FOR IMMEDIATE RELEASE
Chicago Region Foreclosures Skyrocket in 2006
Says New Woodstock Institute Analysis
A new analysis of 2006 foreclosure
data by Woodstock Institute shows that foreclosure filings have
skyrocketed, reaching their highest point in recent memory.
The spike in foreclosures is in
large part a product of the ongoing crisis in the subprime lending market. This
crisis has been fueled by a number of factors including the growing
popularity of a variety of risky adjustable rate mortgage (ARM) products that
allow borrowers to have low initial
monthly payments that reset to much
higher levels after a few years.
These loans were increasingly
popular in 2005 and 2006, with the share of mortgage originations that were
option ARM loans increasing from 8.4 percent in 2005 to 12.3 percent through May
The popularity of these complicated
and risky products combined with loose mortgage underwriting standards that
often include no documentation of borrower income have driven
foreclosure rates to record highs, says Geoff Smith, Woodstock Institute research
The report shows that:
*There were nearly 29,000
foreclosures in the Chicago region in 2006the highest level of foreclosure in the
last eight years.
*Region-wide, foreclosure saw a one
year increase of over 36 percent between 2005 and 2006.
*The City of Chicago had 18.4 foreclosures per 1,000
mortgageable properties. Within the city,
however, there was substantial variation in foreclosure levels by
neighborhood.. Neighborhoods in the south and west sides of the city had the highest
levels of foreclosure in the region.
*South Suburban Cook had nearly 34
foreclosures per 1,000 mortgageable properties, a number nearly 2.5
times greater than the regional average.
The full report is available online
Smith, Research Director at Woodstock Institute at (312) 427-8070 or