Homes in disrepair.
For-sale signs clustered in a single neighborhood.
Suburban leaders say they are concerned when they see these things -- red flags that foreclosure is looming, or that it has already happened.
While elected officials say they can't provide money to solve residents' woes, some are getting ready to have their village halls offer other kinds of help. Entire communities can get a black eye from too many foreclosed properties, they said.
Suggestions on how municipalities can prevent foreclosures came at a recent meeting of the Metropolitan Mayors Caucus, which has 272 members from the Chicago area.
Many of the ideas presented were easy and free to implement. For example, villages could provide links on their Web sites to agencies that counsel distressed homeowners.
Round Lake Mayor Bill Gentes said it would make sense for his village hall to be a resource for residents who find themselves facing foreclosure.
Gentes' village had 60 foreclosures, or 38.49 per 1,000 owner-occupied units, in 2006, according to data on the six-county Chicago area compiled by the Woodstock Institute and distributed to government officials by the mayors caucus. Last year was the first year town-by-town data was collected.
"The American dream is homeownership," Gentes said. "It's not foreclosure."
Mayors who attended the conference said suburban officials are typically concerned about providing traditional services such as police and fire protection. Whether they decide to help residents facing foreclosure likely depends on if they believe the problem exists in their communities.
Foreclosure has become a national concern. About 179,600 foreclosure filings were reported in the United States in July, above the 92,845 logged in the same month in 2006, according to California-based RealtyTrac Inc.
Resetting of adjustable-rate mortgages and subprime loans that were made to borrowers with shaky credit are among the reasons for the foreclosure boom.
Beth Dever, housing director for the Metropolitan Mayors Caucus, said foreclosures don't affect just the families forced out of their houses. There are the ancillary effects on cities, she said, such as unruly lawns, delinquent property taxes, the potential for neighborhood blight -- and tarnished images of a town.
Dever said because municipalities have a vested interest in foreclosure, local governments should lend a helping hand to distressed homeowners, who don't always know where to turn. She said some mayors reported their village halls have already received calls from worried residents.
At minimum, Dever said, towns should be able to direct distressed homeowners to federal Department of Housing and Urban Development-certified counseling agencies. Towns also should know to recommend the Homeownership Preservation Foundation's HOPE hotline for confidential financial help.
Dever said residents might be more willing to approach a village hall for help.
"I think it's seen as a more comforting local entity than a faceless mortgage broker," she said.
Research shows about 50 percent of delinquent homeowners avoid contact with the lender in the hope the problem disappears, according to NeighborWorks Center for Foreclosure Solutions in Washington, D.C. Many in trouble don't act on quality advice.
Sheila McCann, executive director of the DuPage Homeownership Center, said some DuPage County towns allow her nonprofit group to use public buildings for homeownership seminars.
"It's a win-win for everybody in the community," she said. "Certainly, everyone doesn't want to see abandoned homes or foreclosures."
Gentes said he's concerned about one Round Lake subdivision now marked by abandoned homes, clusters of for-sale signs and other signs of distress.
Problems at the four-year-old Lakewood Grove subdivision, near Route 60 and Cedar Lake Road, stem in part from individual investors who bought a number of homes with the idea of unloading them for a quick profit, Gentes said. He said 10 to 15 homes have been abandoned at Lakewood Grove.
Some investors purchased houses and used a rent-to-own concept to lure occupants with poor or shaky credit. Gentes said the downfall came when the owners dramatically hiked the monthly payments because of higher taxes, sending the residents fleeing and leaving empty homes.
Gentes said he's seen newspapers and trash pile up at homes where no one's living. That can make the whole town look bad, not just a particular subdivision.
Dever said the mayors caucus has cited Chicago as an example of a city trying to prevent foreclosures through its Home Ownership Preservation Initiative. The program has been promoted on CTA buses and trains.
Part of it involves assisting borrowers connect with lenders to find ways to halt the foreclosure process. The city also has gone to faith-based organizations to spread the word about mortgage fraud.
Mayors such as Gentes have a better picture about foreclosures because the 2006 foreclosure report by the Woodstock Institute was its first city-by-city examination. The study was requested by Chicago's housing department.
Geoff Smith, research director of the nonprofit group that specializes in community economic development, said mayors can't take action about a foreclosure problem if they don't know what's happening in their backyards. He said the Woodstock Institute will release a second city-by-city foreclosure study at year's end, which can be compared to the 2006 data.
Carpentersville Village President Bill Sarto said he's willing to have his town provide information to residents in trouble with their homes. Carpentersville had 212 foreclosures or 30.26 per 1,000 owner-occupied units in 2006.
"I certainly see it as a problem for all communities where people are on the bubble or the bubble has burst beneath them," Sarto said.
Tips for avoiding foreclosure
Don't ignore the problem: The further behind you become, the harder it will be to save your home.
Contact your lender: Lenders do not want your house. They have options to help borrowers through difficult financial times.
Open and respond to mail from your lender: The first notices you receive will offer good information about foreclosure prevention options. Later mail might include important notice of pending legal action.
Understand your options: Learn about foreclosure prevention options at www.fha.gov/foreclosure/index.cfm. Contact a HUD-approved housing counselor: The U.S. Department of Housing and Urban Development funds free or very low-cost housing counseling nationwide. Call (800) 569-4287 or TTY (800) 877-8339.
Avoid foreclosure prevention companies: Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three months' mortgage payment) while a HUD-approved housing counselor will help for free if you contact them.
Don't lose your house to foreclosure recovery scams: If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home. Get professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.
Where to turn
NeighborWorks America and the Ad Council have joined forces to target a public service advertising campaign at homeowners in danger of foreclosure. Two Web sites and a toll-free number are offered.
• Confidential financial counseling is available from the Homeownership Preservation Foundation's HOPE hotline at 1 (888) 995-HOPE. Free, unbiased advice is available in English and Spanish 24 hours a day.
• Foundation's Web site is at www.foreclosurehelpandhope.org. The foundation is a Minneapolis-based nonprofit agency dedicated to preserving homeownership and preventing foreclosure.
• Also check NeighborWorks America's Web site at www.nw.org/foreclosuresolutions. NeighborWorks is a national nonprofit organization created by Congress to provide financial support, technical assistance, and training for community-based revitalization efforts.
Source: NeighborWorks America