Despite government interventions, foreclosures continue to climb in Chicago region

New foreclosure filings in the Chicago six county region rose 21 percent from 2008 to 2009 despite federal, state, and local programs designed to curb the foreclosure crisis, says a new Woodstock Institute report. During the fourth quarter of 2009, the region saw 24,053 new foreclosure filings—the highest quarterly number observed since 2005.

The report, which is entitled “Government Interventions Have a Limited Impact on Chicago Area Foreclosure Activity” and is based on analyses of foreclosure filing and auction activity in 2009, found a shift in new foreclosure filings from regions with previously high rates, such as the City of Chicago and South Cook County, to the suburban counties. The fastest growth was seen in North and Northwest Cook County and Kane County, which saw increases in new filings between 40 and 48 percent from 2008 to 2009. In contrast, new filings in Chicago grew by a relatively modest ten percent and decreased in South Cook County by six percent over the same period.  Within the City of Chicago, 25 community areas saw year over year declines.  Most notably Woodlawn, West Pullman, and Englewood saw declines between 25.9 and 23.8 percent from 2008.

“While some areas that have been hit hard by foreclosures for many years saw declines in the number of new foreclosure filings in 2009, it is not clear that these declines were the result of federal, state, and local interventions but instead the dwindling number of mortgages in these communities upon which lenders can foreclose,” says Geoff Smith, Senior Vice President of Woodstock Institute.

Changes in completed foreclosure auctions differed geographically along a similar pattern. Auctions in Kane County increased by 57 percent, while Chicago and South Cook County again saw the biggest decreases—auctions declined by 11 and 24 percent, respectively.

Declines in filings and auctions do not signal an end to the foreclosure crisis in City of Chicago and South Cook County. In Chicago, filings on condominiums increased by 36 percent between 2008 and 2009, composing 24 percent of all new filings in 2009. South Cook County and Chicago still have the highest numbers of foreclosure auctions ending in lender ownership, with 17.2 and 15.8 auctions per 1,000 properties compared to the six-county average of 10.7 auctions per 1,000 properties. This means that in 2009, 1.7 and 1.6 percent of all properties in South Cook and Chicago became lender-owned.

“With more and more homeowners becoming unemployed or owing more on their mortgage than their home is worth, foreclosures are likely to continue to be high in 2010,” says Smith. “And while new growth in filings and auctions will be seen in middle- and upper-income areas, the accumulated impact of the foreclosure crisis in lower-income communities will likely take years to turn around.”

 

Tags: