On March 16, 2018, Crain’s Chicago Business ran an article titled “Chicago leads U.S. in underwater homes.” It discusses the findings of a recent report from the property data firm CoreLogic. According to the report, more than 135,000 Chicago-area home borrowers were under water on their mortgages at the end of 2017. This number exceeds the number of underwater properties in New York and Los Angeles combined. More than a decade after the housing crisis, the market recovery in Chicago remains sluggish.
Foreclosures are still a challenge in Chicago. Although figures are down from the height of the Great Recession (see Woodstock’s Data Portal), there were over 20,000 foreclosures in the Chicago region in 2017. Foreclosures still have an impact on communities throughout the region, and Woodstock continues to field dozens of technical assistance requests from community-based organizations looking for information and granular data on foreclosure. As our research shows, foreclosed and vacant homes have negative impacts on surrounding property values and hit low-income and minority communities the hardest.
Chicago is not out of the weeds yet, and we are seeing a resurgence of some of the same issues we had ten years ago. As the Financial Times notes, high-risk mortgage lending is making a comeback under the name of ‘non-prime’ lending. Last week, the Senate voted to dismantle parts of the Dodd-Frank Act—the very act meant to protect the country from another financial crisis. The bill (S. 2155) exempts some lenders from having to report mortgage data, making it more difficult to spot predatory and discriminatory lending. This is a slap in the face to places like Chicago that haven’t yet recovered from our last financial crisis. Resources are still needed to help homeowners and communities still feeling the negative impacts of the foreclosure crisis.