For the past years, foreclosures properties were a problem plaguing inner cities in Illinois, mostly in low-income neighborhoods. But this year showed a worsening trend as foreclosures spread to middle-class communities in suburban areas.
Industry experts attributed the unabated spread of foreclosures not just in Illinois but across the country to the growing unemployment rate. In October, about 200,000 people lost their jobs, the smallest monthly unemployment figures for the year.
Experts said that if people lost their source of income, it follows that they could not afford to pay their utilities and mortgages, thus resulting to more foreclosure properties. But unlike the first wave of foreclosure which was caused by bad lending practices, the current crop of foreclosures involved borrowers who could afford to pay their mortgages if not for some mitigating circumstances which left them with no choice but to miss on their mortgage payments.
Industry experts said that Illinois is not the only place in the country that is seeing the unemployment crisis pushing the foreclosure problem to spread to the suburban areas. They said that most inner city foreclosures involved borrowers stuck with predatory loans. With suburban foreclosures, distressed borrowers have mostly lost their jobs.
Recent market data showed that foreclosure rates in Illinois jumped in the third quarter. About 1,692 houses were in some kind of foreclosure proceedings in Lake County from July to September, representing an 83 percent increase. In DuPage County, nearly 1,831 homeowners received a foreclosure filing, a 67 percent rise from the same period last year. In Will County, foreclosure filings hit 1,780, a jump of 54 percent from same period last year.
Industry analysts said that the foreclosure crisis will continue to soar until such time that the economy recovers and majority of people were given back their jobs. They said that it is logical to associate the growing unemployment rate to the rising foreclosures because people would not want to lose their American dreams if only they have the means to hold on to them.
Meanwhile, the federal government has been trying to control the spread of foreclosures by offering various programs designed to help distressed homeowners save their properties from foreclosures. These programs include the loan modification and refinancing.
But industry experts said that no matter how affordable the housing rates are, if people do not have jobs to allow them to keep paying their mortgages, many would still end up with foreclosure properties.
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