The real estate market is a complex combination of factors.  However, it generally reflects the overall economic health of the country. When the economy is healthy, the real estate market does well, but when economic growth slows, there is usually a corresponding slowdown in home sales and new mortgages. In such situations, foreclosures generally increase as well.

With all of this mind, a recent report indicates that the economy is likely to be doing well, as the number of properties in foreclosure around the country has dropped fairly substantially compared to the same time last year. In the greater Chicago area, defaults, foreclosure filings, and lender repossessions have also decreased.

A Look at the Numbers

Last month, ATTOM Data Solutions released the Midyear 2019 U.S. Foreclosure Market Report that tracked foreclosure activity throughout the United States for the first six months of 2019. The report found that just under 300,000 properties are in some stage of the foreclosure process, a drop of 18 percent compared to the mid-year report from 2019. This figure represents the lowest level of foreclosure activity in the last 12 years. The 2019 number is a staggering 82 percent decrease from the first half of 2010 in which 1.65 million properties had foreclosure filings.

When a homeowner cannot afford to make his or her mortgage payments, the home may go into foreclosure. In short, this means the homeowner's mortgage lender takes possession of the home. However, this is not an instant process. The foreclosure process can take close to a year to complete in Illinois and early in the process, a homeowner can reverse the process and keep his or her home.

Foreclosure is often discussed in conjunction with bankruptcy. Both are legal proceedings that can affect individuals facing financial hardship. Below are three ways a homeowner can avoid the foreclosure process and keep his or her home. In Illinois, all foreclosures are judicial foreclosures, which means that the lenders involves the court to complete the foreclosure process.

Modify your Mortgage Loan

Evaluating the legality of your home loan documents is a critical first step in the foreclosure process. During the housing boom, many mortgage lenders cut corners and failed to properly comply with securities laws in their pursuit of maximizing profits during the boom. If you have received a notice of foreclosure, your loan documents should be reviewed and evaluated for legitimacy by legal counsel as soon as possible.

Lenders And Banks Originated Invalid Documents

Many lenders were doing so much business, so quickly, that what resulted were work process failures that caused invalid loan documents to be originated and issued to consumers and other lenders. Potential cases of lender misconduct include robo-signing, predatory lending, inaccurate documentation and defective transfers.

For many homeowners, a loan modification request is much like a ride on a Ferris wheel. The lender offers assistance through HAMP or some other federal program, raising hopes and expectations. Then, the bank suddenly withdraws its offer, many times based on technical grounds, such as turning in documents a day or two late, a Debt To Income ration that is a few points too low or a Loan To Value ratio that is a few points too high. This rejection is followed swiftly by another assistance offer, and the wheel starts moving again.

All this time, the bank is generally not accepting partial payments, so the delinquency keeps getting higher and higher. Eventually, the Ferris wheel stops. The lender soberly declares that the delinquent amount is too high to be repaid. Foreclosure follows.

Chapter 13 Bankruptcy may offer distressed homeowners a way to get off the Ferris wheel and get on the tram that takes you where you want to go.

The bankruptcy filing rate is at its lowest point in seven years for most everywhere in the country, except for the Land of Lincoln and a few other states.

November 2014 filings were down 16 percent, when compared to November 2013. Much of the decrease was due to a much lower commercial bankruptcy filing volume. These new filings were down 27 percent. One observer pointed to a combination of high filing costs, low consumer spending and low interest rates as being primarily responsible for the decline.

Illinois, however, had the fifth-highest per capita bankruptcy filing rate in the country. Its 4.72 filings per 1,000 people was eclipsed only by Tennessee (6.22), Alabama (5.34), Georgia (5.30) and Utah (4.93).