Foreclosures Strike Back

June 17, 2012

Figure with Home on his backAs reports of home sales and home prices going up have helped crack a smile on the face of the housing industry, a new report by RealtyTrac will surely cause that smile to weaken.

In Illinois, foreclosure activity jumped 29 percent in May compared to April. Compared to last May, foreclosure activity has surged 54 percent.

After the slate of good news recently reported regarding the real estate market, how did this depressing news come to be? A main reason is that lenders have finally got around to their backlog of distressed properties. These homes would have shown up on previous reports if not for the banks keeping them bottled up after the robo-signing controversy forced lenders to pay out $25 billion to 49 states due to pushing foreclosures through the system too quickly and without proper documentation.

Now that these foreclosures are finally hitting the market there is still a possible silver lining in this ominous cloud. Many of these properties may get fetched up before the banks are forced to take them back.

“Based on the rise in pre-foreclosure sales we’ve seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward,” Brandon Moore, RealtyTrac’s CEO, said in a statement.

Hopefully this is an accurate forecast as foreclosed homes sell for 33 percent less than non-distressed home on average. Homes in the pre-foreclosure process sell for 21 percent less than non-distressed home on average. However, some of these homes will be repossessed by the bank resulting in property values declining in parts of the country.

According to RealtyTrac, one in every 325 Illinois housing units received a foreclosure filing in May 2012. Cook County saw the highest number of foreclosures with 8,138 homes out of a total of 16,318 foreclosure filings for Illinois in May.

In Chicago, one in every 252 housing units are foreclosures, placing the Windy City fourth among the 20 largest metro areas in the nation.

Georgia saw the highest foreclosure rating for the month of May.

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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