Progress Illinois

Organizations like the National Training and Information Center have have spent considerable energy over the past 18 months examining the cause of the foreclosure crisis and providing assistance to Chicago residents impacted most acutely. And rightfully so -- in 2008 alone, 20,000 homeowners were foreclosed upon within the city limits, 75 percent of whom took out Adjustable Rate Mortgages (ARMs) or other high-risk loan products to finance their purchase. But in the first few months of 2009, it's Chicago's suburbs that are experiencing a new wave of housing problems. Crain's highlights new data from the Woodstock Institute yesterday:

Foreclosure cases filed in the first quarter jumped between 25% and 70% from the fourth quarter in DuPage, Will, McHenry, Lake and Kane counties, according to new data provided to Crain's by the Woodstock Institute, a Chicago-based housing advocacy group. Meanwhile, foreclosures fell 8% in Chicago, the first quarterly decline in a year.

Across the six-county Chicago metropolitan area, foreclosure filings rose 6% in the first quarter to 17,819, the highest one-quarter total since the housing crisis began in mid-2006.

Suburban growth explains how the number of Illinois households threatened with losing their homes rose 62 percent in February from last year’s levels, even while the crisis in Chicago has plateaued.  According to Geoff Smith, Woodstock's vice-president of research, the latest round of forclosures is affecting middle-class neighborhoods where residents are facing job losses and declining savings. In fact, most borrowers qualified for standard-rate mortgages; it's just that they can't keep up with their payments.

Bob Palmer wrote a nice column for us back in January outlining what a comprehensive plan to address homeowners and renters impacted by the foreclosure crisis would look like. But given recent activity in Washington, it may be a while before we see any broad-based relief.  Indeed, Sen. Dick Durbin worried out loud last week that the banking industry believes "they will make more money if they force this to an extreme and the government has to step in."  He added, "[W]hen I think of what they will leave in their wake, with all of these people and their foreclosed homes, all of these empty homes that become eyesores in neighborhoods, and the declining real estate values of America, it's a heavy price to pay."