38% of Chicago Area Homes Underwater
(Chicago Breaking Business) — Almost two of every five owners of single-family, detached homes in the Chicago area were underwater on their mortgage in December, an all-time high and far outpacing national trends, according to data to be released by Zillow.com Wednesday. The realty Web site found that 38.6 percent of all single-family detached homes had negative equity, meaning homeowners owed more on the homes than the properties were worth in the fourth quarter, compared with 32.9 percent in the third and 28.3 percent a year earlier. Nationally, the negative equity rate was 27 percent in the fourth quarter, up from 23.2 percent in the third quarter. To some extent, the escalation of negative equity is the result of lenders temporarily curtailing foreclosures the last several months amid investigations of their internal foreclosure procedures. While declining home values raise negative equity, completed foreclosures tap it back down because the home becomes lender-owned. Also figuring into the situation in Illinois is the fact that it’s a judicial state, meaning foreclosures have to navigate through county courts, giving homeowners longer to try and save their home. However, it also lengthens the amount of time it takes for foreclosed properties to return to the real estate market for resale.