Chicagoland Foreclosure Filings Jump 31% in November

[UpInArms]

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20041129005009&newsLang=en

SACRAMENTO, Calif.--(BUSINESS WIRE)--Nov. 29, 2004--Northern California based Foreclosures.com, an investment advisory firm specializing in distressed property, reported today that new filings of foreclosure increased by 31% in the first 18 days of November over the total of new cases filed the previous month.

"Our research in the Chicago area reported 3,695 new lis pendens filings in the six county Chicago metro areas as of November 18," said Alexis McGee, president of Foreclosures.com. "In contrast there were a total of 2,536 new cases filed for the full month of October." Ms. McGee added that 2,603 of the November filings were in Cook county, with the balance in the five suburban counties.

Ms. McGee went on to say that Chicago real estate activity was mirroring the much more overheated coastal markets in that sales volume was increasing even as prices were coming down. "The Midwest is a lot less volatile than the coastal markets because the Middle America markets never really got as overheated as those in California, Nevada and in the Northeast. We saw double-digit price appreciation year over year in the coastal markets, and over 52% in Las Vegas. In contrast, Chicagoland prices rose just 7.6% year over year in the third quarter of 2004."

Ms. McGee also noted that the increase in home values for all of Chicagoland was offset by a 4.7% drop in Cook County prices in September from the same month in 2003, and said this weakness, combined with rising interest rates could be a contributing factor in the surge in foreclosure filings. "Over the last twelve years, we've always seen a correlation between rising rates, falling prices, and an increase in foreclosure activity."

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[benburch]

1. Banks do not want to foreclose if they can avoid it.

These represent people who are months and months behind on their mortgages and who have no realistic hope of ever being able to catch up.

As foreclosed homes enter the marketplace, they drive down the value of homes in the area, further weakening the economy.

We here in Northern Illinois are in deep trouble, and no doubt Bush will now try to repay us for being a Blue state.

[gottaB]

2. The banks have gotten into subprime lending in a big way

The major lenders always say they'd rather not incur the costs of foreclosure, but then they'll get down and dirty with the loan sharks if there's a dollar to be made. I don't see how the banks could be offering these atrocious rates to people with bad credit and insufficient income, and then whenever somebody's grandma gets foreclosed on they turn around and be all like "We only want to help people own their own homes." It's not called "predatory lending" for nothing. They are wolves, all of them.

[AP]

3. I think the other side of this is a lot of people are buying homes with...

...nothing down. They think of their mortgage payment as rent. If they get foreclosed upon, it's like an eviction. If you didn't put anything down, you don't really lose anything, just like with rent.

So long as the banks give nothing-down loans, there will be someone willing to be the next in line.

[CAcyclist]

7. It's worse than that out here

They are giving interest-only loans out - usually interest-only payments for the first 5-10 years then the principle needs to start being paid.

Thus the person can qualify for a more expensive house because the initial payments are less - but it's all interest and it's still a 30 year loan. There is an assumption that the person will be able to afford the steep increase once the principle needs to be paid down - but this principle is spread out over only 20 years instead of 30 years, so it's even more dramatic. And then the kicker is that these are adjustable rate mortages, so when interest rates rise , these interest payments go up.

[Anakin Skywalker]

4. So Tell Me Once Again...

how "the economy is strong" (according to Bush 3:16)???

*Of course it's sarcasm!*

[vinny9698]

5. I got me a no down payment house

The total out of pocket costs were $1200 and then my first payment was't due until three months later. Cheaper than rent for those three months.

[OutsourceBush]

6. Bush's ownership society, the BANK OWNS everything after they repossess it

Hopefully a lot of Republican foreclosures as Bush's policies force interest rates, higher, and higher, and higher...

[demgrrrll]

8. Someone wrote that this period of time feels like when you are at the

top of the roller coaster waiting for the big dip down. Just that moment before you plummet into the unknown. I thought that was a good analogy.

[struggle4progress]

9. Bingo. eom