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Illinois is still in the top 5 for foreclosure

Illinois is still among the top five states for the number of foreclosures. There are many homeowners who still have to face the possibility of losing their home to the foreclosure process. This is attributed to the nature of the process in our state.

Along with approximately 25 other states, Illinois uses the judicial process for foreclosures. It is thought that this process is responsible for the approximately 33 percent increase in foreclosures in 2012. Accordingly, it may not be possible to tell whether the market is truly on the road to recovery.

As more and more foreclosures are processed, a large number of properties could end up on the market at depressed prices. Many lenders are not willing to or capable of managing all of the properties they may find themselves owning if they are all foreclosed. For this reason, some lenders may decide to put off foreclosing as long as possible and may even be willing to renegotiate when they wouldn't before.

For those homeowners who are still struggling to save their homes, filing for bankruptcy protection could help. Once a homeowner has filed bankruptcy, that homeowner may be afforded the time and space to deal with their financial problems. Depending on the type of bankruptcy filing, it may be possible for a homeowner to negotiate with the lender to keep the home. In the alternative, having the time to think without the pressure of a foreclosure looming over the homeowner's head may bring the homeowner to decide to walk away from the home. Regardless of which decision the homeowner makes, bankruptcy can often provide a fresh start to those who want it.

Source: Medill Reports, "Illinois foreclosures jump in 2012 as national recovery appears mixed," Tyler Day, Jan. 17, 2013

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