More Chicago area homes face foreclosure, but fewer owners ‘underwater’
BY FRANCINE KNOWLES Business Reporter email@example.com November 15, 2012 12:16AM
Updated: December 19, 2012 12:00PM
More Chicago area homes are facing foreclosure, but fewer homeowners are “underwater,” according to two reports released Thursday.
The number of homes hit with foreclosure filings in the Chicago metropolitan area jumped 19.5 percent in October from a year earlier, continuing a trend, according to RealtyTrac, which doesn’t expect recovery here until 2015. The number receiving filings rose 4.3 percent from September, RealtyTrac’s latest report showed.
But on a better note, rising home values mean fewer Chicago area homeowners were upside down on their mortgages in the third quarter. The share of those “underwater” fell to 36.6 percent in the third quarter from 39.2 percent in the year-ago quarter and in the second quarter, according to Zillow Inc.
In the third quarter, there were 639,495 homeowners in the area with negative equity, also referred to as being underwater on their mortgages. Among those homeowners, 27.2 percent owed double the value of their homes.
To see how many homes are underwater in your community, check Zillow’s map.
Nationally, the number of homeowners with negative equity fell to 28.2 percent in the third quarter from 30.9 percent in the second quarter and 30.6 percent a year ago.
In the Chicago area, RealtyTrac reported that foreclosure filings were made on 13,690 homes in the area last month. One in every 277 homes in the area received a filing last month.
The nearly 20 percent year-over-year increase “continues a trend we’ve been seeing really for this whole year,” RealtyTrac Vice President Daren Blomquist said. “October was the 10th straight month with a year-over-year increase in foreclosure activity” in the Chicago area and statewide.
Foreclosures have risen in the Chicago area and Illinois this year after having been delayed last year and in 2010 because of documentation issues that have since been resolved.
“This period of 2012 is kind of a catch-up year,” Blomquist said. “In 2013, I don’t think we’ll continue to see these double-digit type of percentage increases. I think the lenders will have caught up with much of the backlog.”
Still, he foresees foreclosures remaining relatively high next year, compared to what is expected in a normal market. He expects filings to trend downward in 2014.
“Nationwide, it is mid-2014 when we expect foreclosure numbers really to be back to a normal healthy level in many areas,” he said.
“I think because of the longer delays in Illinois and the longer foreclosure process, that [recovery here] could be pushed out into 2015, a little bit behind some of the other states.”
He added Illinois’ continuing high unemployment rate also is contributing to the increase in filings. The jobless rate stood at 8.8 percent in September. The state’s October unemployment report is due out Friday.
Nationally, the number of homes hit with foreclosure filings rose 3.3 percent in October from September to 186,455 homes, but dropped 19.2 percent from October 2011.