Chicago area sees big jump in foreclosure auctions
New figures show that while the number of properties with foreclosure filings in the greater Chicago area didn’t change significantly from the first half of 2011 to the first half of 2012, the number of foreclosed homes sold at auction jumped dramatically. According to new data from the Woodstock Institute, the number of completed foreclosure auction in Cook, DuPage, Kane, Lake, McHenry and Will Counties increased 104.7 per cent from one time period to the next. The number of homes sold at auction so far this year in Cook County alone numbers 10,821.
“It’s a trend that may continue as we work our way through the backlog,” said Spencer Cowan, Vice President of Research at the Woodstock Institute. Cowan said that backlog was, in part, caused by the pending settlement between Illinois and other states with lenders over robo-signing foreclosure documents. The legal case put many foreclosures in Illinois on hold, but after the settlement those cases have been allowed to reach completion.
Cowan said another factor may be a relatively new fast-track foreclosure process that Cook County introduced for vacant homes. Also, the County and the city of Chicago each introduced vacant building ordinances to force lenders to maintain and secure properties that owners had abandoned. Cowan said that may explain why there are huge increases in banks repossessing foreclosed homes at auction.
“If, as lender or servicer, I’m going to be responsible for securing that property anyway, I might as well own it,” said Cowan.
The increase in foreclosure auctions is a “mixed blessing,” said Cowan. “To the extent that it clarifies the situation and puts some entity in charge of that property, that’s a good thing.”
But Cowan added it’s now more important to see what will happen to the properties going forward. “It will depend a lot on what the lenders, what the banks, do with the property. If they maintain it properly, if they secure it properly, and if they return it to productive use, so they sell it to somebody that will either occupy it or rent it to responsible tenants, that will be a very good thing for the neighborhood.”