Home Foreclosures in Illinois After the Great Recession

Brief Background on the Crisis

Economists generally agree that the latest recession began in December 2007, when the housing bubble in the U.S. burst and stock markets tumbled, creating the worst economic downturn since the Great Depression.

Dubbed by many as "the Great Recession," in reference to how significant the downturn was (and, by many accounts, continues to be), the recession has caused many homeowners to go into default on their mortgages. The effects of the housing bubble and its subsequent burst are still being felt today, despite official declarations that the recession ended in June 2009.

Predictions of Calamity

Also in June 2009, Housing Predictor editor Mike Colpitts wrote that there would be 10 million home foreclosures through 2012 (continuing three years later).

Though Colpitts's prediction appears to have been a tad pessimistic - from December 2007 to January 2012 there had been 3.6 million foreclosed properties, as Shanthi Bharatwaj reports for The Street, a number that barely approaches the prediction's halfway mark - that doesn't mean home foreclosure is a thing of the past.

Illinois Hit Hard by Foreclosures in August 2012

Recently the Chicago Tribune reported sobering statistics regarding the rate of foreclosures in Illinois, a state which topped the list of worst-hit states in the month of August. As Mary Ellen Podmolik reports, one out of every 298 Illinois homes got a foreclosure notice in August.

A full 91 percent of those notices went to homeowners in the Chicagoland area, as opposed to greater Illinois. Aurora homeowners, who live in the second-largest city in Illinois in terms of population, most certainly felt the impact of foreclosure.

Did You Get a Foreclosure Notice in Aurora?

Many homeowners in Aurora and throughout Chicagoland got foreclosure notices in the August mail due in part to what RealtyTrac's vice president Daren Blomquist calls "deferred foreclosure activity," or foreclosure efforts made by lenders that were temporarily halted or stalled for a variety of reasons.

"Bucking the national trend," Blomquist says, as Podmolik reports, "deferred foreclosure activity boiled over in several states in August." One of those states was Illinois.

Homeowners have several options when it comes to dealing with home foreclosure, including working through the federal Home Affordable Modification Program (HAMP) (which may or may not be effective), or turning to the help of a lawyer for mortgage assistance or bankruptcy.

Bankruptcy can help shield homeowners against common foreclosure problems, such as stopping (or temporarily halting) foreclosure proceedings altogether, eliminating the debt of a deficiency after a short sale, or restructuring the mortgage on much better terms over a three- to five-year payment plan.

Sources:

Housing Predictor: 10 Million Foreclosures Through 2012

Bank Foreclosures to Surge in 2012: RealtyTrac

Illinois posts highest foreclosure rate in U.S. in August