Is foreclosure activity in Chicago on the rise again? According to a recent article in ChicagoNow, mortgage defaults in the Chicago area have now hit a two-year high. What does this mean for the real estate market? Do these numbers signal a renewed issue with foreclosures in Illinois? Sometimes it can be difficult to identify a single factor that is contributing most significantly to foreclosure rates in different parts of the country. While we may not be able to say with certainty what is causing new foreclosure activity in the Chicago area, the recent trend appears to be problematic. What else should you know about Illinois foreclosures?
Remaining Foreclosures in Chicago
As the article points out, we have known for quite some time that there are remaining foreclosed homes around Chicago and its suburbs. As such, when we see continued high rates of foreclosure auctions and bank repossessions, this does not necessarily point to new foreclosures. Rather, these numbers frequently signal that homes that were previously abandoned, or with untenable underwater mortgages, simply are in the process of being resolved. When foreclosures are being resolved—for instance, are being auctioned and sold—that is generally a good thing for the region.
What is the problem? New foreclosures going into the “foreclosure pipeline,” as the article describes it. In other words, there are mortgages out there for which homeowners are having difficulty making payments, and those homes are just now entering the foreclosure process. While the total of all homes in Chicago that are at various stages of the “foreclosure pipeline” actually reached a new low recently, the article intimates that we need to be concerned and vigilant about new foreclosures in the area. While even the rate of new foreclosures had been on the decline, it recently “regained momentum.”
Urban Areas Having More Difficult Bouncing Back from Recessions
As a report in The Global Dispatch explains, it may not be all that surprising that foreclosed properties remain in the Chicago market, and that new foreclosures are not at record lows. In total, as of February 2017, the number of single-family homes at any stage of foreclosure in the Chicago area reached an 11-year low.
However, as that report notes, there are still millions of homeowners in Chicago who are dealing with “pre-crisis subprime mortgages.” In other words, many homeowners in Chicago were able to buy homes prior to the foreclosure crisis through subprime mortgages. Millions of those homeowners’ properties did not go into foreclosure during the peak of the crisis or immediately afterward. Now, around three million homeowners in Chicago still have subprime mortgages, and those loans are just beginning to catch up with them. As a result, many of those homeowners are just now dealing with the threat of foreclosure.
Chicago was among the “hardest-hit cities” in the foreclosure crisis, and millions of foreclosures resulted from subprime mortgages. So, it should not come as a complete surprise that many homeowners in the city are still dealing with subprime mortgages and trying to find a way to keep their homes.
Contact an Oak Park Foreclosure Defense Lawyer
There are many ways an Oak Park foreclosure defense lawyer can help if you are dealing with a subprime mortgage or are trying to avoid foreclosure. Contact the Emerson Law Firm to learn more about how we can help.
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