Area foreclosures drop, but deserted homes hurt neighborhoods

2013-06-16T07:00:00Z 2013-06-17T06:33:04Z Area foreclosures drop, but deserted homes hurt neighborhoodsBy Kenneth Lowe |

BLOOMINGTON — The housing market is on the mend and more help is available for those struggling to keep their homes in McLean County, but foreclosed and abandoned houses continue to hurt neighborhoods.

There were 122 foreclosures filed in the first quarter of 2013, down slightly from 130 in the first quarter of 2012, according to data from the McLean County Recorder’s office. Annual filings have steadily declined since 2010, when there were 586, the most in a single year over the last decade. The county had 481 filings in 2012 and 508 filings in 2011.

“We’re seeing continued improvement in the foreclosure situation in McLean County,” said Ken Springer, director of research and client services at the Economic Development Council of the Bloomington-Normal Area. “From a financial standpoint, growth in the housing market fuels quite a bit of additional economic activity ... and helps keep our businesses here healthy in the Twin Cities.”

Part of the reduction in new foreclosures may be that the subprime mortgages that hobbled the housing market leading up to the recession have largely been resolved, Springer said.

But homes already in the midst of foreclosure are still working through the system, and neighborhoods must put up with the often abandoned and unkempt properties waiting to be resold. Bloomington’s west side has a number of them, said Valerie Dumser, a board member of the West Bloomington Revitalization Partnership and resident of the area.

“It doesn’t do much for the values of our homes,” Dumser said. “It doesn’t say much for the neighborhoods. People don’t want to move into a neighborhood that looks empty and neglected.”

Some of those empty homes have been sitting for years, Dumser said. That may be because McLean County foreclosures now take an average of 20 months to be resolved — twice as long as before the housing crisis, according to an ongoing study by Diego Mendez-Carbajo, associate professor of economics and chairman of the Department of Economics at Illinois Wesleyan University. Though fewer new foreclosures are being filed, the ones held over from previous years are still numerous.

The process begins when a homeowner falls behind on mortgage payments. Banks file an order to foreclose on a house in the courts, which a homeowner may contest. If the mortgage remains unpaid and the court finds in favor of the bank, the property is put up for sale by the McLean County Sheriff’s Department. Later, it’s often bought back by the bank that issued the loan.

A backlog of foreclosure cases working through the court system from previous years contributes to the longer process, said Fred Drake, chairman and CEO of Heartland Bank in Blooming-ton.

“Certainly the court schedules are crowded … plus there’s been increased scrutiny, and there should be,” Drake said. “There are a lot of protections that are in place and the courts are serious about that.”

Just as the long waits hurt neighborhoods, they also increase costs for banking customers, Drake said. Homes that have been abandoned or poorly kept will be worth less, and the costs to banks of pursuing foreclosure are passed on to consumers.

“The more costly (foreclosure is for banks), the more costly credit becomes, and in some cases it may be-come harder to grant those kind of loans,” Drake said.

The good news is that those facing foreclosure now have more help available. In March 2012, the McLean County Circuit Court began mandatory mediation in all foreclosures cases in an effort to avoid foreclosure and better educate homeowners on their rights, said Chief Judge Elizabeth Robb. Before, such matters were settled with lawsuits.

Mediation gives homeowners access to pro bono legal advice from law students, and can help homeowners broker a deal with their lender to deed back their house in lieu of foreclosure; improve loan terms; or “short sell” a home at a loss under an agreement with their lender to settle the out-standing debt.

“For a lot of (homeowners in foreclosure), that’s their first opportunity to get legal ad-vice,” Robb said. “They have that chance to talk … about what their legal rights are.”

The court’s mediation process also tries to steer homeowners toward state and federal aid that wasn’t available before the housing crisis. Some are referred to groups like Mid Central Community Action for fore-closure counseling.

“We’re trying to help people stay in their homes who want to stay in their homes and who can afford to stay in their homes,” said Angela Frazier, director of finance with MCCA. “Depending on the route they choose, we lay out what they need to do and what they can expect.”

MCCA and groups like it draw from resources like the state’s Foreclosure Prevention Network, and programs like Illinois Hardest Hit Funds. Since April 2012, Illinoisans facing foreclosure who can show they have lost 20 percent of their income may qualify for either a one-time payment of all mortgage arrearage, fees and penalties, or 18 months of mortgage payments.

That program helped keep Gayle Boop, 64, of Chenoa in the two-bedroom home she bought three years ago for $33,000. When she lost her job last year, she couldn’t make her mortgage payments and faced foreclosure. She connected with MCCA, and after a battery of questions and paperwork, found she was qualified for the Illinois Hard-est Hit Funds program.

“It’s hard when you’re a 64-year-old woman with no husband and you’re just living off your Social Security,” Boop said. “(The program) gave me hope that there’s somebody out there who’s willing to help you, that you don’t have to be alone.”

The hardest part of connecting people with that aid has been getting the word out, said Kathy Shubert, MCCA homeownership coordinator. Workshops haven’t been successful, possibly because people are seeking more confidentiality.

“With foreclosure intervention, people are embarrassed,” Shubert said. “They don’t want family and friends to know. They don’t know where to go.”


For help

Mid Central Community Action Inc. provides foreclosure counseling — 309-834-9242

The Illinois Foreclosure Prevention Network connects Illinoisans facing foreclosure with local resources. —

The Illinois Hardest Hit Funds program provides mortgage payment assistance —

Illinois Legal Aid has a video series explaining foreclosure on its website —

McLean County foreclosures

Year; Total

2003 - 316

2004 - 328

2005 - 358

2006 - 447

2007 - 484

2008 - 500

2009 - 538

2010 - 586

2011 - 508

2012 - 481

2013 - 198*

* Data available as of June 11.

Source: McLean County Recorder’s Office.

Copyright 2015 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(7) Comments

  1. Smartone
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    Smartone - June 17, 2013 7:17 am
    BC you are absolutely 100% correct. The medical costs will bankrupt this country. For those of you that don't believe it, go to the ehealthinsurance website and run some phony numbers to get a quote online for policies. The cost is astronomical and many countries are much better than ours for healthcare. Healthcare here stinks compared to other developed countries. For profit healthcare is what will bring this country to its knees just like the housing crisis almost did in 2008.
  2. BC
    Report Abuse
    BC - June 17, 2013 6:30 am
    What cost structure do you refer to, the bulk of business and corporations pay no tax on income. In Illinois 7% of the state revenue comes from businesses and corporations. I have a close family member who owns a small business so I am aware of costs involved. The health care reform Obama favored isn't what was passed, he ask for single payer insurance like Medicare. For your information Medicare works nicely on its own. The problems come from insurers. For profit medical will bankrupt this country. That system is why your medical is so high and part of the reason insurance is so high. Medicare and Medicaid is faltering due for profit medical. Pharmaceuticals cost up to 10 times more here than in other countries that regulate profit and offer single payer, non-profit insurance. The major car makers cited the cost of medical, not salary, as the root cost of their financial woes. The health care bill does nothing to address profit, that is its biggest shortfall. It is also nearly a carbon copy of the program Romney hailed as a major triumph in Massachusetts. Jobs are available here in Illinois and people are working. Like the rest of the nation most are trying to support families on jobs that once were for teenagers and housewives earning "pin money". The health care bill is a convenient excuse. Rein in for profit medicine, insurance costs and greed by pharmaceutical companies before the reform will be effective. It may not be perfect but it is a start. Another note here, medical research, the excuse for our high costs, is being done in a greater part in other countries. Our health care ranks a 37th worldwide a bit above developing countries. Drink your tea and enjoy. Not all Republicans support the Tea Party agenda either. Actually I wish they would pass all the hair brained bills submitted by the Tea Party. They knew most of them wouldn't pass and actually didn't want them to. They proposed them knowing that so they could complain about the administration. Had their actions actually been signed into law even their most staunch followers have turned on them by now.
  3. Yepppppp
    Report Abuse
    Yepppppp - June 16, 2013 11:52 pm
    Gullible. Tea. Hate. All words to try and discourage people from posting.
    BC You are 100% correct. If you have a house that is abandonded, in your neighborhood. Mow the law and plant some flowers. HELP YOURSELF out.
    As for the economy. Yes the economy crashed under Bush. Obama hasn't done much even with 2 years of a Democrat controlled house. They passed healthcare without even having time to read the bill. Businesses are NOT hiring because of the cost structure with the healthcare bill. And if you want to complain about evil business trying to make money, go ask your spouse if you can start a business but not make money and post the result here!
  4. Jose
    Report Abuse
    Jose - June 16, 2013 9:10 pm
    Living in his mommy's rented basement doesn't make er qualified to speak on this topic, or indeed any topic.

    Yet the lying conservative hot air keeps a-spewin'.
  5. logical responder
    Report Abuse
    logical responder - June 16, 2013 11:25 am
    earlyriser, we get nowhere when the thinking and talking are about the topics you address. This just keeps the hate radio and hate tv "news" channels in buisness. They love this kind of mentality. Sells lots of advertising and keeps the hannitys, limbaughs, becks ect in front of cameras. This type of thinking is boring because it is simply restating the party line.
  6. BC
    Report Abuse
    BC - June 16, 2013 9:58 am
    Climbing out of a huge hole takes time. Note the steady drop by the charts. We bought 2 useless wars on the country's Visa card, that interest alone drastically impacts the national debt. Like all presidents Obama isn't always right on everything. Then he only signs the legislation he doesn't create it. Until we rid ourselves of the obstructionists in the house nothing will move much. Nothing for the good of the country will ever get house approval or passage, that isn't their goal. Protecting their financial interests and keeping the country down for political reason is their sole purpose. You ask for this so live with it. Hopefully the country is bright enough to correct this at midterm. The gullible have switched their beverage choice to tea.
  7. BC
    Report Abuse
    BC - June 16, 2013 8:58 am
    The best defense for people living in these neighborhoods is to do at least minimal mowing themselves. Don't wait for the bank or you will watch weeds grow. The city can threaten the lending institution and even try to charge them, usually doesn't happen. Complaints accomplish little as already observed. No, it's not your job or your responsibility, but either the people nearby step up or look at it and fume. Take your choice. It will be years before a new owner is found, a sale is made or an auction is held.
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