For 3 1⁄2 years, Melissa Scheiblein, her husband, Josh, and their three children have leased their Lake in the Hills house and regularly paid their monthly rent.
They even planned to buy the home from their landlords. Unfortunately, the landlords weren’t paying the mortgage and a foreclosure case was filed in 2010 – one of 3,600 foreclosure cases filed in McHenry County that year.
According to real estate professionals, even more homes may be foreclosed on this year.
The Scheibleins continue to try to buy the house from Freddie Mac and have made multiple offers.
However, they have not come to an agreement on a price, and the family continues to struggle to work with Freddie Mac.
They say they’re willing to make the major repairs themselves, but right now they do only basic maintenance.
“We’ve done nothing to destroy the home, but we’ve really done nothing to improve the home because it’s not ours to really improve upon,” Melissa Scheiblein said.
The family has received help from U.S. Sen. Mark Kirk’s office to try to resolve the issue, all while trying to avoid being evicted.
The Scheibleins fear that more people will be looking at the same situation of possibly being forced to leave their homes, and said they’ve spoken to other people facing foreclosures.
“I’ll walk you up and down the street and I’ll point out every empty house on the street here,” Josh Scheiblein said.
The worst of the foreclosure crisis may not be over, said Sue Miller, a broker manager for Coldwell Banker Honig-Bell in McHenry.
Many people in 2004 through 2006 bought houses with balloon mortgages, Miller said.
In these loans, there would be very little money down, regular payments for up to seven years, and then a large balloon payment when the balance of the loan was due, or the person could refinance.
“Those products, which represent a big portion of communities, will start coming due,” Miller said.
Miller said many homes bought under balloon mortgages cost at least $500,000.
The assumption was that house values would continue to go up. However, they have dropped.
“I think we’ve seen a crisis, and that crisis is going to continue,” Miller said.
Miller said she expects foreclosure filings to increase as more people default on their loans and short sales fail to be worked out.
“I think we will see that number ... rise and continue to put pressure on the current market,” Miller said.
Housing continues to be a buyers’ market as the large stock helps keep home values down.
Banks try to have houses change hands via short sales before filing foreclosures, Miller said.
If a bank is in possession of a house, it has to maintain it and preserve it, hoping for a sale, Miller said.
“A bank doesn’t want the house back,” Miller said. “It’d much rather you sell that house. They work out the cost of selling before they take that house back into inventory.”
Jim Haisler, CEO of the Heartland Realtor Organization, also said he expected foreclosure filings to increase.
He said in previous years, banks were so overloaded with foreclosure filings, they would outsource paperwork to other companies, who may not have read through the paperwork.
A court case slowed down that process, but it has been resolved, and foreclosures are picking up again, Haisler said.
Haisler said the local market is recovering, but it still has a way to go.
Even as more people may be forced out of their homes, Haisler said more are looking to buy houses, or at least move into their own house by renting it, especially as the rental market is strong.
He said sales to first-time home-buyers remain strong, as young people who moved back in with their parents after graduating from college now are able to move out on their own.
Prices still are down, however, Haisler said. “There’s a lot of good opportunities for home-buyers.”
Casey Meyers, managing broker of Prudential First Realty in Woodstock, is more optimistic when it comes to foreclosure numbers.
She said she thinks foreclosures won’t skyrocket as more people try to leave their homes via short sales.
“I believe the worst is over,” Meyers said. “I feel like in McHenry County we are leveling off. I don’t see a big hit.”
In the current listing of available properties for sale, 321 are bank-owned foreclosures and 889 are short sales.
Meyers said as Realtors went through the foreclosure crisis, they learned a lot about how to better help people through the home-buying process.
“We’ve got a handle on it and are able to negotiate it,” Meyers said.
Mortgage foreclosure filings in McHenry County
2013: 407 cases as of Feb. 22
2012: 3,065 cases
2011: 2,906 cases
2010: 3,635 cases
2009: 2,746 cases
2008: 2,315 cases
2007: 1,549 cases
2006: 1,098 cases
2005: 889 cases
2004: 826 cases
2003: 789 cases
2002: 758 cases
Source: McHenry County Circuit Clerk’s OfficeNew state foreclosure rules in place