Chicago foreclosures have gone through appalling phase in the past one year. It is amid one of the worst hit by the economic downturn and unemployment. This obviously led to defaults in mortgages and consequently to foreclosures of many properties.
Since October 2009 Chicago foreclosures have been on the rise. Compared to other states, Chicago is presenting hardly any signs of development and Chicago foreclosures are going through dire circumstances.
Among the total number of houses sold, the number of foreclosures rose from 22 percent in the quarter from July to September 2009 to a massive 72 percent in November and around 100 to 118 percent by the end of December 2009. There were 18,000 to 20,000 homes that were sold finally till December end. Analyzing the prices of the properties in Chicago, we come to the conclusion that they are too stumpy compared to the counties in other states.
The average price for a Chicago foreclosure is about $205,000, which is very less in contrast to the 2008 price index for the foreclosed properties. Among the Chicago counties Cook County and Joliet topped the list with the maximum number of foreclosures. Chicago also recorded an increase in the foreclosures activity in the suburban areas.
The reasons for the above activities are:
Increasing unemployment rate that is 11 percent
High Risk Mortgages
Negative Equity of the individuals
Subprime loans, especially in the suburban areas
Poor regulation of the real estate sector
Prejudiced lending practices
Expansion of federal tax credit program
From the above mentioned we can formulate that major reason for the foreclosures conditions is unemployment followed by illusory practices by individual people and firms.
To curb this situation, stringent steps need to be taken. Regulations need to be scrupulous so that banks and taxpayers are not vulnerable to erroneous entities. Maintain a check on loans that are allotted knowingly even though they are untenable. Already an initiative by the city of Chicago and housing services of Chicago has brought some relief to the ailing customers. They help in counseling the defaulted customers with alternative options and help people counsel on managing their finances, in case they feel they are going to default on the above grounds. Also Government and bank initiatives like loan modification and short sale has helped many in other states and can also be implemented.
Iwona Filetti is a writer with an eye for detail. She writes on several niche after a thorough research and understanding, her motto is to give beneficial information so all sections of society benefit from her writing. For more details please visit Chicago Foreclosures.
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