Foreclosure mediation plan pushed again in Kane
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Sticking to a promise she made upon becoming Kane County's chief judge, Judy Brawka asked the county board Friday for both permission and a budget to start a foreclosure mediation court.
The idea was first proposed by Sheriff Pat Perez and former Chief Judge F. Keith Brown in 2010, but the Illinois Supreme Court did not approve rules for such a mediation program until recently. If created, the plan has the potential to cost more money than it makes and cut into what has been a dark revenue source for the county in recent years.
But Brawka said nothing good really comes from the ongoing barrage of foreclosures, and a mediation program may keep more Kane County residents in their homes.
The mediation program is for residential foreclosures only. It begins when a lender files a residential foreclosure. The homeowner then receives notice about mediation but has the opportunity to opt-out.
A program coordinator then schedules an in-person meeting between the homeowner and lender.
At the mediation meeting, the homeowner and lender meet with an attorney trained in foreclosure and loan modification options.
If the lender and homeowner can agree to a modification that will keep the homeowner in the dwelling, the foreclosure case is dismissed.
The cost of making that happen for an estimated 3,750 foreclosures coming through the county's system in 2014 is $220,000. Brawka will charge an additional $50 filing fee to help fund the mediation. That fee is expected to draw about $187,500 in new revenue. That leaves a deficit of $32,500. Brawka said there is a chance money Illinois received from the national mortgage settlement with lending institutions could pay for $155,000 of the $220,000 costs of the program for the first few years. But that funding is still in limbo, she said.
"I'm acting as if it's not going to happen," Brawka told the county board's Judicial and Public Safety Committee.
With or without the outside money, Brawka said the county needs this mediation program for at least the next three to five years. The number of foreclosures skyrocketed from 847 in 2005 to about 5,000 in 2011. Since then, the numbers have started to drop. There were 4,552 foreclosures in the county last year. This year's trend projects about 4,000 foreclosures.
The foreclosure crisis has been a moneymaker for the county, raking in about $1.1 million in 2009 through about 3,700 foreclosure cases. That's the last year officials publicly disclosed how much revenue the county collected from foreclosures.
Officials have said all along that it is money they'd rather not see flow into the county coffers. Brawka echoed that sentiment Friday in renewing her pitch for the mediation program.
"This will more efficiently bring foreclosures through the system," she said. "Foreclosed property is not a good thing to have in our community. It depreciates our property value and guts our tax base."
The county board will vote next month on a resolution to approve the mediation program.
The actual funding, via the budget for the judicial system at large, won't be voted on until the fall.
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