Surge in Illinois Foreclosures Could Happen Again

by on States

After a substantial slowdown in April, Illinois foreclosures could surge again if the economic problems are not solved. According to a report from the state comptroller for the fiscal year ended June 30, the state has unpaid bills amounting to $4.7 billion and a general revenue balance of negative $4.69 billion.

Due to the adverse effects of overloaded foreclosure homes lists and the recession, the state revenues over the 12-month period plunged by a record rate. Corporate tax revenues fell by over 20 percent, sales taxes dropped by almost 7 percent and personal income taxes decreased by almost 8 percent, pushing up total losses in tax revenues to over $1.5 billion.

With the huge losses, the state could not replenish its reserve funds and could not pay bills on time. Over the past several months, it has taken 153 working days for a bill to be paid from the time the bill is submitted to the comptroller’s office for processing and payment.

Although the pace of Illinois foreclosures dropped by more than 20 percent in May on a month-over-month basis, the pace could surge again if the state does not have the money to help its distressed constituents save their homes. A total of 15,061 homeowners were notified of default or foreclosure in May, a double-digit slowdown over the month, but still higher by 37.64 percent than the total in May 2009.

In the most recent report released by the Treasury Department on the performance of mortgage lenders participating in the Home Affordable Modification Program, JP Morgan put 37,550 distressed mortgages into trial modification and 47,467 mortgages into permanent modification out of 257,474 mortgages offered with modification under the HAMP scheme. With these figures, it is inferred that a number of troubled mortgages in Illinois have been prevented from entering listings of JP Morgan Chase foreclosures for sale.

Despite the slowdown in foreclosure filings in Illinois in May over the month, people engaged in foreclosure investments in Illinois still have plenty of listings to explore as there were more than 4,000 residential units that entered bank owned listings of Illinois foreclosures in May.

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