According to a recent feature story in the Chicago Tribune, the number of homes in the foreclosure process rose 20 percent in November in Cook County when compared to one month earlier. The Tribune said that much of this increase stemmed from a jump of 57 percent in the number of homes in the county that were sent to court-ordered auctions.

Citing data from online foreclosure company RealtyTrac, the Tribune reported that foreclosure filings were reported on more than 224,000 properties across the United States in November. That’s a drop of 3 percent from October.

No matter how you look at the numbers there are too many housing foreclosures in Chicago and the United States. This is unfortunate because foreclosure has such a devastating effect on families.

If you’re struggling to pay your mortgage bills each month, call your mortgage lender immediately. The sooner you call your lender, the better your chances of working out a new payment arrangement, a reduction in your mortgage loan’s interest rate or some other way to avoid losing your home through foreclosure.

I understand that this is no easy thing, calling your mortgage lender and explaining that you’re struggling to pay your monthly housing bills. But lenders will often work with you to find some solution to your mortgage woes.

Foreclosures remain the number-one deterrent to a housing market rebound, both in Chicago and across the nation. Foreclosures make it more difficult for sellers to get the prices they want for their homes. Buyers would rather pay $50,000 less for a similar home down the street that’s gone through the foreclosure process.

If you don’t want to become the latest foreclosure statistic, call your lender. Ignoring your mortgage problems won’t help them go away.

Think of it this way: Buyers are more than happy to spend $50,000 less on a foreclosed home or a short sale that sits three doors down from sellers trying to sell their similar residence the traditional way. Simply put, distressed homes sell for less, driving down the value of surrounding residences.

The Chicago Sun-Times, though, recently ran a feature story on an interesting new trend regarding foreclosure properties: According to the story, more of them are becoming rentals.

According to the Sun-Times story, more than one in 10 Chicago houses is now vacant. To help fill these empty spaces, the city and several nonprofit agencies are renting out a growing number of these properties. These groups are also offering buyers financial incentives to purchase these properties.

The Sun-Times story cites the efforts of the Neighborhood Stabilization Program run by the city and Mercy Portfolio Services. The program has received $169 million from the federal government in Recovery Act dollars, and so far has used some of these funds to pay for 51 demolitions and the purchase of 161 residential properties. The purchases are the interesting part of the equation: The residential properties total 819 housing units in 22 different Chicago neighborhoods. The Sun-Times reports that 75 percent of these housing units are for rent.

Foreclosures will continue to glut the Chicago housing market for years to come. There are just too many distressed properties on the market today. It’s good to see, though, the city and nonprofit agencies working together on creative ways in which to deal with them.

No one program will completely ease the burden that foreclosures and short sales place on the Chicago housing market. But the more programs that do attack this problem, the better.

This month, though, RealtyTrac actually brought some good news for Chicago: The number of housing foreclosures in Illinois fell in May, according to the company.

Residential foreclosures dropped more than 20 percent in May when compared with April, according to RealtyTrac. This means that slightly more than 15,000 state housing units, or one in every 350, received a foreclosure notice in the month.

A foreclosure notice, by the way, doesn’t have to be an actual foreclosure. It could be a bank notice, scheduled auction or bank repossession.

Granted, this is still far too many foreclosures. But Illinois saw a bigger drop in foreclosures than did the country as a whole. RealtyTrac.com reported that the United States in general saw a 3 percent drop in housing foreclosures in May.

Overall, though, Illinois housing foreclosures were still up 38 percent from where they stood in May of 2009. And across the country, one in every 400 homes – nearly 323,000 households – received foreclosure notices in May. That’s up 0.5 percent from the same month one year earlier.

I’m happy to see the foreclosure numbers go down. Few things hurt the overall economy of an area, whether it’s Chicago or the entire country, like housing foreclosures. Think about it: When a family loses its house that family is obviously devastated, both emotionally and financially. A housing foreclosure stays on the credit reports of former homeowners for seven years, making it extremely difficult for these consumers to borrow money at reasonable rates during this time.

But housing foreclosures also burden banks and lenders. These financial institutions don’t want to take back these homes. That’s not how they make their money. They don’t want to have to sell these homes at lower prices.

Finally, foreclosures hurt neighborhoods, too. It’s difficult for sellers to attract good offers for their residences when there’s a foreclosure two doors down going for $50,000 less.

So let’s hope that RealtyTrac’s latest bit of good news isn’t a blip. Let’s hope it’s a trend, one that will help the housing market and the economy recover at a faster pace.

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But don’t let your fears of foreclosure override your common sense: If an outside company calls you and promises that it can rescue you from foreclosure, hang up the phone. The odds are good it’s either a scammer or a company that will charge you a significant amount of money for something that you can do on your own for free.

The Web site of the Illinois Association of REALTORS® recently posted a story from the Better Business Bureau branch that serves Chicago and Northern Illinois warning homeowners of a growing number of foreclosure-related scam artists. Foreclosure information is accessible to the public. This has led to big business among companies claiming to offer foreclosure-prevention services.

The scam works like this: An individual or company contacts homeowners whose homes are facing foreclosure. They’ll promise to either negotiate a mortgage loan modification or stop the foreclosure. Of course, they’ll require a hefty fee for their service.

Some of these callers will take the money from desperate homeowners and then do absolutely nothing. Even those companies that do perform foreclosure-prevention services don’t actually do anything that homeowners can’t do on their own for free.

If you’re facing foreclosure, or even if you’re worried that you might fall behind on your mortgage payments, you should always call your mortgage lender directly. Don’t work with an outside company. Call your lender, explain your financial situation and ask for help.

Remember, mortgage lenders and banks don’t want your home to fall into foreclosure. They don’t want to try to sell your residence. That’s not their business. The odds are good that your lender will try to work something out to prevent you from losing your home.

If you work with an outside foreclosure-prevention company? You’ll just be throwing more money away.

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But you might be surprised to learn that the foreclosure crisis has actually impacted renters in Chicago more than it has city homeowners. The Chicago Sun-Times recently wrote a story about this surprising situation, quoting a report from the Lawyers’ Committee for Better Housing that more than 125 multi-family buildings in Chicago fell into foreclosure each week in 2009.

The Lawyers’ Committee report said that 20,691 rental units were impacted by foreclosure in 2009. For the year, Chicago saw 6,560 multi-family building foreclosures. That’s more than the 4,000 single-family homes and condominiums that fell into foreclosure during the same year.

Foreclosure can be a nightmare for renters, too. We’ve all read news stories highlighting landlords who fail to tell their renters that they’ve fallen behind in their mortgage payments. When the building falls into foreclosure, these renters suddenly have no place to live. Imagine that shock: One morning you wake up with a roof over your head. The next, your home is yanked away through no fault of your own.

And that is just part of the problem that renters often face when their landlords lose their buildings to foreclosure. The Sun-Times story says that some landlords begin to neglect their buildings once they fear that they are in danger of foreclosure. The tenants of these buildings, of course, are the ones who suffer when landlords avoid fixing the lights in common areas, keeping the lawns trimmed or fixing broken windows. Many lenders won’t take responsibility for the upkeep of these buildings, either.

The Sun-Times story is an interesting one. We’ve all become accustomed to thinking of foreclosures as a problem for homeowners. But the story shows that in Chicago, as in the rest of the nation, foreclosure really is everyone’s problem. And until the housing foreclosure rate in the country drops, you can’t expect housing prices to fully rebound from the residential slump.

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According to a recent report by the Woodstock Institute, more homeowners in the Chicago area lost their residences to foreclosure in the first three months of this year than they had in any quarter during the last five years.

The Chicago Tribune covered this news late last week. And, yes, reading the story was a depressing experience.

That’s because foreclosures don’t help anyone. A family is out of their home. A bank or lender is stuck with a property it’d rather not have to sell. And neighborhood housing values take a hit. These are the three big effects of housing foreclosures.

According to the Tribune story, 9,302 homes went through a court-ordered auction in the six-county Chicago region during the first quarter of this year. This is significant because auctions are the last step in the foreclosure process. Of the homes that reached this step, lenders took back 95 percent.

In the city of Chicago itself, nearly 3,500 homes went to auction. Lenders again took back 95 percent of these residences.

The foreclosure numbers are depressing, but they shouldn’t be surprising. The recession hit Chicago, as it did most cities in the country, hard. Unemployment here stood at a far-too-high 11.5 percent in March, above the national average. When people are out of work, or when they see their annual incomes slashed, they struggle to pay their mortgage bills. Eventually they default on their loans, entering the foreclosure process.

There is hope for homeowners, though. If you are struggling to pay your mortgage each month immediately call your lender or bank. Tell a mortgage specialist there that you are struggling to make your payments and that you fear you’ll soon start falling behind. Remember, your bank doesn’t want you to lose your house to foreclosure. It should be motivated to do something – such as lowering your loan’s interest rate or lengthening its terms – to make your mortgage payment more affordable.

The worst thing you can do, and the one thing that will certainly add you to the soaring number of Chicago homeowners facing foreclosure, is to do nothing. You can’t hide from foreclosure; you need to call your lender.

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A local real estate company reported that distressed properties accounted for at least 34 percent of home sales reported in the Chicago area in 2009.

This continues a trend that started in late 2007. And it’s not one unique to Chicago. As the nation’s economy began to falter, a growing number of homeowners lost their jobs or saw their annual incomes plummet. Many of these homeowners suddenly began struggling to make their mortgage payments for the first time in their lives.

In 2009, U.S. households received 2.8 million foreclosure filings, according to online real estate data company RealtyTrac. This figure represents an all-time high for the country.

It’s little surprise, then, that so many of the Chicago area’s housing sales last year were of foreclosed and distressed properties. Fortunately, there is help for homeowners who are struggling to pay their mortgage bills. The federal government in 2009 launched its Home Affordable Modification Program, which provides financial incentives to encourage mortgage lenders and banks to somehow lower the monthly mortgage payments of struggling homeowners.

If you are having difficulty making your mortgage payments, call your mortgage lender immediately. Even if your lender isn’t participating in the federal program, it might still be willing to modify your mortgage loan. After all, your lender does not benefit from seeing you lose your home to foreclosure.

I’m glad that home sales seem to be rising steadily these days. But I’ll be even happier when a much smaller percentage of these sales comes from distressed properties.

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That’s a rather depressing record. And the odds are good that 2010 will see a high number of housing foreclosures, too. The economy isn’t improving fast enough and unemployment isn’t falling. That combination leads to a growing number of homeowners struggling to make their once-affordable mortgage payments.

According to foreclosure data firm RealtyTrac, a record 2.82 million U.S. residential properties received at least one foreclosure filing in 2009. The report also showed that one in 45 housing units received a foreclosure filing during the year. That’s equal to 2.21 percent of all U.S. housing units, up from 1.84 percent in 2008 and 1.03 percent in 2007.

The news was especially dismal in our home state of Illinois. According to RealtyTrac, a total of 131,132 Illinois properties received a foreclosure filing during the year. This means that Illinois ranked fourth in the number of filings. The state saw 32 percent more foreclosure filings last year than it did in 2008.

According to a story in the Chicago Sun-Times, the number of housing foreclosure filings in the Chicago area last year hit 119,662, up 33 percent from 2008. One in every 31 homes in the Chicago area received a foreclosure filing in 2009, according to RealtyTrac.

If you’re having difficulty making your mortgage payments, don’t hesitate; immediately call your mortgage lender. Remember, the federal government, as part of its Home Affordable Modification Program, is offering lenders and banks financial incentives to lower the monthly mortgage payments of struggling homeowners.

Tell your lender that you can no longer afford your mortgage payments. Your lender might be willing to lower your loan’s interest rate, reduce its principal balance or restructure its terms, all efforts that will lower your monthly payment and, hopefully, keep you from losing your home to foreclosure.

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White wrote that not only is such a move in the financial best interest of these homeowners, but that owners who do this are not acting immorally.

White writes that mortgage lenders and banks deserve a large share of the blame for the high housing foreclosure numbers across the country. These lenders were lax, he said, approving borrowers for too much money and passing out mortgage loans to consumers who were not financially fit to take on any mortgage loan. This helped cause the housing crisis, White argues, and led to plummeting home values across the country.

Not surprisingly, the Los Angeles Times story also quotes mortgage-industry officials who argue that walking away from a mortgage is an immoral act.

Personally, I find White’s message to be disturbing. Homeowners have a responsibility to do everything they can to pay their mortgage bills, even if they owe more on their loans than what their homes are worth. And, yes, lenders did approve some questionable mortgage loans during the heights of the housing boom. But no one forced homeowners to take out any of these loans. Don’t homeowners bear responsibility for their own actions, too?

Here’s what happens when homeowners simply walk away from their mortgage loans and abandon a house: They help drag down housing values in the rest of their former neighborhood. Sellers struggle to sell their homes for a good price when foreclosed properties are often offered for so little just two or three doors down. Foreclosed properties can also become neighborhood eyesores.

Besides, just because a home is worth less than what its owners owe today, that doesn’t mean the situation won’t change in a year or two. Home prices have traditionally risen over the long haul. Owners who hang onto their properties for seven or 10 years or longer will typically see their housing values increase. The odds are good that they’ll still see a good price should they sell after keeping their property for a long enough time.

What White is suggesting is morally offensive, no matter how he couches his argument. Homeowners have a responsibility to pay off their mortgage loans. If they are struggling to make their payments because of a hardship – the loss of a job or a serious illness, for example – they should call their mortgage lenders. The lender might be able to work out a loan modification designed to help homeowners stay away from foreclosure.

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That’s why the president and his administration worked together to create the Making Home Affordable program. The program encourages mortgage lenders, through financial incentives, to work with homeowners to keep them from losing their residences to foreclosure. Lenders will often modify the mortgage loans of homeowners who are struggling to make their payments each month. Modification may entail lowering the loan’s interest rate, stretching out its term or simply lowering the amount of principal owed. In each case, the homeowner’s monthly mortgage payment would go down.

According to a story in the Chicago Tribune, about 36,000 local homeowners have received some type of permanent or temporary loan modification as of the end of November. This ranks the Chicago area as one of the busiest sites of Obama’s loan-modification program goes.

Not everyone’s happy with the Obama program, though. Many critics point out that the program hasn’t been helping homeowners as quickly as the government pointed out. Many banks participating in the program haven’t modified nearly as many loans as government officials were hoping.

This is to be expected with any new program as complex as the loan-modification plan. Hopefully, the kinks will be worked out and more homeowners, in Chicago and nationally, will modify their mortgage loans. This is far better than letting these homeowners lose their homes to foreclosure.

And if the government doesn’t step in, that’s what will happen. A new report from First American CoreLogic proves it: This report, issued earlier this month, said that 9.41 percent of mortgage loans in the Chicago area were 90 days or more delinquent in October. This same rate stood at 5.02 percent just one year earlier.

I know many of you aren’t happy that the government is helping struggling homeowners. Yes, some of these homeowners did stretch themselves financially to get into homes that they could not afford. But many more are facing foreclosure because they lost their jobs or suffered a serious illness. This economic slump has shown us how easy it is to have the financial rug pulled out from under you. Simply put, I support any measure that slows the rate of housing foreclosures and in turn, help the market recover.  This recovery benefits everybody in much the same way that foreclosure are a detriment to everybody.

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