Unresolved foreclosure cases pile up in Cook County

As many as 8,000 residential properties in Cook County, including 4,000 in Chicago, have been in foreclosure for at least three years without resolution, new data show, a situation that could further deteriorate already scarred communities.

Many of those properties that seem to get stuck or abandoned in the foreclosure process are in lower-income areas where annual household income is $49,000 or less, according to a study by Woodstock Institute.

Some of the at-risk houses, condos and apartment buildings are vacant, and the lenders have likely abandoned the foreclosure cases. Some continue to be inhabited while in foreclosure. Others are still in foreclosure while lenders consider short sales.

"You're stuck in this situation where nobody really has a long-term interest in the property," said Spencer Cowan, a vice president at the Chicago-based public policy and research group and one of the report's authors. "The titleholder knows it may be taken at any time. The servicer doesn't own it and may never own it. They may release the lien or just let it sit."

Mortgage servicers filed foreclosure cases against about 228,400 houses, condos and apartment buildings in Cook County between 2008 and 2012, according to Woodstock. Its research, though, looked only at the roughly 135,000 cases filed between 2008 and 2010 because of the long time it typically takes to process a foreclosure case through the county's court system.

Sixty percent of those cases studied completed the foreclosure process and were sold at auction between 2009 and 2012. The majority become bank-owned. An additional 34 percent were resolved in another way, such as through a mortgage loan modification, a short sale or a deed in lieu of foreclosure. The remaining 6 percent remained stuck in foreclosure three years after the original court case was filed, Woodstock concluded.

The study also found that in addition to the different treatment based on household income, properties in areas with a higher percentage of nonwhite residents were more likely to be sold at auction.

"Properties that went into foreclosure in lower-minority tracts seem to have had more alternative resolutions than properties in tracts with higher minority populations," Cowan said.

Woodstock's research used a random sample of 500 properties and extrapolated the findings based on the region's income distribution.

It estimated that nine of Chicago's 77 community areas contain more than 100 unresolved foreclosure cases. Most are those are in neighborhoods that bore the brunt of the city's foreclosure crisis. They are Ashburn, Austin, Belmont Cragin, Chicago Lawn, Humboldt Park, the Near North Side, Portage Park, Roseland and West Ridge.

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Unresolved foreclosure cases pile up in Cook County