News and Updates

Homeowners with troubled mortgages get lifeline from New Jersey non-profit

A national non-profit that helps troubled homeowners hang on to their homes took its first step into Illinois last week with the purchase of 100 Cook County mortgages valued at a total of $16 million.

The group, National Community Capital, will partner with Chicago-area housing agencies to help keep current owners in their homes, through reducing the amount owed, credit counseling and other methods, said Scott Fergus, CEO of National Community.

Fergus acknowledged that 100 homes is "a drop in the bucket," but "we intend to keep buying and buying in Illinois," Fergus said. At least 23,300 Cook County homes were in some stage of the foreclosure process at the end of 2017, according to a January report from Attom Data Solutions, a real estate information service. National Community is a subsidiary of New Jersey Community Capital, a 29-year-old organization based in New Brunswick, New Jersey. The groups have already been working in the troubled-mortgage realm in New York, North Carolina and Florida, Fergus said. In Florida, they have worked with about 1,000 troubled loans.

Jorge Newbery, CEO of American Homeownership Preservation, a Chicago-based for-profit that also buys and re-sets troubled mortgages, said the newcomer "is welcome. If we can get socially minded investors buying all the non-performing loans and keeping people in their homes, it's good for reinvigorating these neighborhoods."

Helping homeowners keep their homes prevents vacancy (and the ensuing vandalism) and helps keep a neighborhood's population stable, Newbery said. His organization has handled more than 6,000 broken home loans since 2008, several hundred of them in Cook County, Newbery said.

While the foreclosure crisis crested a few years ago, troubled loans are still dense in Cook County and the larger Chicago metropolitan area, Fergus said. That's in part because of the region's slow recovery of home values, particularly in moderate-income areas where home values plummeted.

The 100 Cook County mortgages, not all of them in foreclosure but all with homeowners who are struggling to pay, were part of a nationwide portfolio of 495 loans that New Jersey Community Capital bought Jan. 31 from Fannie Mae, the Federal National Mortgage Association, a federal government-supported enterprise. The group will now begin contacting the 100 homeowners.

About 90 of the mortgages are on Chicago homes, and the rest are in Cook County suburbs, he said. He declined to be give specifics about neighborhoods because homeowners have not yet been contacted.


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