Completed foreclosures skyrocket from 2011 to 2012, new data show

Servicers work through foreclosure backlog after investigation into foreclosure processes

CHICAGO - The Chicago region saw the highest year-over-year growth in completed foreclosure auctions since the beginning of the foreclosure crisis, new 2012 data from Woodstock Institute show. Foreclosure auctions, which signal the completion of the foreclosure process, grew by 73.8 percent in the Chicago six county region from 20,281 auctions in 2011 to 35,244 auctions in 2012.  

 

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The vast majority of properties sold at auction become lender-owned, or real estate owned (REO), and are likely vacant. In 2012, 91.2 percent of auctions in the region entered REO status, down from 93.7 percent in 2011.

 

"We saw a precipitous drop in foreclosure auctions while the robosigning scandal was being investigated," said Spencer Cowan, Vice President of Research at Woodstock Institute. "Now that the case has been settled with new standards for foreclosure processes in place, servicers are working through the backlog. This will almost certainly lead to an influx of vacant properties on the market."

Concentration of Foreclosure Auctions by Census Tract for 2012 (click for a high resolution version).

 

Woodstock Institute also examined the accumulation of completed foreclosure auctions from 2008 to 2012 and found that, in 20 Chicago community areas, more than 1 in 10 mortgageable properties completed the foreclosure process. Mortgageable properties are owner-occupied properties or properties that can qualify for single-family mortgages. Notably high concentrations of foreclosure auctions include:

 

  • Grand Boulevard - 21.4 percent (836 of 3,912) of mortgageable properties completed foreclosure
  • Woodlawn - 18.5 percent (844 of 4,569) of mortgageable properties completed foreclosure
  • Englewood - 18.2 percent (1,276 of 7,022) of mortgageable properties completed foreclosure

 

"This concentration of foreclosure activity in low-wealth communities and communities of color poses serious barriers to recovery in areas that badly need help," said Cowan. "We need creative solutions, like the newly enacted Cook County Land Bank, to get vacant homes back to productive use."

The data on trends in foreclosure filings and auctions in 2012 show
that:

  • Foreclosure auction activity grew substantially throughout the Chicago region from 2011 to 2012. Across the Chicago region, there were 35,244 completed foreclosure auctions in 2012. This is a 73.8 percent increase from 2011, which saw 20,281 foreclosure auctions.
    • Sub-regions that experienced particularly high increases in foreclosure auctions year-over-year include DuPage County (up 128.7 percent), Lake County (up 116.1 percent), and McHenry County (up 101.9 percent). All parts of the region experienced increases in foreclosure auctions.
    • Municipalities with particularly high increases in completed foreclosure auctions from 2011 to 2012 include Naperville (up 194.8 percent), Zion (up 149.4 percent), and Waukegan (up 144 percent).
    • In the City of Chicago, auctions grew by 53.5 percent. Chicago community areas with high growth in completed foreclosures from 2011 to 2012 include Washington Heights (up 104.8 percent), Roseland (up 85.8 percent), and Irving Park (up 108 percent).
  • Completed foreclosure auctions in 2012 reached the highest level since the start of the housing crisis. The 35,244 auctions experienced in 2012 is the highest number of foreclosures the region has seen in a single year since 2008.
  • The rate of new foreclosure filings remained relatively stable across the region, but the growth trend in low-wealth communities noted in Woodstock’s previous report continues. In the Chicago six county region, new foreclosure filings in 2012 increased by only 2.9 percent over 2011’s high level of filing activity (up from 64,877 to 66,783). Significant increases in filings were seen in communities that experienced high levels of foreclosure in 2007-2008, but declines from 2009-2011. Filings also increased in outer-ring suburbs in Will and McHenry Counties.
    • South Cook County experienced the largest increase in new foreclosures from 2011 to 2012, growing by 13.7 percent from 2011 to 2012. Filings in Will County grew by 13 percent from 2011 to 2012 and filings in McHenry County grew by 8.1 percent over the same period.
    • Municipalities with large increases in new foreclosure filings from 2011 to 2012 include Matteson (up 71.5 percent), Plainfield (up 69.4 percent), and Romeoville (up 36.7 percent).
    • In the City of Chicago, filings declined by 1.4 percent overall. Community areas with significant growth in new foreclosure filings include Calumet Heights (up 47.1 percent), West Garfield Park (up 27.8 percent), and West Pullman (up 27.1 percent).

 

For more information, please contact Katie Buitrago at kbuitrago@woodstockinst.org or 312-368-0310.