Rise in the Number of Homes in Chicago Foreclosure List
May 12th, 2009 by 
Joseph Smith
The foreclosure list in Chicago, Illinois is registering a dramatic increase in the number of houses in the first quarter of 2009. And this time, subprime mortgage has nothing to do with the flood of foreclosed properties in the market. The culprit: job loss which is driving foreclosure filings in Chicago suburbs.
In the first three months of this year, foreclosure cases filed rose from 25 percent to 70 percent compared with figures in the last quarter of 2008. Data released by housing advocacy group Woodstock Institute showed foreclosure increases in counties of Will, McHenry, DuPage, Kane and Lake.
Meanwhile, foreclosure filings in Chicago metropolitan area increased by 6 percent to 17,819, the highest quarterly total since the foreclosure crisis started in the second half of 2006.
Woodstock Vice President of research Geoff Smith explained that subprime lending has ceased to be the key reason for mortgage defaults. Homeowners are now defaulting on their mortgages due to job losses and recession.
During the subprime mortgage crisis, foreclosure homes were mostly seen in poor city neighborhoods which were targeted by lenders giving out loans with high interest rates. However, the latest round of foreclosures is starting to emerge in middle-class neighborhoods where most homeowners took out standard-rate mortgages.
Industry experts believed that the number of houses in the foreclosure lists in Chicago suburbs will continue to rise if the unemployment problem remains unchecked. And unabated foreclosures mean further pressure on real estate values in the Chicago metropolitan area.
Furthermore, a rising foreclosure rate will force Chicago suburban neighborhoods to endure abandoned and vacant homes and dislocated families.
Realtor Association of the Fox Valley President Donna McQuade said that the foreclosure problem in Chicago has remained unchecked for some time. She believed that this time, residents and officials have no choice but respond to the problem.
Data released showed that one in every five houses in foreclosure list is a short sale. According to Realtor Association, short selling indicates that the home seller owes the lender more than the worth of his distressed property.
Meanwhile, housing counselors have noticed a change in their clients. They said that they are now advising distressed homeowners who lost their income or jobs and have not been in any financial trouble until recently.
And as the number of repo properties in Illinois foreclosure list continue to increase, so is the caseloads in housing counseling agencies.
