From today's NY Times:

In a giggly voice, a small homeless girl with blue-framed glasses chased her younger brother and sister around the front porch of a long-deserted two-flat on the South Side, chanting, “Fight, fight, fight, ’cause housing is a human right.”

Jimmya Biggs, 10, and her siblings learned the chant — a nursery rhyme for the age of foreclosure — from a group of low-income-housing advocates, the Chicago Anti-Eviction Campaign. In a well-planned and orchestrated event on June 17, the campaign moved the children, their single mother and her teenage sister into the foreclosed building to bring attention to what the co-founder of the group, Willie J. R. Fleming, called the “twin evils” of homelessness and foreclosures.

Just a few weeks earlier, the children and their mother, Martha Biggs, 34, had been living in the family minivan, doing their homework and saying their prayers in the dim glow of a dome light.

“At the Anti-Eviction Campaign, we decided to play matchmaker and put homeless people into people-less housing,” Mr. Fleming said at a news conference on the front lawn of the two-flat.

But the family could soon become homeless again. The group does not own the red brick building in the middle of the 6700 block of South Prairie Avenue. It has been in legal limbo for about two years, vacant and abandoned by its owner, Stacy Hill, a schoolteacher who is exhausted by negotiations with banks and lawyers for a mortgage modification, said Ms. Hill’s mother, who gave the group the keys to the house. Ms. Hill found it increasingly difficult to maintain her mortgage payments because she had problems keeping tenants.

Deutsche Bank National Trust Company filed a foreclosure suit against the owner in 2009. Neither bank officials nor Ms. Hill, who has since moved to Philadelphia, would comment.

“She couldn’t get any relief,” said Ms. Hill’s mother, Pat Hill, executive director of the African American Police League and a supporter of the Anti-Eviction Campaign. “The banks were too big to fail and got bailed out. What about the people?”

The Anti-Eviction Campaign chose the two-flat because it was one of at least 1,700 foreclosure actions temporarily halted in Cook County after Fisher & Shapiro, the law firm handling the cases on behalf of the banks, self-reported to Circuit Court officials three months ago that documents in some of the cases had been altered. Many foreclosure proceedings could be delayed for months.

Last Monday, Ms. Hill filed suit in Federal Court against Fisher & Shapiro, alleging that the firm violated the Fair Debt Collection Practices Act. The suit seeks class-action status and damages.

Pat Hill said that her daughter is not fighting to get the building back. “She doesn’t want it any more after all of this,” Pat Hill said. “As far as we’re concerned, this home belongs to Martha and her kids and the community.”

The law firm’s managing partner, Lee Perres, did not return telephone calls seeking comment.

The only noise coming out of the 101-year-old building for much of the last two years was the sound of thieves ripping out copper pipes, radiators, ceiling fans, bathroom fixtures and kitchen appliances. Neighbors feared that another crack house was slowly being born.

Before moving into the two-flat, before sleeping in their car, before wandering from relative to friend like refugees, the family rented an apartment in a weary West Side building. It, too, was in foreclosure.

When the building changed hands last year, the new owners raised the rent. Working on the line at a hot dog factory, Ms. Biggs, who grew up in the Cabrini-Green public housing development, said she could not afford it, along with gas and electricity. “We became homeless,” she said.

Mr. Fleming, the housing advocate, who also once lived in Cabrini-Green, knew Ms. Biggs and asked her to move into the South Prairie Avenue two-flat to make a statement and to provide shelter for her children. They both knew it would be risky. The authorities might come banging on the door and demand she and her family leave. But worse than that, she said, her children’s hearts could be broken again.

“They love it here,” she said the other day, showing off the freshly painted rooms and the used dining room set given to her by a neighbor. “This is a blessing. My kids don’t have to worry about where they’re going to sleep or wash up. What happens next is in God’s hands.”

The group hopes that if the bank assumes ownership, it will allow the family to live there at a reasonable rent.

Before moving in, Ms. Biggs had to promise Mr. Fleming she would help repair the building. For six weeks, she worked alongside a skilled handyman, Tommy Tillman, learning how to put up drywall and install tile and plumbing fixtures.

She took time out to attend the eighth-grade graduation of her 15-year-old daughter, Jajunna. “She did it even though we were homeless,” Ms. Biggs said of her daughter. “I’m so proud of her.”

Ms. Biggs hung Jajunna’s red cap and crown on a nail in the wall of the sparsely furnished living room.

“For right now,” she said, “that’s all the decoration I need.”

The new tower will have 499 apartments, 18,000 square feet of retail and a 272-car parking facility. Amenities will include an outdoor pool, fitness center, media room, indoor spa and more. The project should open for occupancy by February 2013.

Magellan has already completed a collection of condominium and apartment towers on the site, with an average occupancy of about 95%. The buildings include the Regatta, Chandler, Tides, Shoreham and Lancaster, as well as the new Village Market, a 105,000-square-foot retail mall that will include the anchor Mariano’s Fresh Market.

James Loewenberg, co-CEO at Magellan, tells GlobeSt.com that the complex is so immense, and successful, that the company doesn’t pay much attention to the rest of the multifamily market in Chicago. “We’ve been strong since we started,” he says.

Also, the 28-acre site is only just more than half built-out, he says. Another seven buildings are planned. “When it’s all done, we should have more than 5,000 units and 15,000 residents on the site, with another two hotels. We’ve got about 3,000 units now. We’ll see how the Coast goes, but we hope to start the next tower next year,” Loewenberg says.

Brininstool Kerwin & Lynch designed the Coast. McHugh Construction Co. is the general contractor.

The nation, but not individual states like Illinois, has passed into the third stage of its mortgage crisis, one that shows some inklings of a lending industry on the mend, the Mortgage Bankers Association said last week.

The first stage of delinquencies and foreclosures came from subprime and low-documentation mortgages made to borrowers who should not have received them. The second stage, where delinquencies were widespread among all types of borrowers, was a result of a nationwide recession and borrowers who had trouble making ends meet.

"Now we've entered the third stage, where we've got spotty recovery," said Jay Brinkmann, the trade group's chief economist.

Nationally, the percentage of loans in foreclosure at the end of the first quarter decreased from 2010's final quarter and from March 2010. Loans 90 days or more past due, termed seriously delinquent, have fallen for the past five quarters and in March were at their lowest level since early 2009.

"I think we're looking at a market on the mend," Brinkmann said. "Things are looking better than they did last year or the year before."

But national trends, Brinkmann noted, don't matter when it comes to determining local home values. And in that context, Illinois is not among the states where a recovery has begun to take hold.

Illinois, along with Florida, California, New York and New Jersey, accounted for 51 percent of all foreclosure activity on one- to four-unit residential properties nationally, according to the Mortgage Bankers' first-quarter mortgage delinquency survey. As of the end of March, 6.77 percent of mortgages in Illinois were in foreclosure.

Delinquencies remain a problem as well. Another 2.93 percent of the almost 1.7 million mortgages in Illinois were 30 days delinquent at the end of March and 1.25 percent were 60 days delinquent. Lenders typically initiate foreclosure proceedings against a homeowner when a payment is 90 days past due and termed seriously delinquent.

Part of the problem in Illinois, as in such states as Florida and New Jersey, is that foreclosures are processed through local court systems. While that process gives borrowers more time to try to save their homes or live in them longer while they make other arrangements, it also means it takes longer until foreclosed homes are returned to the for-sale real estate market.

"Things are moving in different directions," Brinkmann said.

Typically, delinquencies peak in the year's fourth quarter and hit a seasonal low in the first quarter.

The association's survey covers almost 44 million first mortgages on one- to four-unit residential properties, or about 88 percent of all first mortgages outstanding.