 W. 45th Street.

Since 2003, well before the crisis emerged, the City and its partners began to combat foreclosures through the Home Ownership Preservation Initiative, or HOPI. Through the initiative, any Chicago resident who is having trouble paying their mortgage can be connected to a financial counselor simply by calling 311, the City's non-emergency number.

The line took almost 6,000 calls from borrowers in 2007 and both HOPI and the 311 program have become models for other cities around the country.

Last year, the City substantially increased our efforts to inform residents about the availability of its 311 foreclosure assistance campaign with a widespread marketing campaign.

And on January 1, the City launched a new "early warning" process to give homeowners more time to get help as soon as a foreclosure action is initiated.

In addition to its longstanding financial support for homeownership counseling, the city also leveraged private resources to substantially increase the number of credit counselors available to support, educate and assist homeowners. As a result, more homeowners will be able to seek help from trusted, HUD-certified credit counselors in their own neighborhoods.

"Of course, even with all the steps we have taken, and even if all these proposals become law, there will still be much to do to give every person the same chance to share in our City's progress and promise, especially those who live in poverty and who struggle to make ends meet," Daley said.

"That's why we are continuing to meet with representatives of the lending community to ask them to provide even more help to homeowners who are facing foreclosure.

"We have an obligation to address the changing needs or our people and they continue to need a lot of help right now in the face of this epidemic of foreclosures. The legislative proposals we're supporting would be a big step in the direction of ending this crisis," Daley said.