Foreclosure filings rise in Highland Park after two-year decline

HIGHLAND PARK — An higher number of Highland Park homeowners fell far enough behind on their mortgage payments in 2012 that lenders and mortgage service companies lowered the boom in Lake County Circuit Court.

After two years of decline off the high of 155 foreclosure filings in 2009, the number of new filings picked up again last year, according to newly released data from the Woodstock Institute.

Last year, foreclosures were initiated on 147 residences in Highland Park, a 23 percent increase over the prior year. The figure was five times the level seen eight years ago, before the home mortgage crisis moved beyond the subprime market and took hold in affluent north suburban communities.

Out of the 147 cases, foreclosures were completed on far fewer homes. Still, the 45 Highland Park homes that went to auction last year was up 67 percent from a year earlier. Across Lake County, foreclosure auctions were up 116 percent, to nearly 3,400 cases.

Housing experts believe the recent upturn in auction activity stems from the moratoria that many lenders put in place after a “robo-signing” scandal came to light in 2010. Companies halted foreclosures that were in the works after it was revealed some firms, overwhelmed by the volume of cases, were taking shortcuts that in some cases violated the law.

“We saw a precipitous drop in foreclosure auctions while the robo-signing scandal was being investigated,” said Spencer Cowan, vice president of research at the Woodstock Institute, a nonprofit organization that works in areas of fair lending, wealth creation and financial systems reform.

“Now that the case has been settled with new standards for foreclosure processes in place, service (firms) are working through the backlog,” Cowan added. “This will almost certainly lead to an influx of vacant properties on the market.”

Woodstock’s housing researchers say mortgage lenders seem more willing to pursue alternatives to home foreclosure, such as a “short sale” or a “deed-in-lieu” of transaction to avoid a lengthy legal process that likely will end in the bank repossessing the property.

In a short sale, the bank allows a delinquent homeowner to sell the home for less than what is owed on the mortgage. In the other option, the owner turns over the deed and vacates the premises.

The City of Highland Park’s community development department offers a list of resources for homeowners who are having trouble paying their mortgages. The city urges homeowners not to ignore mail that comes from the lender and to call the lender as soon as possible when a mortgage payment is missed.

Community Partners for Affordable Housing has acquired some foreclosed and distressed properties in Highland Park that otherwise might have become a neighborhood blight.

“When we find a home ... that we can rehab and improve for the neighborhood and the street at the same time, (then offer the) home for a low-income local household, that is a win-win-win for everyone,” said Amy Kaufman, director of community relations for the organization, which owns 43 units of permanently affordable housing.

The organization serves Highland Park and Lake Forest and will soon move into Evanston.

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