Rising foreclosure in Chicago and its neighborhood - A cause of concern

Posted in Foreclosed Properties, Foreclosure, July 17th, 2007 |

Foreclosure rates in the county are skyrocketing. Chicago and it neighboring areas are hard hit due to foreclosures. Realty Trac.com reveals that the state of Illinois is one amongst the top ten states with a high foreclosure rate. Reports also reveal that the extent of foreclosure cases in Chicago and its neighboring areas are on a rise. As per the National Training and Information center, Chicago recorded a 36% increase in its foreclosure cases. The number of foreclosure cases in the city increased from 7558 in 2006 to 10,294 in 2007. This increase in its foreclosure cases in the current year is the highest since 1993.

The foreclosure problem in Chicago has also spread to its neighboring areas such as Austin. According to Michelle Rodriguez-Taylor, the city of Austin has witnessed a 65% increase in its foreclosure cases since the year 1993. Commenting on the foreclosure situation, Freddie Mac, one of the nation’s largest mortgage investors said that situation would further worsen due to a rise in the interest rate.

In order to express their concern over the rising foreclosure rate and create awareness regarding the same, several forums have been set up in areas such as Austin, Chicago etc and regular meeting are being held. Our staff reporter covered one such meeting that was held at Austin Senior Wellness Center on Saturday. Several foreclosure victims as well as real estate experts attended the meeting. Many of the experts expressed their views on the current foreclosure position in the area. Sighting reasons for the cause of foreclosure, U.S. Rep. Danny Davis (D-III.) stated that many homeowner sign mortgages contract, without obtaining adequate information about the condition of the loan.

As a result of which, they eventually end up loosing everything. Further adding, expert Rodriguez-Taylor said that several lending companies initially offer low rate of interest, which rises significantly within a short period of time, thus trapping needy borrowers. Michael van Zalinger of the Neighborhood Housing Services of Chicago made a good point in this respect. He highlighted sub prime lending to be the main cause of rising foreclosure rate in the area. This is because sub prime loans with a fixed rate starts rising significantly after a couple of years. The rising rate of interest makes it difficult for borrowers to keep up with payment, there by resulting in foreclosures.

At the end of the meeting National Foreclosure Prevention hot line number, 888-995-4673 was given, where foreclosure victims can seek help

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