Foreclosures Soar in Chicago Blighting Middle Class Localities

Foreclosures are soaring in Chicago blighting middle class localities. The number now reaches a staggering 20,000.

There has been an explosion in the number of failed mortgages and the worst hit has been those areas where the middle-income people reside. In 2008 the foreclosure numbers jumped to 20,000 according to a recently released report by National Training and Information Center – a non-profit body. The report showed that 75% of the loans that had gone into foreclosure came from the ARM category or similar high-risk loans.

The new foreclosure postings counted to 19,2943 in 2008 – it being double the number of 2006 that counted to 10,673. Of these failed mortgages nearly 86% were contracted during the last three years.

It seems that the loans were meant to fail from the very beginning. It has been analyzed that the high level of foreclosures of residential units in Chicago is because of “reckless lending and unregulated financial practices.” The report further added that most of these mortgages were loans that were supposed to fail and this is exactly what happened in 2008 – they did fail.

From 2006 new foreclosure postings increased by 676% in O’Hare community, 377% in Dunning, 374% in Albany Park, 366% in Lincoln Square, 344% in Irving Park, 271% in Norwood Park, 268% in Rogers Park, 256% in West Lawn and 105% in Hyde Park according to the findings of the report.

The mammoth numbers of foreclosures have left Chicago localities spotted with properties that are vacant and boarded up. This has caused the price of adjoining houses to fall. The entire area has become consequently unattractive for further investments said the representatives of the communities.

Edith Adachi is one of the many sufferers. After having resided here for 35 years she had to give up her flat to foreclosure. She is a leader of the Albany Park Neighborhood Council. When she lost her homes the family who were tenants on the second floor had also to leave. She is calling for “immediate action to help struggling homeowners and also renters.”

Senator Dick Durbin cited the report when he pressed for the passing of the bankruptcy bill. If allowed to become law it would empower bankruptcy judges to alter terms of the mortgages. Thousands would then benefit from it. Durbin said, “We’ve got to say no to the mortgage bankers and yes to the homeowners across America.”

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