Friday, April 8, 2016

Chicago Suburbs and the Slow Recovery from Foreclosure

As a recent article in the Chicago Tribune establishes, it has now been seven years since the “Great Recession,” which left individuals and families throughout Chicagoland with costly mortgages that many simply could not afford to pay. Given the financial difficulties of the first decades of the 2000s, many homes went into foreclosure, empty houses and properties in varying states of disrepair blighted neighborhoods throughout the state. According to recent news from RealtyTrac, for example, foreclosure filings reached all-time lows this year. Such numbers suggest that Illinois and the rest of the country truly are in a state of recovery after the housing crisis.
Are all neighborhoods in Chicago and its suburbs experiencing recovery from the foreclosure crisis, or have some places remained economically troubled? According to the Chicago Tribune article, there are still a number of Chicago suburbs that simply have not entered into a clear phase of housing recovery, and it is possible that such revival may never come—or at least in the near future.
Abandoned Homes Remain in Many of Chicago’s Suburbs
For certain neighborhoods, housing market recovery simply is not a phrase that has any meaning. Indeed, suburbs like Markham largely do not seem to be faring any better than they were at the lowest points of the housing crisis. For instance, the article cites one family’s home: a 900-square-foot modest house that has been “well-kept, with a neatly trimmed lawn and hedges, four bedrooms, and a two-car garage.” The family purchased the house in 2007—shortly before the housing crisis would sweep the country—for around $137,000. Now, their house is positioned just across the street from a home that has been abandoned for quite some time. And that property that once cost the family $137,000 was listed recently for only $29,500.
To put that number another way, the family may not even be able to sell their home for 20% of what they paid for it. As the article emphasizes, such poor resale values—even at a time in which much of the Chicago area as well as urban regions across the country have seen housing prices rise—do more than simply leave the homeowners underwater. As the article intimates, they “find themselves not so much underwater as buried in a cave beneath the ocean floor.” In other words, continuing to use the term “underwater” in suburbs like Markham is a drastic understatement.
Remaining Impact of the Recession and Resulting Economic Difficulties
For families like this, the economic difficulties associated with the recession remain palpable. For instance, in the example we gave above, the recession resulted in one of the primary earners of the family losing her job and that house—originally purchased for $137,000—going into the early stages of foreclosure. In order to avoid foreclosure, the family obtained a loan modification just a few years ago. However, including late fees and the new terms of the modification, they now owe around $180,000 for this house.
This story is one that is all-too-common among “predominantly African-American parts of the south suburbs and in pockets of mainly Latino and white ethnic suburbs just south of O’Hare International Airport,” where housing prices simply are not rising. These families, as the article suggests, have been “left behind by recovery,” and foreclosure remains a very real problem.
Do you have questions about avoiding foreclosure in the Chicago suburbs? An experienced Oak Park foreclosure defense lawyer can help. Contact the Emerson Law Firm to learn more about our services.

See Related Blog Posts:
Update on Distressed Homes in Chicago

1 comment:

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