Archive for the 'Foreclosures' Category
Foreclosures fall in Illinois
June 17th, 2010 categories: Chicago Real Estate News, Economic Recovery, Foreclosures, Housing Market
RealtyTrac.com has been the bearer of bad news lately. The online foreclosure data site has each month during the housing slump, it seems, provided us with the news that housing foreclosures are steadily rising.
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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Beware of Foreclosure Scams
May 17th, 2010 categories: Economic Recovery, For Homeowners, Foreclosures, Housing Market
It’s easy to panic when you’re falling behind on your mortgage payments. No one wants to lose a home to foreclosure. It’s a frightening thought.
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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Foreclosures Don’t Only Impact Homeowners
May 10th, 2010 categories: Chicago Info/News, Economic Recovery, Foreclosures, Housing Market, Renting in Chicago
When you think of residential foreclosures, it’s natural to think of families thrown out of their homes. It’s not a pleasant picture.
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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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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