For quite some time now, the monthly rates of foreclosure in the Chicago area have shown a general decline. However, according to a recent article in HousingWire, October 2016 saw a substantial jump in the number of foreclosures reported that month. The number rose by 30%, meaning that October of this year showed the “largest monthly increase since August 2007.” If you think more carefully about what that means, the number suggests that foreclosure numbers are looking more akin to those around the time of the housing market crash.
How did foreclosures rise so dramatically in just a single month? And is there actually reason for concern, or are there other explanations for the sharp increase in foreclosure rates?
Are We at the Beginning of a New Foreclosure Crisis in America?
Many consumers might be asking an obvious question about the recently released data: Are we at the beginning of a new foreclosure crisis in America? Generally speaking, experts suggest that it is not yet time to worry. The data cited in the article, which comes from an ATTOM Data Solutions Foreclosure Market Report, indicates that more than 105,000 foreclosure filings, default notices, bank repossessions, and/or bank auctions occurred this October. Yet this number, when we look at what it does to annual percentages, still puts the country at a rate of foreclosure that is around 8% lower than it was at this same time in 2015.
As Daren Blomquist, the senior vice president for ATTOM Data Solutions, explained, “[t]he increase in October isn’t enough evidence to indicate a new foreclosure crisis emerging in these states, but it certainly demonstrates that this housing recovery is not completely devoid of risk.” The states with particularly high rates of foreclosure last month did not include Illinois. To be sure, those listed in the article include Arizona, Colorado, and Georgia.
However, Illinois does come up when we begin talking about the highest foreclosure rates in general (and not only in October). Then, Illinois ranks fourth in the nation, with one foreclosure for every 704 units. It comes in behind only Delaware (with one out of every 355 units in foreclosure), New Jersey (one out of every 564 units in foreclosure), and Maryland (with one out of every 679 units in foreclosure). After Illinois, South Carolina ranks fifth, and experts suggest that Florida likely will make this undesirable list in the near future.
Post-2009 Loans Leading to Foreclosure
Are the new foreclosures connected to older home loans, or are they indicators that more Americans are having trouble affording their mortgages shortly after they obtain them? By and large, the article suggests, recent foreclosure activity is “more heavily tied to loans originated since 2009—after most of the risky lending fueling the last housing boom had stopped.”
What kinds of loans are going into foreclosure? Most commonly, borrowers who have obtained FHA and VA loans that have low down payments seem to be more likely to be at risk of foreclosure than other homebuyers. To be sure, “FHA and VA loans combined represent 49% of all active foreclosure inventory for loans originated in the seven years ending in 2015.”
If you have questions about protecting your home from foreclosure, an experienced Oak Park foreclosure defense lawyer can answer your questions today. Contact the Emerson Law Firm today to discuss your case.
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