By Christine Ricciardi
February 11, 2011
Foreclosure filings in the six-county Chicago metropolitan area rose 14% between 2009 and 2010, and are expected to trend upward during this year.
Nearly 80,000 new foreclosures were filed in Cook, DuPage, Kane, Lake, McHenry and Will counties, according to Woodstock Institute, a Chicago-based nonprofit. In the region, 35.1 out of every 1,000 properties with a mortgage were in foreclosure in 2010.
McHenry County posted the highest year-over-year gain in foreclosure filings, up 33%, while Cook County experienced the smallest gain, up 10.6% from a year earlier.
"Clearly, the foreclosure problem in the Chicago area is not going away anytime soon," said Geoff Smith, senior vice president of the Woodstock Institute and co-author of the report. "It is likely that we will see an even larger jump in foreclosures in early 2011."
Woodstock said that filings grew despite year-end moratoriums, which caused foreclosure filings to deplete in the fourth quarter. There were a total 21,026 new foreclosure filings during that time, according the firm's data.
As foreclosure filings grew, so did completed auction sales. Almost 31,000 properties were auctioned during 2010, 95% of which ended up as lender-owned, or REO, and "likely vacant." The amount of completed auctions increased 25.2% from the year prior. However, on a quarterly basis, foreclosure halts affected auction volumes around Chicago, dropping 55.2% in the fourth quarter.
"This quarter-over-quarter decrease is likely due to the "robo-signing" scandal in late 2010 when it was revealed that many servicers were rapidly processing foreclosure paperwork without properly verifying the associated documents, often in violation of state foreclosure laws," the report said.
During the past three years, the federal government created several housing initiatives to aid lower- to middle-income families and help them stay current on their mortgages, including forbearances to foreclosure. According to Woodstock's data, the middle- to upper-income families are now feeling the ramifications.
"Growth in new foreclosure filing activity continues to be concentrated in the region's middle and upper-income urban and suburban communities," said the report. It added that modest-income communities of color that were hit hardest earlier in the crisis continue to see decreases in new foreclosure filings.