Foreclosures on the rise in ChicagoPosted On: July 2006
Rising mortgage interest rates and high consumer debt loads are sparking a rise in Chicago-area home foreclosures, a marketing data collection firm said Thursday.
The increase in foreclosures is most notable in the fast-growing collar counties, said Jeff Metcalf, chief executive of Record Information Services Inc.
His company is forecasting foreclosures in Will County to jump 51 percent this year, more than any other county in the Chicago area.
Higher mortgage rates are squeezing buyers who opted for adjustable-rate mortgages, Metcalf said.
"Any movement up in mortgage rates, particularly for those who used adjustable-rate mortgages, is going to affect a lot of people," he said.
Also, double-digit increases in home values prompted homeowners to dip into their equity.
"Many homeowners took advantage of the roaring real estate market to take out home equity loans with adjustable rates," Metcalf said.
Those loans are also becoming more expensive and putting additional pressure on consumers already burdened with high debt levels, he said.
"So, many people are maxed out," Metcalf said.
In Will County, for instance, RIS is forecasting a 51 percent increase in foreclosures this year based on the pace of foreclosures during the first quarter.
For all of 2005, 1,900 homes in that county were lost to foreclosure, RIS said. For the first three months of this year, lenders foreclosed on 957 homes in Will, the company said.
Most foreclosure proceedings start after a homeowner has missed at least three payments.
Based in Kaneville, RIS tracks data on home sales, new business openings, bankruptcy filings and civil court proceedings, selling the information to customers that include retailers, banks and mortgage companies.
RIS supplies information on housing trends to Chicago-area newspapers, and the company compiles home sales data that are published in the Daily Southtown.
By Mike Nolan Staff writer
Posted On: July 2006
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