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The best foreclosure listings in Chicago, Illinois added more properties during the month of March 2011 compared with February 2011. According to housing market analysts, although foreclosure numbers have declined in most U.S. markets year-over-year, the residential property industry is still in trouble and the drop has more to do with delayed procedures rather than an improving market.

For March 2011, Chicago foreclosure listings expanded further as more residences entered the foreclosure process. A total of 10,821 residential units in the metro area were under some stage of foreclosure during the month, representing a surge of 23% compared with February of this year. Statewide, month-over-month figures were also up, although March foreclosure totals were down from one year ago.

Foreclosure listings in Illinois increased in March 2011 when compared with February 2011 figures. A total of 12,053 residential units were under some form of foreclosure during the month, up by 25% from February. Among these properties, 7,428 received default notices, while 1,919 were scheduled for auction. A total of 2,706 houses, on the other hand, were repossessed by banks and were classified as bank-owned properties. When compared with March 2010, the total actually declined by 15%. However, analysts stated that this is not a sign of an improving housing market, but is more a result of delayed processing as lenders try to deal with backlogs.

According to analysts, judicial states like Illinois were affected by the processing delays more so than non-judicial regions. The best foreclosure listings in Illinois showed that 20,991 homes were issued default notices during the January-March 2011 quarter, while 4,014 residences were scheduled for auction. Meanwhile, 8,068 were taken back by lenders during the three-month period.

The huge year-over-year drop in the number of bank and VA foreclosures in Illinois and in other judicial states showed that lenders are taking their time foreclosing on properties, analysts have stated. The documentation controversy that temporarily halted foreclosure actions in the latter part of last year also led to federal investigations which, in turn, prevented foreclosure actions from getting completed. This, analysts further asserted, was the cause of the lower foreclosure numbers.

For the rest of 2011, analysts are predicting that the best foreclosure listings will rise again as lenders work through their backlogs and more distressed properties enter the market. Housing market observers are predicting that lack of homebuyers, depressed housing prices and tight lending standards will continue to hurt the residential market of the state and the whole country.

The main tool used by real estate professionals in appraising properties in foreclosure listings is sale prices of houses in the area. They will compare the market prices of similar houses in nearby areas to houses in foreclosure listings that they are appraising to get a comparable amount.

However, with sales volume declining rapidly, there are fewer houses to be used as comparison to determine the market value for houses in foreclosure listings.

As of January 2009, new homes sales dipped to a 45-year low while sales of existing homes declined to a lowest level in 12 years.

The difficulty of appraising houses in foreclosure listings has made it hard for distressed homeowners to refinance and buyers to acquire homes.

Because appraisals are based on market value estimates at given time, a reliable baseline is hard to determine with prices of distressed properties in foreclosure listings falling rapidly.

Miller Samuel President Jonathan Miller pointed out that credible home values are hard to determine and closed sales are becoming irrelevant because they are lagging behind the market.

Some real estate appraisers who cannot use good sales figures opted to consider contract prices when appraising homes, especially those in foreclosures. These contract prices are the amount first agreed between the seller and the buyer. However, there may be flaws on this way of appraisal because many sales do not close.

According to Miller, foreclosure listings prices are not reliable because majority of sellers overvalued their properties.

This tendency of sellers to overestimate the market value of their properties is called by Eric Johnson, a Columbia business professor, as endowment effect. This so-called endowment effect causes homeowners to overprice their properties, and as a result, a big discrepancy between the sale price and list price is created.

With foreclosures wreaking havoc on the housing market and more and more homeowners finding difficulty refinancing their mortgages or buying a new home, appraisers are feeling the pressure to be conservative on their estimates.

Real estate appraiser Joni Herndon explained that lenders prefer appraisals to be at the lowest end of the price range.

In the event that lenders reject the appraisal, they can call for a second appraisal, or the seller can reduce the price of the property or the buyer could produce more cash.

Another appraisal option is automated valuation model that sets home values using a mathematical formula.

Finding the right appraisal is deemed important now that the federal government has unveiled its Homeowner Affordability and Stability Plan which offers refinancing and loan modification plans.

Relief, that the housing bill signed by President Bush last week is to provide to close to 400,000 home owners facing foreclosures by getting their loans refinanced to loans of lower values, might be too late for many already in some stage of the foreclosure process.

The state of Illinois already has programs that are helping borrowers who are part of the Illinois Foreclosure Listings.

FHASecure, the program run by the Federal Housing Administration has seen around 15,000 home owners from Illinois refinancing through them. This program lets home owners with good credit, who are expecting their interest rates to rise to refinance their loans. Borrowers who have ended up missing on even one of their payments do not qualify. Last month, the Department of Housing and Urban Development issued a ruling, which would allow into the program, borrowers with bad credit too. Only lenders who have been approved by the government can pass FHA loans.

Homeowners Assistance Initiative which began in February is along the lines of FHASecure, set up by the state of Illinois with a pledge by 8 lenders to generate three hundred and ten million dollars in FHA re-finances. Since inception about twelve refinances have gone through or are about to very soon. About 12 others who approached for help had loans with a lender who was part of the 8 who were in the program, and the terms of the loans were modified making them comparatively affordable.

Five of the lenders in the program are based out of Chicago. They are Townstone Financial Inc., Professional Mortgage Inc., Chicago Bancorp, Perl Mortgage and Guaranteed Rate. The Alliance Credit Union in Rockford, the National Bank of Commerce, 1st Advantage Mortgage LLC and Berkeley make up the remainder of the eight.

The Neighborhood Assistance Corp. of America, a non profit organization, works with borrowers and lenders to set up revised payment plans or modifying terms of the loans. Their Chicago office conducts workshops twice a month, attracting close to six hundred local homeowners.
For working on new loan terms, attending the work shops is a must.

Start your search for Illinois Foreclosure Listings by Top Cities:

• Chicago Foreclosure Listings
• Rockford Foreclosure Listings
• Springfield Foreclosure Listings

The foreclosure filings in Illinois rose by 41% in June this year. Shocked by the disturbance in the U.S. realty market and the slow down on the economy, the amount of Illinois home owners being affected by foreclosures increased by 40% compared to June last year. On a national level, the foreclosures rose by over 50%.