Grim outlook as foreclosure auctions soar in suburbs

The suburbs are heading for more empty homes amid the foreclosure crisis, with little hope in sight as the robo-signing controversy, high unemployment and underwater home prices stall a recovery, the Woodstock Institute said Tuesday.

Arlington Heights, Bloomingdale, Mundelein and others show triple-digit percentage increases for foreclosure auctions during the third quarter, compared to the same period a year ago, according to data from Kaneville-based Record Information Services for Woodstock's quarterly foreclosure report. Auctions are the end stage of the foreclosure process, where the homeowner has relinquished the property and the county sheriff's office attempts to sell it.

"We haven't hit the bottom yet," said Woodstock Senior Vice President Geoff Smith. "And it seems we have a ways to go."

In many suburbs, that end stage of foreclosures continues to pile empty homes on the market. Arlington Heights showed 78 auctions during the third quarter, a 136 percent increase compared to the same period a year ago. Palatine had 92 auction, up 80 percent; while Hoffman Estates had 82 auctions, up a whopping 228 percent.

"Their numbers aren't slowing down," Smith said, referring to many suburbs.

Continuing high unemployment, remnants of the recession, as well as properties that remain under value have forced many homeowners into foreclosure or they've just walked away. The institute, which has been tracking the foreclosure crisis, offered little hope at a controversial time when banks are being accused of robo-signing foreclosure documentation. The ongoing investigation, and some moratoriums, likely will prolong the foreclosure process, Smith said.

While areas south and west of the city long have been concerns of foreclosure activity, the crisis could be at a plateau. But community leaders need to address the growing number of empty homes, Smith said.

Another organization also released data Tuesday that shows more distressed homeowners are seeking financial counseling to try to save their homes.

Washington, D.C.-based Homeownership Preservation Foundation has received 145,993 calls nationwide in September from distressed homeowners, a 3 percent increase from the previous month. Call volume to the hotline - (888) 995-HOPE - increased 7.4 percent in the third quarter from the previous quarter.

There were 6,262 calls from Illinois homeowners during September, compared with 5,394 in September 2009, a spokeswoman said.

Callers to the hotline, staffed by 600 HUD-approved housing counselors, have the option to participate in a process to help them move toward sustainable homeownership, and if possible, to provide an opportunity to work with their servicer to avoid foreclosure.