The Effect of Foreclosures is Still Going Strong

With the strengthening of the grip of foreclosures on the neighborhoods of Chicago, it is becoming clearer that most people will lose out on their homes. More homes in the community are falling pray to foreclosures and it takes more time to be sold after the lenders reclaim it.

At least 33% of the foreclosures of single-families being conducted during the last three years remained unsold even by the end of 2008. This left the residents in an unsafe condition. Foreclosures tend to sell at an average of 30%. This amount is lesser than the mortgage amount that is due and the lender has to bear a greater loss.

According to a fresh report about the condition of single-family homes in Chicago, features that this issue is specifically heightened in the Afro-American neighborhoods. Approximately 2,099 single-family homes, within the initial three months of 2009 were bank-owned. Almost 50% of these houses are above 80% Afro-American in nature. Some properties that are vacant for above 18 months added to the troubles.

The vice president of the Chicago think tank, Geoff Smith feels that the entire scenario is quite troublesome. He observes that, “You’ve got a lot of homeowners on the verge of leaving their homes and then look forward five years. If those homeowners have to leave because of foreclosure, what’s the likelihood of those properties getting absorbed back into the market?” These adverse trends are represented by the Chicago Lawn, which is a working-class community.

The community organization of 6200 block of South Rockwell at a shorter distance from the Greater Southwest Development Corp., contributed to area improvement as it is one of the most troubled blocks. Almost 50% of the properties falling in the category of both single-family and multi-family still have boarders while other properties are empty and bank-owned.

A multi-family building across 61st Street is in a disastrous conditions with scattered debris and weedy conditions. Roddis Scott, one of the residents staying some blocks away feels that, “There’s a lot of things going on down there.” He finds it unsafe to stay anywhere around the unsecured and vacant buildings.

In Chicago Lawn the average number of days for selling was 274 days during 2007 as compared to 180 days during 2005. They are specifically sold to investors and not to homeowners. Foreclosure proceedings took place against at least 1,800 properties and more between January 2008 and June 2009. The number of vacant properties has continued to rise consistently. Till date only 12% borrowers al over the nation are eligible for loan modifications trial. According to Freddie Mac, the failure in payment of single-family mortgages reached 3.13% in August mainly due to problems with adjustable rate mortgages regarding interest-only and pay-options.

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