Woodstock Institute Releases Foreclosure Report

For Immediate Release

Contact: Geoff Smith, Vice President (312) 427-8070

Woodstock Institute Releases Foreclosure Report:  Thirty-Five Percent of Mortgages in Foreclosure in 2007 Were Originated Just One Year Earlier, Concentrated Foreclosures Impact Borrowers and Suburban Cities
 

Foreclosures spiked in the last quarter of 2007 in nearly every community in the Chicago region, according to recently compiled statistics from Woodstock Institute.

The report shows that foreclosures filings continue to skyrocket across the region and are a serious problem in suburban areas that have not traditionally been associated with high foreclosure levels.

It is likely that foreclosures will continue to rise in 2008 as regional property values stagnate or decline; refinance options remain limited for homeowners with adjustable rate mortgages; and the monthly mortgage payments on many loans reset to higher levels. However, as foreclosures mount, many suburban communities may also be unable to manage the foreclosure glut.

“Many municipalities are being hit from both sides,” says Geoff Smith, Vice President of Woodstock Institute. “They see increased costs associated with dealing with foreclosed properties, but also see declining revenues from lost property, sales, and transfer tax revenues.”

The report’s findings show:

The number of properties with foreclosure filings has grown tremendously since 2005. The number of properties with foreclosure filings grew to 38,215 in 2007 which was an increase of nearly 32 percent from a previous high of 28,997 in 2006.  This is on the heels of a 36 percent increase between 2005 and 2006. Between 2005 and 2007, the number of properties with foreclosure filings in the region increased by nearly 80 percent.

Mortgages that went into foreclosure in 2007 were predominantly from loans originated since 2005. Over 35 percent of 2007 foreclosure filings were of mortgages originated in 2006. Nearly 28 percent of foreclosure filings were of mortgages originated in 2005. Perhaps most surprisingly, roughly 4.5 percent of 2007 foreclosed mortgages originated in 2007.

Suburban communities have seen the largest recent growth in foreclosure filings. North Cook County had the largest growth in properties with foreclosure filings with an increase of over 67 percent from 2006 to 2007 and of over 154 percent from 2005 to 2007. Other areas with substantial increases between 2006 and 2007 included Kane County, West Suburban Cook County, and DuPage County, all of which experienced increases greater than 40 percent in the number of properties with foreclosure filings. Between 2005 and 2007, the areas with the greatest increases included DuPage County, Northwest Suburban Cook County, and Kane County which all had the number of properties with foreclosure filings roughly double.

The fourth quarter of 2007 saw a tremendous spike in foreclosure filings. The number of properties with foreclosure filings jumped in the fourth quarter of 2007. There were increases of over 70 percent from the third quarter to the fourth quarter of 2007 and of over 52 percent from the fourth quarter of 2006 to the fourth quarter of 2007. 

South Suburban Cook County and the City of Chicago continue to have the highest levels of foreclosure. South Suburban Cook County had over 36 foreclosure filings per 1,000 mortgageable properties, a number over double the regional average of 16.8 filings per 1,000 mortgageable properties. The City of Chicago had 24.4 foreclosures per 1,000 mortgageable properties. 

Every region of the Chicago Six County area had communities with very high foreclosure levels. Areas outside the City of Chicago and South Cook County that have high levels of foreclosure filings per property include parts of Addison, Aurora, Bolingbrook, Carol Stream, Carpentersville, Fox Lake, Glendale Heights, Lake in the Hills, Lombard, Palatine, Plainfield, Romeoville, Round Lake Beach, and Zion.

Chicago area foreclosures remain largely concentrated in highly minority communities. Highly minority census tracts had 41.6 foreclosure filings per 1,000 mortgageable properties. By comparison, census tracts that are less than 10 percent minority had eight foreclosure filings per 1,000 mortgageable properties. Additionally, highly minority neighborhoods accounted for 34.5 percent of all foreclosure filings in the Chicago Six County region in 2007. These communities account for less than 14 percent of all 2007 estimated mortgageable properties.

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