Illinois foreclosure activity up 25% last month

Feb. 11, 2010

(AP) — The number of Illinois properties facing foreclosure rose more than 25% last month compared with the same period the previous year, bigger than the nationwide increase.

More than 18,000 properties in Illinois got a foreclosure-related notice in January, RealtyTrac Inc. reported Thursday. That’s up 1.7% from December and 25.4% compared with January 2009.

One in every 291 properties in the state got a foreclosure-related notice last month, the eighth-highest rate in the country, said RealtyTrac, an online marketplace for foreclosed properties.

Foreclosure-related filings, which include default notices, scheduled foreclosure auctions and bank repossessions, rose 15.1% nationwide last month, with one in 409 properties getting one, according to Irvine, Calif.-based RealtyTrac.

But filing fell 9.7% nationwide compared with December.

The vast majority of properties in RealtyTrac’s database are homes.

Meanwhile, Chicago-area home sales rose almost 45% in the fourth quarter while the median price dropped 13%, according to the Illinois Assn. of Realtors.

Among states, Nevada posted the nation's highest foreclosure rate, followed by Arizona, California, Florida and Utah. Rounding out the top 10 beside Illinois were Idaho, Michigan, Oregon and Georgia.

The metro area with the highest foreclosure rate in January was Las Vegas, with one in every 82 homes receiving a foreclosure filing.

Banks repossessed more than 87,000 homes last month, down 5 percent from December but still up 31 percent from January 2009, RealtyTrac said.

January marked the 11th straight month with more than 300,000 properties nationwide receiving a foreclosure filing. The numbers could stay above that level as unemployed homeowners who have tried to keep up with their mortgages finally start missing monthly payments.

Mortgage financier Fannie Mae reported in late January that the rate of borrowers who have a conventional loan on a house and are seriously delinquent was 5.29% in November, more than doubling the rate of 2.13% percent in November 2008. Borrowers are considered seriously delinquent if they are past due by three months or more or are in foreclosure.

"There's a lot of foreclosures in the pipeline, and the number is going to continue to get bigger," said Patrick Newport, an economist with IHS Global Insight.

Last month's foreclosure activity followed a pattern similar to that of a year ago, when a double-digit percentage increase in December was followed by a 10% drop in January.

The dip in January's numbers may be due to processing delays by lenders during the end-of-year holidays, said Rick Sharga, senior vice-president of RealtyTrac.

"I don't think it's an early sign of the coming of the end of the foreclosure crisis," Sharga said.

A record 2.8 million households were threatened with foreclosure last year, and the numbers are expected to rise to between 3 million and 3.5 million homes this year, RealtyTrac said.

Foreclosed homes are usually sold at steep discounts, so they often lower the value of surrounding properties. Home prices have stabilized in some cities, but are still down 30% nationally from mid-2006.

In the nine-county Chicago area, 19,947 homes sold in the fourth quarter, up 44.9% from the fourth quarter of 2008, the Illinois Assn. of Realtors said in a release Thursday. Sales rose 43.7% in the city of Chicago.

The Chicago area’s median price — the price at which half the homes sell for more and half for less — fell 13% to $187,000 in the fourth quarter, while the city of Chicago fourth-quarter median price fell 11.5% to $215,000 in the quarter, the Realtors association said.

Chicago-area home sales were flat for full-year 2009 and fell 7.4% last year in the city of Chicago.

The Illinois Assn. of Realtors’ sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Crain's contributed to this report.

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