Archive for the 'Foreclosures' Category
Chicago Foreclosures Show No Sign of Slowing
May 3rd, 2010 categories: Economic Recovery, Foreclosures, Housing Market
The Chicago area has been particularly hard hit by housing foreclosures lately. And the numbers indicate that this trend is far from over.
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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High Percentage of Chicago-Area Home Sales Were Distressed Properties in 2009
March 1st, 2010 categories: Chicago Info/News, Chicago Neighborhoods, Economic Recovery, Foreclosures, Housing Market
The good news about 2009 is that housing sales began rising again in Chicago during much of the second half of the year. The bad news? A large portion of these home sales in the Chicago region last year were of the distressed variety.
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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Nation Sets Depressing Record: Housing Foreclosures Hit All-Time High
January 22nd, 2010 categories: Economic Recovery, Foreclosures, Housing Market, Real Estate News
The odds aren’t that small that you know someone who received a housing foreclosure filing in 2009. That’s because the United States saw more housing foreclosures in 2009 than it has in any other year.
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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Underwater? Is It Ethical To Walk Away From Your Mortgage?
January 4th, 2010 categories: Economic Recovery, For Homeowners, Foreclosures, Housing Market, Mortgage Info, Real Estate News
Sometimes I’m amazed at what I read in the newspapers. In late November, the Los Angeles Times reported on a white paper written by a law professor at the University of Arizona – Brent T. White. This professor actually argued that homeowners who owe more on their mortgage loans than what their homes are worth should walk away from their loans.
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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Chicago Near The Top In Obama Loan Modifications
December 18th, 2009 categories: Chicago Info/News, Chicago Neighborhoods, Economic Recovery, For Buyers, For Homeowners, For Sellers, Foreclosures, Housing Market
Ever since taking office, Pres. Obama has made slowing the rate of housing foreclosures one of his top priorities. This makes sense: Housing foreclosures drag down housing prices. They become neighborhood eyesores. And until the number of foreclosures falls to normal levels, the housing market won’t truly rebound.
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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