Northwest suburban foreclosures now lead Cook County

Residents in the Northwest suburbs haven't been immune to the swelling ranks of homeowners in foreclosure, but now they hold the unwelcome distinction of leading the way.

Foreclosures in Northwest suburban Cook County jumped 55 percent in the first six months of 2010 compared to the same period last year, according to data released by the Woodstock Institute.

By comparison, the nonprofit research and policy organization showed increases ranging from 29.2 percent to 35.9 percent throughout North, West, Southwest and South suburban Cook County.

"In general, it seems there's a shift where foreclosure is occurring," said Woodstock Senior Vice President Geoff Smith.

When the housing crisis first started, foreclosure activity spiked in lower-income areas, communities of color and areas with a high concentration of risky mortgages, Smith said. But those subprime mortgages and NINA loans (No Income No Asset) have since cycled out of the system.

Now, new foreclosure filings have actually decreased in those areas, while the fallout from the economic recession is only worsening in the region's middle- and higher-income communities.

The prime examples are Palatine, Schaumburg and Streamwood, which ranked second, fourth and sixth, respectively, in the number of new foreclosure filings in the first half of 2010 in suburban Cook County.

Filings jumped 94.6 percent in Palatine for a total of 432 new foreclosures, behind only Cicero's 541 filings.

However, nearly a fourth of those in Palatine can be traced to a single development. The Woods at Countryside, a 970-unit condominium complex near Northwest Highway and Baldwin Road, had 98 properties go into foreclosure.

"That's over 10 percent of one complex," Palatine Village Manager Reid Ottesen said. "The numbers are skewed because of one specific development and when you take away the impact of that, our foreclosures are no more than the communities around us."

The problem with the Woods at Countryside began in 2007 when a developer began converting apartments into condominiums. When the housing bubble burst soon after, many first-time homeowners and investors who bought multiple units were unable to unload them.

Unlike Chicago, where many of the foreclosed condos are new construction or luxury, the Woodstock Institute's Smith said the condos hardest hit in the Northwest suburbs tend to be older, more modest and part of large developments.

He speculated that some of the foreclosure victims could be investors or more moderate-income people who had the smallest cushions in terms of savings and job security.

In April, a bank-direction auction was held for 40 condos at Woods of Countryside. Opening bids were set at $64,500 for a one-bedroom and $69,500 for a two-bedroom, down from previous listings of $190,000 and $240,000, respectively.

In Schaumburg and Streamwood, the foreclosure problem has targeted single-family homes much more so than in Palatine, where about 70 percent of filings are in the condo market.

After consulting Streamwood's village clerk and code enforcement officer, Finance Director David Richardson said there's no one pocket in the community that has suffered a disproportionate amount of foreclosures this year.

"We've mapped it out and it's pretty much all over town," Richardson said. "I can't pinpoint an area that's been hit harder or for what reason."

The same goes in Schaumburg, where foreclosures rose 41.2 percent from last year. Economic development coordinator Matt Frank said that fortunately, the units don't stay vacant for very long, so there aren't any significantly blighted developments.

Smith said many of these foreclosures are the result of unemployed homeowners who owe more on their mortgages than their properties are worth.

"I suspect foreclosures to be pretty high in the suburbs until we see a turnaround in the economy or rebound in the housing market," Smith said.

Some residents in danger of losing their homes are turning to free housing counseling and legal services available through the Circuit Court of Cook County Mortgage Foreclosure Mediation Program, used by more than 1,500 homeowners since its April launch.

The program, which got $3.5 million from the county board, is open to county residents who have received a foreclosure summons from the Cook County Court and live in a single-family home, single-family condo or apartment building with four or fewer units. There are no income restrictions.

Those who are eligible can call (877) 895-2444 or use the new web features on cookcountyforeclosurehelp.org to set up an appointment with a housing counselor.

Word of the program is being spread through door-to-door visits in areas hit hardest by foreclosures.