Foreclosures Down Nationwide, But Not in Illinois

Each month, consumers across the country encounter news about the continuing decline of foreclosures. While such news typically suggests a stronger economy than in the years immediately following the foreclosure crisis, the state of Illinois has not yet fully bounced back. Or, at least, it remains among the hardest-hit states for foreclosure activity. According to a recent report from DSNews.com, an April 2017 Foreclosure Market report from ATTOM Data Solutions indicated that foreclosures nationwide have “now reached their lowest point since late 2005,” yet that decline is not as evident in Illinois.

Declining Foreclosure Rates Across the Country

In general, foreclosure rates continue to decline. As the recent report explains, foreclosure rates were down 23% from April 2016, meaning that foreclosure rates are actually at the lowest they have been since 2005. In total, there were just over 77,000 foreclosure filings in April 2017. This number “includes all default notices, bank repossessions, and scheduled auctions.” To put that number another way, around one out of every 1,723 homes (or about 0.06 percent) was in foreclosure last month. Less than 1% of all homes nationwide were in some state of foreclosure as of the end of the month.

However, not all states have equally low foreclosure rates. Indeed, the low number we cited above is a nationwide average, which includes states where foreclosure rates are even lower than the figure we mentioned, as well as those in which the foreclosure rates may be significantly higher. Unfortunately, Illinois is a state that falls into the latter grouping.

Illinois Has Fifth-Highest Foreclosure Rate in the Country

When it comes to states that are still dealing with high rates of foreclosure, Illinois is not the worst among them. At the same time, however, the report notes that it has the fifth-highest foreclosure rate in the country. Here are the numbers for the states that made the “top five” in terms of foreclosure activity:

• New Jersey’s Atlantic City metro area (1 out of every 237 homes in foreclosure);
• Delaware (1 out of every 706 homes in foreclosure);
• Maryland (1 out of every 776 homes in foreclosure);
• Connecticut (1 out of every 956 homes in foreclosure); and
• Illinois (1 out of every 1,083 homes in foreclosure).

Some other notable cities with high foreclosure rates were Fayetteville, North Carolina, Trenton, New Jersey, Rockford, Illinois, and Philadelphia, Pennsylvania. Are these numbers really a reason to worry? When you look at the total number of homes in foreclosure in Illinois, 1 out of every 1,083 sounds bad. However, when we think about he percentage (about 0.09%), that number does not seem so high. The good news is that, when it comes to repeat foreclosures, the Chicago area is not mentioned as one of the regions with a high rate.

Contact an Oak Park Foreclosure Defense Lawyer

Given that Chicago foreclosure rates remain high compared to other states across the country, it is important to learn more about avoiding foreclosure if you are behind in mortgage payments. An experienced foreclosure defense attorney in Oak Park can help. Contact the Emerson Law Firm today to learn more about how we can assist you.

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Foreclosure Inventory Remains Above Normal Levels

Have we really recovered from the economic downturn if there are still a higher-than-average number of foreclosures lurking in Chicago neighborhoods? According to a recent article from DSNews.com, the foreclosure inventory across the country remains at “more than double” the normal level of foreclosures we would expect to see.

Foreclosures on the Decline, But Numbers Remain High

Over the last several years, the number of foreclosures across the country has declined substantially. Yet according to the article, the rate of foreclosure inventory (or the “percentage of residential properties that were in some state of foreclosure”) is more than two times what it was before the recession. As of the end of September, nearly 740,000 properties were listed as being in pre-foreclosure inventory. While that number represents a decline by more than 200,000 properties at this same time last year, the total nonetheless is higher than most commentators would like to see. In total, homes in some state of foreclosure account for almost 1.5% of “all residential mortgages nationwide.”

While the rate of foreclosure has declined in significant ways of the last three or four years, consumer advocates would like to see a lower number of properties classified as part of the pre-sale foreclosure inventory. The reported numbers do not mean that we are not handling the foreclosure crisis and its aftermath in a useful manner. Many states, including Illinois, have been lowering the total properties in foreclosure throughout the year. But we may still have a long way to go before we see the foreclosure inventory numbers that were typical before the housing market crash.

Who is Buying Houses After the Foreclosure Crisis?

Throughout Illinois and across the U.S., courts carry on with foreclosures. As homeowners continue to face the repercussions of being unable to make mortgage payments (including hits to their credit reports), a recent report from Black Knight Financial Services reported that high-credit borrowers seem to be the ones making a serious impact on the housing market. Based on the buying patterns of high-credit borrowers, “it would appear that the market is experiencing a vibrant recovery.” Yet the conclusion is not so simple.

In the last three years, “only 20% of purchase loans . . . involved borrowers with credit scores of less than 700,” which is “the lowest level for that segment in over 10 years.” The disproportionate buying of homes does not stop there. The current average credit score for new homebuyers is 755, which is a “record high.” To put that another way, high-credit borrowers who are buying houses help to give the appearance that we are nearly back on track when it comes to the real estate market. The number of homes still in a state of foreclosure, however, tells a different story.

In addition to drawing a connection between market recovery and high-credit borrowers, Black Knight also noted that “third quarter foreclosure starts were up 1.70 percent from the second quarter due to a rise in repeat foreclosure.” In other words, Chicagoans should not assume that foreclosure risks have been eradicated.

Do you have questions or concerns about foreclosures in the Chicago area? Do not hesitate to reach out to an experienced Oak Park foreclosure defense attorney with your questions. Contact the Emerson Law Firm today to learn more about how we can assist you with your case.

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