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Lake County foreclosure lawyersIt has been almost a full decade since the housing market crisis was at its lowest point. In late 2009, nearly 25 percent of homes with a mortgage were underwater—meaning that the value of the home was less than the amount remaining on the mortgage. Millions of homeowners across the country were forced to deal with the reality of foreclosure.

Now, it is 10 years later, and across the country, the situation has largely improved. Today, less than 4 percent of the nation’s mortgaged homes have negative equity. In Illinois, however, things have been much slower to recover, and about 8 percent of the mortgaged homes in the state are still underwater—approximately twice the national average. At least one expert believes that the state’s foreclosure laws have contributed to the slower recovery.

High Property Taxes, Slow Foreclosures, and Oppressive Red Tape

The aforementioned numbers were compiled by CoreLogic, a leading provider of property, consumer, and financial analytics. Frank Nothaft is the chief economist for CoreLogic, and he acknowledged his concerns about the health of the Illinois housing market. In the last year, home equity did increase by an average of $1,300 per mortgaged home, but that increase just barely kept pace with inflation, Nothaft said.

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Are you currently experiencing the onset of extreme financial hardship and perhaps thinking of tipping your hand and cashing it in when it comes to your home mortgage? Perhaps you should think again. Saving your home may be worth the fight because in all reality, your mortgage lender actually does not want to repossess your home.

As defined by QFINANCE, a collaborative effort of over 300 of the world's leading financial professionals, repossession is simply the return of merchandise after a period of default of time payments. Statistically defined, one in every 1126 homes throughout the United States are currently under foreclosure status as of August 2014.

Although easily defined by the professionals, the definition surely becomes more involved as it pertains to your personal financial security and quality of life. Before placing a call to an experienced foreclosure attorney to discuss your options, take note of why the bank really does not want to enter into the foreclosure process. Quite simply, they are not in the real estate industry to produce profit from the short sale of your home. Perhaps better understanding of why your mortgage lender is not breaking down your door to repossess your home may provide you with better insight of what the future may hold before seeking professional legal counsel.

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Facing an upside down mortgage can literally turn anyone's financial stability upside down as well. An upside down mortgage or when the collateral that secured a mortgage loan is considerably worth less than the balance owed has secured prominent standing in the U.S. real estate market in the past seven years. Unfortunately many homeowners are at a loss and have fallen victim to foreclosure and long-term damage to their credit rating but have often overlooked the option of a Deed in Lieu of Foreclosure.

For those seeking this form of debt relief, it is often in their best interest to contact an experienced foreclosure attorney, especially if you reside in Illinois where the laws regarding Deed in Lieu of Foreclosure can be complicated and add even more stress to an already frustrating situation.

This type of economic relief by which the borrower conveys all interest in real property to the lender to satisfy the loan agreement, currently in default, to avoid a full foreclosure of said real property. The majority of states follow guidelines set forth by the U.S. Department of Housing and Urban Development or HUD and include:

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The housing crisis that began concurrently with the financial crisis of 2008 may be a distant memory for most Americans, but according to Forbes there are many families still holding underwater mortgages, who are still dealing with it every day. “The number of homeowners who owe more on their mortgage than their home is worth is greater than the number of residents in most states,” Forbes reports. Zillow produced the latest statistics, reported at the end of December. “Nearly 11 million homeowners have negative equity in their homes… the rate works out to about one in five homeowners with a mortgage,” according to Forbes.

In 2007, the Mortgage Debt Relief Act was passed, which allowed taxpayers to exclude income resultant from the forgiveness of debt. “Debt reduced through mortgage restructuring as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief,” according to the IRS. Yet on December 31, 2013, this provision expired, essentially meaning that all forgiven debt in association with foreclosure or an underwater mortgage is now taxable. This, of course, will make a serious impact for families facing foreclosure or underwater mortgages in 2014.

At the end of last year, there were three bills in Congress that would have extended the Act, according to Forbes. These did not pass. “From a revenue perspective, one argument against extending the Act is that it depresses revenues by exempting otherwise taxable income from collections,” Forbes reports. Yet for the 11 million homeowners facing foreclosure—or eventual bankruptcy—because of an underwater mortgage, the expiration of the Act is essentially a new tax burden.

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The worst of the housing crisis may be over, but many Illinois homeowners are still facing an uphill battle on the brink of financial insolvency. Filing for bankruptcy may be the best way that a family can keep its home during financial hardship, even with the challenges that bankruptcy itself can present. Bankruptcy can offer some people a way to start over, a fresh beginning, and an opportunity to get out from under crippling debt that keeps plaguing recovery. Filing for bankruptcy can also offer a clean break, an opportunity to re-evaluate the financial practices that led to insolvency in the first place, and a chance to develop different habits to avoid the problem again. And, considering the most recent scare in the housing market, bankruptcy may be the best option for more people than ever since the market began its slow recovery. Zombie foreclosures are the new terror for American homeowners, and Illinois residents have been among the hardest hit.

According to CBS News, “hundreds of thousands of homes in the U.S. are now labeled as “zombie” foreclosures. That's when the owner of a foreclosed home leaves only to find out years later that he or she still legally owns the home and is on the hook for property taxes and other fees.” Florida leads the nation with the most zombie foreclosures, estimated by CBS at about 91,000 properties. Illinois comes in at a distant second, with 32,000 such foreclosures.

The foreclosure process in Florida and Illinois is a judicial one, according to CBS. Steve Cook, managing editor of Real Estate Economy Watch, says this could be one reason these states have so many zombies. “In judicial foreclosure states… it takes an average of 62 months—more than five years—for a foreclosure to clear,” he told CBS. “That's almost twice as long as in a non-judicial foreclosure state, where it takes 34 months.”

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