Foreclosure filings increased by exactly one percent in the city of Chicago between the first six months of 2011 and first half of 2012, according to data compiled by the Woodstock Institute. But the jump in foreclosures was more dramatic in a handful of struggling, mostly black neighborhoods on the South Side.
Filings in West Pullman were up 58.7 percent from 155 to 246 in the first half of this year compared to 2011. The number of foreclosures jumped in Englewood 24.1 percent from 141 to 175 and climbed in Calumet Heights 54 percent from 50 to 77.
“The recovery is not spread out evenly,” says Spencer Cowan, vice president of research at the Woodstock Institute, a Chicago research and advocacy group. Cowan added that the West Pullman and Englewood communities “had been enjoying declining filings in recent years.”
As Progress Illinois has examined, many predominantly black Chicago neighborhoods suffer from a disproportionate number of “underwater” mortgages, where unmet loan payments now exceed the value of the property. Another problem is unemployment. The Englewood unemployment rate is north of 30 percent.
A number of national and local solutions have been suggested to stem these filings, with mixed results. Last week, the Chicago Anti-Eviction Campaign advocated to Cook County President Toni Preckwinkle the need for a countywide one-year foreclosure moratorium.
Meanwhile, there was a foreclosure decline for the first half of this year in more affluent communities such as the Loop, West Town, and Logan Square. In the Chicago's downtown Loop area, for example, filings dropped 28.7 percent from 136 to 97.
Each of the 77 Chicago area neighborhoods saw a jump in the number of completed auctions of foreclosed properties with the city experiencing a whopping 87.7 percent increase from the first half of 2011 to the first half of 2012. The six-county Chicago region saw a 104.7 percent increase in the number of auctions in this period.
The climb is due partly to a national foreclosure fraud agreement this February, better known as the “robo-signing” settlement that enabled five major private lenders to go forward on mortgage transactions previously in limbo.
Cowan also partly attributes the increase to the Vacant Property Ordinance that forced Chicago lenders to register vacant, foreclosed properties with the city.
But the completion of a foreclosure auction may make little tangible difference to the property in question. In the six-county region, 91.3 percent of the units auctioned in the first half of 2012 remain real estate-owned, meaning that the lender could not find a new owner and must then hold on to the property.