Jump over the site's section navigation.

McLean County Foreclosures Slower To Resolve

Wed, 03 Jul 2013 13:35:41 CDT
By: Charlie Schlenker

Foreclosures are taking a lot longer to resolve in McLean County than they used to. Illinois Wesleyan University Economist Diego Mendez Carbajo says in 2010 the average time from the filing of a notice of delinquency to an auction of the home was about ten months. Now Carbajo says the average is about 20 months.

"Now procedures for foreclosure are more thorough. They are more deliberate. They even have mediation process available to homeowners where the homeowners get to meet with the lenders, the banks to see if they can negotiate or renegotiate the terms of the loans."

Carbajo says two other factors may also play into the longer average time. First, the robo-signing scandal caused many lenders to hold up a large number of foreclosures to make sure the property forfeitures were justified. That backlog is now declining.

"This is making the whole process taking longer, which in a sense is a good piece of news, right? If you are going to lose your residence, it had better be a thorough process."

And starting in 2010, the law changed to eliminate the private foreclosure auction process. The Sheriff's Department conducts all such auctions now. The change was billed as a way to eliminate the private profit motive for foreclosure auctions and remove any incentive for hasty resolution. The Sheriff's department monopoly does, though, receive a 600 dollar fee for each aution. Carbajo says IWU is continuing analysis to see if the values of the homes being auctioned are affecting the average time to resolution. Previous data suggested moderate income homeowners defaulted early in the home mortgage crisis and higher income owners entered foreclosure later in McLean County. The number of foreclosure filings declined in 2011, picked up again in 2012 as the mortgage industry recovered from its robosigning scandal slowdown. So far this year, McLean County foreclosures are trending downward, though a complete picture is not available.


Support Your Public Radio Station