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Thursday, April 15, 2010 08:08 pm

Springfield foreclosure rate up slightly

Roberta Hahn decides to do something about it


The foreclosure rate in Springfield continues to hover around one percent, but one Springfield woman has a plan to help reduce it and prevent future foreclosures.

First American Core Logic, a mortgage data analysis company based in California, says Springfield’s rate of foreclosures was .99 percent in February 2010, just above the .98 percent rate from February 2009. By comparison, the Illinois foreclosure rate rose from 2.39 percent in February 2009 to 3.67 percent in February 2010, while the national rate rose from 2.11 percent to 3.17 percent over the same period, FACL says. The company measures foreclosure rates by comparing the number of mortgages in foreclosure with the total number of mortgaged homes in a geographic area, which may yield different numbers than companies that compare foreclosed mortgages against all homes, mortgaged or not.

By ZIP codes, the 62703 area currently has the largest number of homes in foreclosure with 23, according to online foreclosure tracker RealtyTrac. Following closely is 62702 with 18 homes and 62704 with 12. The company estimates that one in every 1,223 Springfield homes received a foreclosure filing in February 2010, and 634 homes are currently in foreclosure proceedings here. RealtyTrac says the U.S foreclosure rate dropped by two percent in February, and Illinois ranks fourth among the states in foreclosure rates, though RealtyTrac measures foreclosure rates differently than FACL.

Springfield’s 90-day delinquency rate, which measures the percentage of mortgage loans unpaid for more than 90 days, rose from 2.34 percent in February 2009 to 2.87 percent in February 2010. That rate includes mortgages currently in foreclosure and those returned to the lender but not sold at auction. Lori Guyton, spokeswoman for FACL, says between 40 and 80 percent of 90-day delinquency cases proceed to foreclosure.

Springfield has fared well over the past year, compared with nearby cities like Peoria and Decatur. According to FACL, Peoria’s foreclosure rate stayed around 1.5 percent during the first half of 2009 and began to inch upward near two percent in the second half. As of February 2010, it was 1.93 percent. Decatur’s story is similar, with a February 2010 foreclosure rate of 1.83 percent.

Champaign-Urbana’s foreclosure rate over the past year has stayed roughly the same as Springfield’s, coming in at an even one percent in February 2010. In the same month, Springfield’s 90-day delinquency rate was nearly half that of Peoria, and was lower than that of Decatur and Champaign-Urbana.

Mary Schaefer, Illinois Association of Realtors spokeswoman, says Springfield may have a lower foreclosure rate than areas like Chicago because of heavy job losses there.

“Looking at it from an economic standpoint, the job situation really goes into play when looking at foreclosures,” Schaefer says. “Job losses that occurred in the Chicagoland area were a big factor on unemployment levels, and that affects individuals’ abilities to keep up with their mortgages.”

That theory seems to support the comparison of Springfield against Peoria and Decatur, which together lost thousands of jobs last year from Peoria-based manufacturer Caterpillar, Inc. Caterpillar cut more than 2,000 jobs in Peoria and 1,100 jobs in Decatur last year, which may have contributed to the higher foreclosure rates seen by both cities.

Terry Nuding, president-elect of the Capital Area Association of Realtors, says Springfield banks, “by and large, did not engage in the bad lending practices that caused this situation,” shielding the city from the higher foreclosure rates seen elsewhere. Nuding says there is cause for optimism behind the gloom, pointing out that the median home sale price for Springfield in 2009 was $109,000 – an all-time high that represented an increase in the median home sale price during 10 of the previous 12 months.

“Home ownership is the American dream, but losing your home to foreclosure can be considered the American nightmare,” Nuding says. “How this pans out will depend on how the economy performs, and we really don’t know how that’s going to be. It’s a situation we’re hoping improves, as new programs from the federal government and banks will give homeowners an opportunity to restructure their loans rather than sell their homes at a depressed price.”

Schaefer is optimistic as well, saying the number of foreclosures statewide will likely level off soon, and she expects home sales to continue their six-month upward trend, even as the federal first-time homebuyer tax credit expires April 30.

“We’re definitely seeing the beginning of the end of a wave of mortgage delinquencies and foreclosures,” she says. “We’re hoping that will continue and the enthusiasm in the (home sales) market continues beyond the tax credit.”

But Roberta Hahn of Springfield isn’t waiting for things to improve. She formed the American Foreclosure and Mortgage Relief Foundation when she began getting several calls from families facing foreclosure while she was working for a local charity. Hahn says the foundation will raise money to hold foreclosure prevention workshops educating people on avoiding home foreclosure. To raise the money, Hahn is establishing the Rock the House Tour, a series of big concerts in Chicago, Detroit, Cleveland, Dallas, Phoenix, Los Angeles and other hard-hit cities.

“So many people, when they miss a mortgage payment or two, don’t even open the letters from the bank because they’re afraid of what they’ll find,” Hahn says. “We want people to know there are options, that you don’t just have to sit there and lose your home.”

The first concert will be a Blues Bash held in Springfield on April 21, featuring blues guitarist Tommy Castro, Shannon Curfman and more. Proceeds from that concert will go toward a foreclosure prevention workshop on April 24, bringing together borrowers with lenders and housing counselors.

The key to avoiding foreclosure, Hahn says, is “education, education, education.”

“It’s not time to be embarrassed about loss of income or needing to modify or refinance mortgages,” she says. “All walks of life are facing foreclosure: celebrities, car dealers, manufacturers. … It is time to educate yourself, whether you’re facing foreclosure or not.  The best prevention is knowing your options.  Just don’t wait until its too late.”

For more information, visit www.afamr.org.

Contact Patrick Yeagle at pyeagle@illinoistimes.com.

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