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Illinois foreclosure activity up 19% from a year ago

Published: Thursday, Nov. 15, 2012 9:41 a.m. CDT

(MCT) — Two reports issued Thursday show that the Chicago area's housing market remains challenged and its recovery lags behind the nation's.

Mortgage foreclosure notices were issued against 12,212 properties in the six-county Chicago area last month, an increase of 3.6 percent from September and 18.6 percent from October 2011, Realty Trac reported. During October, 3,117 homes in Cook, DuPage, Kane, Kendall, Lake and Will counties were repossessed by lenders.

Statewide, foreclosure activity in Illinois rose 19 percent in October from a year ago.  

On a national level, foreclosure notices, which include initial notices of mortgage default, scheduled auctions and bank repossessions rose 3 percent from September but were down 19 percent from October 2011. Banks repossessed 53,478 properties across the country in October.

"We continued to see vastly different foreclosure trends across the country in October, depending primarily on how each state's foreclosing infrastructure was able to handle the high volume of delinquent loans during the worst of the foreclosure crisis in 2010," said Daren Blomquist, vice president of RealtyTrac, in a statement.  

Meanwhile, Zillow said that negative equity trends are improving in the Chicago area, but there are still a greater percentage of upside-down homeowners here than elsewhere.

During the third quarter, the percentage of Chicago-area homes that were upside down on their mortgages, meaning more was owed on the loans than the value of the properties, fell to 36.6 percent, from 39.2 percent in the second quarter. The total equity loss for those 639,495 homes was $51.1 billion, Zillow said.  

The company also found that more than a quarter of area homes with negative equity owed more than double the value of the properties.

The five Cook County zip codes with the worst negative equity problems were 60626 (Chicago's Rogers Park neighborhood), 60466 (Park Forest), 60653 (Chicago's North Kenwood/Oakland neighborhood), 60471 (Richton Park) and 60409 (Calumet City).  

Nationally, negative equity fell to 28.2 percent of homes with a mortgage during the three months ended in September. In the second quarter, 30.9 percent of home mortgages were underwater, according to Zillow. Chief economist Stan Humphries attributed the improvement to a 1.3 percent rise nationally in home prices during the third quarter.

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