Home Foreclosures Rise in Chicago After Lull

A surge of foreclosure filings over the past two months are threatening homeowners in Chicago. For almost a year foreclosures were on hold while mortgage companies sorted out the mess created by the robo-signing scandal.

In November 2011, one in every 579 homes was in foreclosure, according to RealtyTrac, a company monitoring foreclosure properties. In Illinois alone, one in every 427 properties was in foreclosure in November 2011, placing it fourth in the nation in the number of foreclosures. Cook County had the highest number of foreclosures pending in the state at 7,412 filings.

The sudden rise in filings may mean homeowners struggling to make their mortgage payments may need to pursue other options to save their homes. For some people, their best shot of protecting their home from foreclosure in Chicago may be using a home foreclosure defense attorney.

Foreclosure Statistics

Foreclosures are still increasing. In October, the foreclosure rate for the U.S. increased seven percent from the prior month. Mortgage holders filed 230,678 foreclosure notices. Mortgage lenders actually repossessed 67,624 homes in October, an increase of four percent from the number they took in September.

Mortgage delinquencies fell, however, by 0.5 percent from August to September 2011, according to Lender Processing Service, signaling that the reason that foreclosures are on the rise is not because more people have fallen behind in payments.

End of the Break

There were two reasons for the lull in mortgage foreclosures. Initially, the robo-signing scandal of 2010, which exposed a swell of foreclosure notices filed by lenders with fraudulent paperwork and fake signatures, forced many mortgage companies to suspend foreclosures while they investigated filing practices and corrected errors in paperwork for foreclosures they already filed.

In addition to the mortgage scandal, the volume of delinquent properties headed to foreclosure was beginning to overwhelm mortgage companies. Lenders could not keep up on all of the foreclosure notices with everyone who had fallen behind.

Lenders also faced challenges on the back end. Even the homes that had been foreclosed upon, were not selling. The market became saturated with distressed properties.

Mortgage companies have spent extensive resources resolving their documentation, and are now ready to resume foreclosures once again. This means that many delinquent homeowners will have to make some very tough decisions about their homes.

A Bankruptcy Attorney Can Help

Fortunately, homeowners have the option of filing bankruptcy. There are different bankruptcies available to help individuals in Chicago get a fresh financial start. Homeowners who are tired of fighting with the banks may want to pursue a Chapter 7 bankruptcy. But for those who want to keep their homes, filing Chapter 13 bankruptcy may provide them with several options.

If you are in the Chicago area and are struggling with debt and facing foreclosure, you should speak with a bankruptcy attorney who can discuss your situation with you and provide you with choices to help you move forward with your life.

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