By Becky Yerak
April 30, 2008

In a sign that the foreclosure problem could get worse before it gets better, six area counties saw a rise in the 60-day delinquency rate for mortgage payments.

Mirroring national trends, Cook, DuPage, Kane, Lake, McHenry and Will Counties have seen a bounce in the number of borrowers at least 60 days past due on their mortgages, a precursor to foreclosure.

Cook County has gone from a 2.07 percent delinquency rate in early 2005 to 3.25 percent at the end of 2007, and Lake rose from 1.44 percent to 2.22 percent, according to TransUnion data provided to the Tribune.

The national 60-day delinquency rate is expected to climb from nearly 3 percent in the fourth quarter of 2007 to at least 4 percent by year’s end, the credit-data firm said in a study released Tuesday.

The delinquency report coincided with first-quarter RealtyTrac numbers showing that U.S. foreclosure filings rose 112 percent year over year. Illinois, ranked eighth with 23,215 foreclosures, saw a 53 percent increase.

Foreclosure proceedings generally begin when an owner misses at least three mortgage payments and the lender files for a judgment. It usually takes seven months from that filing for a property to go to auction.

Several housing watchers weren’t surprised by rising numbers of mortgages at least 60 days delinquent.

"It’s a clear indication that foreclosure problems are not abating," said Geoff Smith, research director for Chicago-based housing researcher Woodstock Institute.

He was struck by DuPage’s 60-day delinquency rate, which rose from 0.82 percent to 1.73 percent in one year.

"DuPage is not an area traditionally with high levels of foreclosures, and while the raw numbers are smaller, it indicates this is a spreading issue," Smith said. "Loans 60 days delinquent in the fourth quarter can become the foreclosures of the first quarter."

DuPage housing advocates said the delinquency numbers reflect what they are seeing on the ground.

At the DuPage Homeownership Center, 46 clients signed up for foreclosure-prevention counseling in 2005; that number rose to 54 in 2006.

The figures rose each quarter in 2007, and by year’s end 133 new clients sought counseling. The growth has continued in 2008, with 44 new clients in the first quarter.

"We see people who run the gamut from they might not be behind yet but storm clouds are gathering, to people whose homes are close to a sheriff’s sale," said Dru Bergman, the center’s executive director. "Sixty days behind isn’t beyond repair, but the sooner you seek help, the more remedies [are] available."

Indeed, unlike, say, credit card bills, mortgage payments are difficult to catch up on after 60 days.

"You miss three credit card payments, and you might fall a few hundred dollars behind. But you miss two mortgage payments, you can fall a few thousand behind and be much less likely to be able to pay it back," said Ezra Becker, principal consultant in TransUnion’s financial-services group. "Sixty days is a sign of a serious problem on a mortgage loan."