From the President: Let’s Not Lose Sight of Affordable Housing Goals When Reforming Housing Finance

Written by Dory Rand on February 22, 2011 - 11:03am

As a deregulatory philosophy took hold of Washington in the early 2000s, prudent supervision of the mortgage market broke down. Predatory loan products edged out sustainable ones in low-wealth communities, presaging the foreclosure crisis that destroyed billions of dollars of equity. As private securitizers took on more and more risk, Fannie Mae and Freddie Mac lost sight of their mission and engaged in a destructive race to the bottom.

Chicago region foreclosures continue to rise in 2010, despite year-end “robo-signing” moratoria

The data show that:

Growth in new foreclosure filing activity continues to be concentrated in the region’s middle- and upper-income urban and suburban communities.

Counties with the greatest increases in new foreclosure filings between 2009 and 2010 include McHenry County (33 percent increase) and Will County (21.4 percent).

Data show that aggressive modifications have brighter futures, while Chicago trial mods see nascent growth: December HAMP Analysis

Permanent modifications are continuing to grow slowly, and the increase in trial modifications marks first time trial modifications have grown in the region in eight months. Chicago region permanent loan modifications rose by 3.58 percent from November to December, compared to 3.12 percent growth from September to October and 4.73 percent growth from October to November (see charts A and B).

What people are saying about troubled foreclosures

Here’s a sampling of the commentary and proposals generated by the report:

The impact of troubled foreclosed homes

“The city's Roseland neighborhood, on the city's far South Side, is one example. In 2007, some of the pictures of the homes taken by the Cook County assessor's office showed properties that were reasonably well cared for by homeowners.

Left Behind: Troubled Foreclosed Properties and Servicer Accountability in Chicago

It identifies a group of “red flag” properties which are troubled vacant properties where a foreclosure has been filed, but no outcome has been reached.  The report also identifies a group of lender-owned, foreclosed properties that are most likely vacant and not in compliance with the City of Chicago’s vacant building regulations. The report ends with policy recommendations to address problems associated with troubled, vacant foreclosures.

Left behind: Lender walkaways amplify negative effects of foreclosure in hardest-hit neighborhoods

When a loan becomes seriously delinquent, the loan servicer may conduct an analysis to see whether it would be more beneficial to proceed with a foreclosure or not. Why wouldn’t a servicer want to complete a foreclosure? One reason could be that the home has a very low value and the costs associated with pursuing the foreclosure and maintaining the home until it can be sold to a new owner may be more than the proceeds a servicer might get from selling the property.


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