By Gloria Carr

ELGIN -- Daniel Taylor worked for Chrysler for 27 years, had a family, had excellent credit, bought a house and never missed a house payment.

Then he lost his job.

Taylor has been getting unemployment, which just covers the mortgage and child support. He's been living off his savings to cover all other expenses. He sought help to get his mortgage modified through the Home Affordable Modification Reform program and got help through Neighborhood Housing Services of Elgin to start an application. His bank has denied his application for a modification once. He has reapplied.

The frustration is evident in Taylor's face and in his voice. He is having to prepare himself for the real possibility of losing his home.

The Elgin man was one of four NHS clients who shared an experience with Dick Durbin on Tuesday when the state's senior U.S. senator paid a visit to Elgin to see firsthand how the foreclosure crisis is affecting average Americans. Durbin toured an east-side neighborhood and met with clients of NHS facing foreclosure or who have been saved from losing their homes. Afterward, he held a roundtable discussion with NHS staff, city leaders and residents at the agency's East Chicago Street office.

Durbin plans to introduce legislation that will improve the modification reform program.

"A week ago, I had the secretary of the treasury, Tim Geithner, in my office talking about the same thing. What I told him is I'm not sure the folks in Washington know the real story in the neighborhoods and towns around America," Durbin said.

In Kane County, foreclosures have increased by 111 percent over the last two years, according to the Woodstock Institute. Elgin saw a 24 percent increase last year. Currently, there are an estimated 1,146 Elgin homes in foreclosure.

The first wave of foreclosures was a result of subprime loans, Durbin said.

"These were mini-explosions packaged as mortgages waiting to go off so when a person reached a certain point in the mortgage, (the payment) went sky high and they couldn't pay for it," Durbin said.

The second wave came from the high unemployment, Durbin said.

"People started losing their jobs, then couldn't make mortgage payments," he said. "That continues, unfortunately. It's getting a little better, slowly -- very slowly."

The third wave is coming from all those factors combined, which is bringing down home prices and creating "underwater" situations where the mortgage balance is more than the value of the home, he said. Some people are walking away from these homes, voluntarily going into foreclosure, he said.

A foreclosure is tragic for families and equally troubling for neighborhoods because the value of all homes go down and the property often becomes an eyesore, Durbin said. Cities, too, feel the effect, from increased crime to a loss of revenues.

What mystifies Durbin is why banks do not work more with homeowners to prevent foreclosures. The NHS clients who spoke with him Tuesday all had similar experiences with their lenders -- long delays, miscommunication and lost paperwork.

Vito Masotti said he kept calling to try to get his bank to modify his loan, only to hear excuse after excuse. He's been out of work for two years due to an injury. His family ran out of their savings in July. A court hearing was scheduled next month where the home would be put up for sale, but Masotti got a temporary loan modification. He still hopes to get a permanent modification that will enable him to keep his home, he told Durbin.

Getting a permanent modification can be difficult. First, you have to qualify. Second, lenders are using a formula called "net present value" to determine whether it is more financially beneficial to modify the loan or foreclose on it, said Jim Wheaton, deputy director of program services and strategy for Neighborhood Housing Services in Chicago. The net present value does not reflect current values or the market, so many homeowners are being excluded from the program, he said.

Durbin's proposed bill would address those problems. And it will help ensure banks can't rush to foreclose without trying to help families save their homes first, Durbin said.

"I hope something gets done," Taylor said.