Chicago-area foreclosure auctions hit new high

[The Northerner]

More Chicago-area homeowners lost their homes to foreclosure in the first three months of the year than in any quarter in the past five years. This disturbing statistic raises doubts about the effectiveness of mortgage loan modification efforts and could put more downward pressure on property values.

Within the six-county Chicago region during the first quarter, 9,302 homes went through a court-ordered auction, the last step in the foreclosure process, and 95 percent of those properties were taken back by lenders. Within the city of Chicago, almost 3,500 homes went to auction, and 95 percent of those also became bank-owned, according to data to be released Thursday by Woodstock Institute, a Chicago-based think tank.

A portion of the increase in auctions can be attributed to various moratoriums lenders put in place during the holiday season and while they evaluated homeowners either for the federal government's Home Affordable Modification Program or their own internal programs. However, it appears clear lenders are now stepping up efforts to push properties through the foreclosure system as homeowners fail to qualify for loan modifications or default again.

More than half of all loan modifications fell 60 days or more past due by nine months after the initial modification, the federal Office of the Comptroller of the Currency said in a report last month on fourth-quarter mortgage performance.

Lenders "put a halt on the process, but did it help in the end?" said Geoff Smith, Woodstock Institute's senior vice president. "Are these foreclosure prevention programs working? If HAMP was working, you'd have less completed foreclosures. More people lost their homes. That's undisputed."

Read more: http://articles.chicagotribune.com/2010-04-29/classified/ct-biz-0429-auctions--20100429_1_foreclosure-auctions-foreclosure-process-loan-modifications