The nation's foreclosure rate soared 75 percent for the full year of 2007, with Illinois among the top 10 states with the highest percentage of homes in some state of foreclosure.
RealtyTrac, an Irvine, Calif.-based online data firm, is expected to report today 2.2 million foreclosure filings -- including default notices, auction sale notices and bank repossessions -- were reported on 1.3 million properties nationwide during the full year of 2007, an increase of 75 percent compared to 2006.
Illinois posted 90,782 filings against 64,310 properties in 2007 -- 25 percent more than in 2006, RealtyTrac data said.
Besides Illinois, California, Colorado, Ohio, Georgia, Arizona and Indiana all posted foreclosure rates among the nation's top 10 in 2007. They posted more than 1 percent of their households entering some stage of foreclosure during the year. Illinois had 1.25 percent, while the national average was 1.03 percent, the data showed.
"Illinois, just like a lot of other states, reached the top 10 because many people have adjustable rate mortgages and they were unable to pay them," said RealtyTrac spokesman Daren Blomquist. "And the success of the loans often are based on homes appreciating in value and the homes in Illinois have been basically flat."
If the year-end wrap-up numbers of foreclosures nationwide were grim enough, look at what the month of December brought. A total of 215,749 foreclosure filings were reported in December, up 97 percent from December 2006 and bringing the fourth-quarter total to 642,150 filings on 527,740 properties -- up 1 percent from the previous quarter and up 86 percent from the fourth quarter of 2006, RealtyTrac data shows.
"It's not good for these poor people, but this does provide opportunities for investors," said Doug Crowe, director of Lombard-based Springboard Group, a real estate investor education academy.
As the foreclosure numbers increase, fewer are able to sell at the county sheriff auction sales. Often foreclosed homes have a large mortgage due, with additional liens, back taxes, attorney and other fees attached. The homes then become too expensive to sell at such auctions and, many times, are returned to the mortgage lender for disposal, Crowe said.
That leads these banks and mortgage firms to unload the homes at greater discounts.
"So if you have a property that has a mortgage of $120,000, but it's valued at $130,000, no one wants it at auction," said Crowe. "The bank will get it back and discount it, possibly around $90,000."