By Mary Ellen Podmolik
August 15, 2012
Auctions of foreclosed homes in the Chicago area more than doubled during the first half of the year, taxing the resources of court systems and potentially delaying a housing recovery as those homes slowly make their way to the market.
An overall uptick in foreclosure activity has increased the average amount of time it takes a home in the Chicago area to make its way through Illinois courts, which handle foreclosure cases.
During the first six months of the year, 17,432 homes in the six-county area were auctioned, and 91.3 percent of them were repossessed by lenders and became bank-owned, according to data to be released Tuesday by the Woodstock Institute. Only about 1,500 properties were sold to other parties at auction.
The overall number of completed auctions rose almost 105 percent from the first six months of 2011 and stands as evidence that, with various investigations behind them, lenders are moving forward and trying to clear the glut of outstanding cases. It's highly likely that auction activity during the second half of the year also will surpass its year-ago level, according to Woodstock, a public policy and research organization.
"That presents challenges for communities, because there is going to be a substantial increase in distressed properties in the market, and that's going to have a negative effect on surrounding property values and ultimately prolong a depressed housing market," said Tom Feltner, a Woodstock vice president.
It's not just the process that gives consumers more time. It's the backlog of cases.
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