Foreclosure rate in Palatine slows
With another year of increased foreclosure rates across the country coming to a close, Chicago’s metropolitan suburbs have fared no differently.
There have been 352 foreclosures in the first three quarters of the year in Palatine, an approximately 25 percent increase since 2008. That year, Palatine experienced an 86.6 jump in foreclosures from 2007, according to a study by the Woodstock Institute.
The Woodstock Institute, a Chicago-based policy and advocacy non-profit currently specializing in community economic development, has been tracking and mapping foreclosure rates in Chicago and the surrounding areas for the past two years.
“The real growth [in foreclosure rates] started to pick up in 2005 and started to explode in 2007 and 2008 started in 2008,” said Geoff Smith, senior vice president at the Woodstock Institute. “Much of the growth of the past year has been in the suburbs.”
Although foreclosure rates are generally increasing, the numbers have fluctuated this year due to interventions from the state and federal government, Smith said. Illinois now allows a grace period for homeowners to seek housing counseling before foreclosure, a policy instituted in March. The Obama administration has also enacted the Home Affordable Modification Program, which was set up to help troubled buyers get loan modifications.
“There was a big dip in second quarter in 2009 and a big jump in the third quarter,” Smith said, crediting the second-quarter dip to the homeowners’ ability to seek housing counseling. “Those two programs were implemented and because of that, that’s kind of effected foreclosure data we’ve seen.”
There were 222 foreclosures in Palatine in the first half of the year, and 130 in the third quarter.
The Village of Palatine has taken notice of the increased foreclosure rates, but doesn’t directly monitor them nor have they specifically designed any intervention steps.
“There has been an increase over past years,” deputy village manager Michael Jacobs said. “It’s not an overwhelming issue but it’s definitely a sign of the times.”
Jacobs said that the village’s main intervention is with maintenance of foreclosed and vacant properties.
“When you don’t have somebody living there, you have maintenance issues,” he said. “It gets complicated to chase somebody down, so we’ve kind of streamlined our process.”
Through Palatine’s current process, village staffers can attempt to track down the owner of the property, be it a resident or a lending company, and if they cannot find the owner or get the owner to comply with any necessary property maintenance issues, the village can hire a contractor to work on the property and recoup the expenses.
“We have seen our fair share [of foreclosures] and that was one of the reasons we tried to tweak our system,” Jacobs said. “We tried to come up with processs that’s still fair to the property owner but ultimately gets some compliance for the neighborhoods.”
The system instituted in Palatine will soon be echoed throughout Illinois if Governor Pat Quinn signs Senate Bill 1894, which passed the legislature during the veto session in October.
The bill would equip municipalities with tools to maintain foreclosed properties. According to the bill, lenders, servicers and county clerks must notify local governments about foreclosed properties, and authorize those governments to ensure those properties are maintained. Like Palatine’s system, the bill would also make it easier for local governments to recover costs for maintaining vacant properties.
According to Jacobs, Palatine recoups the money spent maintaining vacant properties when they sell.
The Woodstock Institute will have fourth quarter foreclosure rates after the year closes, but Smith doesn’t see things improving quickly next year.
“I would expect the number of foreclosures would increase again,” he said. “I don’t think the fundamental problems with the economoy will be fixed, unemployment will remain high, and until that is turned around you’re gonna see foreclosures remain high.”
