Chicago: Ahead of LA and NYC in foreclosures

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Think Chicago is the forlorn second city? Think again. We've got LA and NYC beat in one department: foreclosures.

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The Center for Housing Policy recently released its website - foreclosure-response.org, which has a wealth of recent data on foreclosures and delinquent loans for metropolitan areas all over the nation. Among the data is a ranking of the 366 largest U.S. metro areas by foreclosure rate (.xls) as of March of 2010. Where did Chicago shake out? 51.

Now, 51 of 366 might not sound that bad, right? But when you look at the list, you see that the cities beating us out are munchkins in comparison. Janesville, Wis., Elkhart-Goshen, Ind. and even Lima, Ohio - the town where Glee supposedly takes place - all lie ahead of the Chicago metro area. The only real contenders ranked higher than us are metro areas like Las Vegas, Miami and Cleveland.

The Los Angeles area? It sits at 98. New York City region? 72.

And in case you thought the foreclosure problem was waning here as the economy gets better, let me stop you right there. Chicago also made the top 25 metro areas whose delinquency rates have grown over the last year. Chicago is 19 there. In 2009, our serious delinquency rate was 8 percent. As of 2010, it's hit 12 percent.

Just where within the city is foreclosure at its worst?

I took a look at the data set and found the top five Chicago zip codes-- though it's worth noting that south suburban Harvey was second on the list when you included the burbs. These areas were ranked by "Intra-metro foreclosure needs score," which is a score created by the Center for Housing Policy. It compares the number of foreclosures and delinquencies within the Chicagoland area and ranks them against each other. The highest possible score is 100, which means that community has the highest need. A score of 50 would mean a community is half as needy as a place with a score of 100.

Among Chicago zip codes, these were the worst off:

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But a Chicago Reporter analysis of where the city's foreclosure relief funds are being spent shows that they're not always hitting the most needy areas.

 ...as of mid-June the city had acquired 39 properties in the targeted neighborhood stabilization communities with the lowest foreclosure rates -- at 10.8 percent or less -- compared with 47 properties in the hardest hit communities.

For more from reporter Angela Caputo on that subject, read our June analysis of the city's use of neighborhood stabilization funds.

These needy neighborhoods may have been targeted by lenders for subprime loans. After a Reporter analysis of lending by Wells Fargo, showing that the company discriminated against African-American and Latino lenders when issuing mortgages, Attorney General Lisa Madigan filed suit against the company, along with several other big cities.

To see the complete data set for the Chicago metropolitan area and foreclosure and delinquency scores for every city zip code, download our excel file of data from the National Housing Center.

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Photo credit: Kevin Dooley

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  • I get to drive around this great city on my job and what I see is some really destoyed neighborhoods.Just what did you expect?With the types of loans and the little reguards for qualification what were you thinking? I know the bad bad bankers lied and cheated.Give that one a rest.When you stated to mandate lending,it was never going to end well.I watched as my house went up 10 to 15% and more in a year I was elated.Homes being built by the subdivision over and over in all suburbs too.All the adds for no doc loans,no job no problem.Home equity loans to go to Disney World.Lier loans,my favorite.Social justice?Here on the southside we saw this back in the 60ties with FHA.When the government pushes to the front of the line something bad is going to happen.Opps,here we go again.One more time,we'll talk about legislating social justice when you can legislate childhood cancer to go away.

  • It's pretty simple. Chicago's very segregated. Virtually all of the "worst" neighborhoods for foreclosure identified are African-American neighborhoods. So what you had were big concentrations of low income borrowers who probably were given mortgages they shouldn't have been given, so they started going down when the economy turned. And foreclosures feed on each other, meaning that once a few go, other underwater homeowners are more prone to walk (it becomes more acceptable, the neighborhood deteriorates more, crime goes up, etc.).

    Put all that together and Chicago's foreclosure woes are worse than other less segregated cities.

    I can't believe the article doesn't pick up on this. Is it un-PC to talk about this?

  • It's not un-PC to talk about it at all. In fact, the Reporter has pioneered investigations about how lending practices were applied in a discriminatory fashion.

    But I think saying "given mortgages they shouldn't have been given" puts a lot of weight on homeowners making mistakes and doesn't factor in how many mortgage giants deceived homeowners, even well to do ones, with bad loans. In fact, I just wrote a post about that same topic for today, but it's not up yet. Check back in a couple of hours and we can talk more about how foreclosures have affected Chicago's toughest neighborhoods.

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