FOR IMMEDIATE RELEASE
Chicago Region Foreclosures Skyrocket in 2006
Says New Woodstock Institute Analysis
A new analysis of 2006 foreclosure data by Woodstock Institute shows that foreclosure filings have skyrocketed, reaching their highest point in recent memory.
The spike in foreclosures is in large part a product of the ongoing crisis in the subprime lending market. This crisis has been fueled by a number of factors including the growing popularity of a variety of risky adjustable rate mortgage (ARM) products that allow borrowers to have low initial
monthly payments that reset to much higher levels after a few years.
These loans were increasingly popular in 2005 and 2006, with the share of mortgage originations that were option ARM loans increasing from 8.4 percent in 2005 to 12.3 percent through May 2006.
The popularity of these complicated and risky products combined with loose mortgage underwriting standards that often include no documentation of borrower income have driven foreclosure rates to record highs, says Geoff Smith, Woodstock Institute research director.
The report shows that:
*There were nearly 29,000 foreclosures in the Chicago region in 2006the highest level of foreclosure in the last eight years.
*Region-wide, foreclosure saw a one year increase of over 36 percent between 2005 and 2006.
*The City of Chicago had 18.4 foreclosures per 1,000 mortgageable properties. Within the city, however, there was substantial variation in foreclosure levels by neighborhood.. Neighborhoods in the south and west sides of the city had the highest levels of foreclosure in the region.
*South Suburban Cook had nearly 34 foreclosures per 1,000 mortgageable properties, a number nearly 2.5 times greater than the regional average.
The full report is available online at