Foreclosures in Illinois Move Slowly Due to Courts

May 23, 2012

Man Surronded by Foreclosure NoticesForeclosures continue to plague the housing market, but some states are seeing their foreclosures decline while others are not so lucky. In states that require a court-supervised foreclosure system, like Illinois, distressed properties going through the system move at a snails pace.

The latest release from the Mortgage Bankers Association explains that overall, the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 7.40 percent of all loans outstanding as of the end of the first quarter of 2012. That is a decrease of 18 basis points from the fourth quarter of 2011, and a decrease of 92 basis points from one year ago.

While this is good news, there is a problem in that foreclosure starts take a very long time to go through the court system in states like Illinois, New Jersey and Florida.

“The problem continues to be the slow-moving judicial foreclosure systems in some of the largest states.  While the rate of foreclosure starts is essentially the same in judicial and non-judicial foreclosure states, the percent of loans in the foreclosure process has reached another all-time high in the judicial states, 6.9 percent.  In contrast, that rate has fallen to 2.8 percent in non-judicial states, the lowest since early 2009,” said said Michael Fratantoni, MBA’s Vice President of Research and Economics.

“As the foreclosure starts rate is essentially the same in both groups of states, that difference is due entirely to the systems some states have in place that effectively block timely resolution of non-performing loans and is not an indicator of the fundamental health of the housing market or the economy.  In fact, hard-hit markets like Arizona that have moved through their foreclosure backlog quickly are seeing home price gains this spring,” explained Fratantoni.

Over 50 percent of all loans in foreclosure nationally are in Illinois, Florida, California, New York and New Jersey.

What do you think about the court-supervised foreclosure system in Illinois? Does it protect homeowners or is it slowing the state’s recovery in the housing market? Please leave us your comments.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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