Foreclosure activity in the United States fell 15 per cent year-over-year in August. But housing is a local story and a few regions in the country were exceptions to the trend.
With one in every 298 properties receiving a foreclosure filing, Illinois had the highest foreclosure rate in the country for the first time since 2005, according to RealtyTrac’s latest foreclosure report.
Illinois pushed usual suspects like California, Arizona, and Nevada down the list.
The prairie state’s foreclosure rate jumped 29 per cent month-over-month (mum), and 42 per cent year-over-year (YoY), with 17,781 properties in the state received a foreclosure filing in August.
And every detail in the state’s foreclosure report was ugly. Foreclosure starts – the pace at which mortgages enter the foreclosure process – were up 18 per cent on the year. Scheduled foreclosure auctions were up 116 per cent YoY. Bank repossessions climbed 41 per cent YoY.
As a state that requires foreclosures to go through the judicial process, Illinois’ foreclosure rate was “artificially low” last year, according to Daren Blomquist, vice president of RealtyTrac.
5,268 homeowners in Illinois received a total of $357.3 million in assistance as part of the $25 billion national mortgage foreclosure settlement as of June 30, 2012, according to a report by the Office of Mortgage Settlement Oversight. That’s roughly $67,817 per borrower but it’s unlikely to have a large impact in reducing foreclosures in the future.
Foreclosure activity in the Chicago-Naperville-Joliet metro area was up 44 per cent YoY, making it the metro with the eighth highest foreclosure rate in the country.
Blomquist told Business Insider in an email interview that in the case of the Chicago metro area, a land bank, like the ones set up in Cleveland and Detroit that rehabilitate properties or demolish them, could help ease the burden of distressed properties.
He doesn’t however expect any improvements in Illinois’ foreclosure rate anytime soon. “The foreclosures coming through the pipeline in Illinois and other states now are likely on mortgages that the banks do not deem are a good fit for any of the foreclosure alternatives outlined in the mortgage settlement.” He does however think that a program similar to Oregon’s foreclosure mediation program could help slow down foreclosures.
This chart from RealtyTrac shows the recent surge in Illinois’ foreclosure activity as its banks and courts push through foreclosures:
RealtyTrac’s report also broke down US metropolitan areas with the highest foreclosure rates.
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