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Foreclosures Are Accelerating in Evanston

The number of foreclosures filed on Evanston properties has been rapidly increasing. According to data reported by the Woodstock Institute, the number of foreclosure filings was 96 in 2005, 121 in 2006 and 179 in 2007. Between 2005 and 2007, the foreclosure filings increased by 87 percent.

The number of foreclosure filings jumped again in the first six months of 2008. RealtyTrac, Inc. provided data to the RoundTable showing there were 143 foreclosure filings in Evanston Zip codes 60201 and 60202 during the six-month period Jan. 1 through June 30, 2008. This was up from 95 foreclosure filings for the same six-month period in 2007, an increase of 51 percent.

African-Americans More Likely to Receive
High-Cost Loans

“African-Americans were nearly five times as likely as white borrowers to receive high-cost home loans in Evanston in 2006,” concluded an analysis published in The Chicago Reporter on May 5. “Of the 368 home purchase, home improvement or refinance loans acquired by black homeowners, around 48 percent of them were considered high-cost or subprime. … In contrast, of the 1,529 home loans acquired by white homeowners, only about 10 percent were high-cost.”

The analysis also concluded that about 57 percent of all mortgages granted in an area south of the canal and west of Green Bay Road in Evanston were high-cost loans, meaning that the annual percentage rate was three or more percentage points higher than the rates for United States Treasury Bonds for a comparable period.

Law Intended to Protect Mortgage Borrowers Takes Effect

A new law, Public Act 95-0691, intended to protect borrowers from obtaining risky mortgages and from fraudulent lending practices, became effective July 1. According to a prepared statement issued by Governor Rod Blagojevich’s office, the new law “limit[s] the types of loans mortgage brokers may offer their clients by making sure that the proposed loan best meets the financial need of the potential homeowner. Mortgage brokers must verify that a borrower will be able to pay the costs of the loans, including principle, interest, insurance and taxes. Mortgage brokers will be held to a higher standard than they have in the past and must act in the borrower’s interest, by fully disclosing material facts about the loans being offered.”

The Governor’s office also said, “A first-time home buyer or anybody refinancing an existing mortgage in Cook County must be recommended for counseling if their loan is interest-only; has negative amortization, or points and fees that total more than 5%; or the loan is an ARM [adjustable rate mortgage] of three years or less.”

The law is intended to curb some of the abuses that are the subject of a complaint filed on June 26 by Illinois Attorney General Lisa Madigan against Countrywide Financial Corp. The complaint alleges that Countrywide made loans to persons whose income was not adequate to repay the loan, that it made loans without requiring adequate documentation, and that it engaged in other improper practices.

More Homeowners Taking in Boarders

Consistent with a national trend, the number of homeowners in Chicago’s northern suburbs choosing to take in “boarders” – as a strategy to defray housing costs – has been increasing, said Jackie Grossmann, director of the Homesharing Program for Interfaith Housing Center of the Northern Suburbs. “A sluggish housing market, increased taxes and higher utility bills have led many homeowners to consider renting their spare bedrooms for additional income,” she said.

Ms. Grossman told the RoundTable that Interfaith has traditionally matched elderly homeowners with a boarder. Recently, there has been a shift in which middle-aged women who are disabled or divorced are choosing to take in a boarder, she said. “Many have for-sale signs in their yards and are unable to sell their homes,” she said. “In order to make mortgage payments, they are willing to rent out a room or rooms.”

Ms. Grossman said Interfaith matches more than 40 homeowners with renters a year, about one-half of whom are in Evanston. For more information about Interfaith’s Homesharing Program visit www.interfaithhousingcenter.org or call 847-501-5732.