Foreclosures are likely to increase as Illinois leads the nation.Illinois

(Center Square) – Nationally, foreclosure rates are up 185% from a year ago, with Illinois leading the way.

In May, 1 in 2,000 homes in Illinois received foreclosure applications, and Chicago had the third-lowest rate among metropolitan areas of 200,000 or more, according to a report by real estate data provider ATTOM. was.

But foreclosure rates are actually at historically low levels, according to Christine Faust, executive director of the Illinois Department of Housing Development.

“The big picture is that unemployment is low, people are starting to work again, and patience has been tapped by many,” she told Center Square.

Most people are back on their mortgage payments, Faust said, and things are back to normal after the COVID-era moratorium.

“Banks, lenders and mortgage servicers were barred from conducting foreclosures in any meaningful way, so last year’s numbers will be very low,” she said.

Now that the moratorium has been lifted, lenders have started filing files and numbers are back to normal.

“Unfortunately, there is always a certain percentage of foreclosures, but what we don’t want is to get high and many lose their homes,” Faust said.

Foreclosures in May were 1% higher than a month ago, according to the report.

In addition to having the highest number of foreclosures, Illinois opened 1,757 foreclosures last month, trailing just behind the three largest states: Florida, California and Texas.

Faust notes that the current economic situation is extraordinary, contrasting with very high employment and similarly high inflation.

Illinois also has some weaknesses.

“Illinois has a high mortgage rate, which is a holdover from the last housing crisis, so it’s vulnerable,” she said.

In fact, Illinois has the third-highest percentage of underwater mortgages, making these more likely to go into foreclosure if the economy slows, Faust said.

The data show that a sharp increase could be coming.

“Right now we have high inflation and fear of a recession. If a recession hits, people could lose their jobs, and it’s definitely a correlation,” she said.

Still, with low unemployment and rising home equity, Faust has hopes for Illinois.

The state government is also planning another aid for the fall through the Illinois Emergency Homeownership Assistance Fund.

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