Foreclosure filings in Forest Park leveled off overall in 2012 compared to 2011, but the scenario for single-family homes and condos was dramatically different.
The number of single family homes for which initial proceedings were initiated dropped last year by 29 percent from 58 in 2011 to 41 in 2012. But the number of foreclosed condos rose by 23 percent from 61 in 2011 to 75 in 2012, according to data released Monday from the Woodstock Institute, a nonprofit research organization.
That doesn’t mean all of those properties were foreclosed, said Woodstock Institute Vice President Spencer Cowan.
“Not everybody who gets a foreclosure filing notice gets foreclosed,” he said. “Some of them end up as short sales or deeds in lieu or the owners make mortgage modifications.”
Auction is where a number of homes on the foreclosure list end up, Cowan said, usually up to a year after initial filings. According to Woodstock Institute data, single-family properties saw a doubling of the number of auctions in 2012: Twenty-nine single-family homes weree auctioned, up from 14 in 2011. For condominiums, that number was 25 percent, to 36 condos auctioned in 2012 from 23 in 2011.
Forest Park resident and Realtor Maria Murzyn attributed the rise in the number of auctions to investors buying single family homes to flip.
“Investors are buying all the single-family homes in Forest Park they can get their hands on,” said Murzyn, who is also a part-time employee at Wednesday Journal, Inc., which owns the Forest Park Review. “But investors don’t buy condos as much because there can be prohibitions on renting within a condo association that discourage investors.”
It’s hard for former owners to see their homes being sold at auction for reduced prices, Murzyn said.
“If the bank wouldn’t let you refinance or extend your mortgage to 40 years, then they turned around and sold that home at auction for $30-$40,000, that’s hard to take,” she said.
The silver lining is that, at least for single-family homes, inventory of distressed properties is reduced which may help the market in the future.
Throughout the six-county region, according to the Woodstock Institute, foreclosure activity was pretty flat. In the city of Chicago, foreclosure filings fell by 1.4 percent in 2012, although there were pockets where filings rose sharply. In West Garfield Park on the city’s West Side, filings rose 27.8 percent. In Calumet Heights on the South Side, foreclosures jumped 47 percent in 2012.
According to Cowan, part of that trend can be explained by the fact that Chicago was hit hard by foreclosure activity early on in the housing crash, while suburban homeowners experienced what he termed “the slow-motion train wreck” — homeowners who weathered the first years of the recession, but slowly were squeezed out of their properties as the recession continued.
“If my wife and I own a home that’s underwater, and if my wife gets her hours cut at work, we can’t pay our mortgage. But we can’t sell and downsize either because we’re underwater,” Cowan said. “We see it happening, but there’s nothing we can do.”
The Woodstock Institute also reported that in 2012 the number of properties to complete the foreclosure process rose sharply throughout the six-county region. The number of foreclosure auctions in the region grew by 73.8 percent in 2012 compared to 2011.
Bob Uphues contributed to this article.
