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Today’s numbers ain’t good, either

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Illinois

* AP…

A new report says almost one-third of Illinois homes are “deeply underwater” meaning that they’re worth at least 25 percent less than what’s owed on the loans.

The report released today by Irvine, Calif.-based RealtyTrac says that represents almost 775,000 Illinois homes. The report is based on data from December.

Only Nevada and Florida fare worse, with 38 percent and 34 percent of homes deeply underwater, respectively.

Ugh.

Perhaps less talk about cartoon characters and more action on the economy is in order, governor.

posted by Rich Miller
Thursday, Jan 9, 14 @ 11:30 am

Comments

Here’s a link to a Forbes map of underwater mortgages around the country.

http://www.forbes.com/sites/erincarlyle/2013/12/17/6-4-million-still-have-underwater-mortgages-as-of-q3-2013-says-corelogic/

Check out the deep blue in Texas. Though it may seem counter-intuitive, the state has some of the toughest laws in the country regarding predatory and home equity loans.

In Illinois, they were passing out refis and home equity loans over the phone, without even an inspection.

In Texas, those strict regulations helped protect homeowners from the ravages of the bubble.

http://www.nytimes.com/2012/05/26/business/texas-lending-law-shielded-many-homeowners-from-housing-bust.html?_r=0

Comment by wordslinger Thursday, Jan 9, 14 @ 11:50 am
A third of Illinois homes? That doesn’t sound plausible. A third of mortgages, maybe.

Comment by Excessively Rabid Thursday, Jan 9, 14 @ 11:55 am
The value of my house has reduced 38% since 2008. I’m grateful the loan was paid off before this crash, but it’s still trending down with each yearly assessment.

Comment by Wensicia Thursday, Jan 9, 14 @ 12:07 pm
A trend that would be interesting to see is the credit levels in home equity lines of credit for those that didn’t get caught in the bubble, especially for the Cook County area. A before and after property tax payment view could be informative as to whether those with equity are drawing against it and at what rate.

Comment by Cook County Commoner Thursday, Jan 9, 14 @ 12:17 pm
This is sad news.

This also bodes ill for property tax collections in the near future.

Comment by Formerly Known As... Thursday, Jan 9, 14 @ 12:28 pm
I went to RealtyTrac’s web site and the trends are good. Compared to a year ago, preforeclosures are down 34%, auctions are down 54%, and bank owned are down 43%.

http://www.realtytrac.com/statsandtrends/foreclosuretrends/il

Comment by Pot calling kettle Thursday, Jan 9, 14 @ 12:46 pm
According to Census data (http://quickfacts.census.gov/qfd/states/17000.html), there are 5.3M housing units in Illinois and 68% of those are owner-occupied (3.6M). 775K deeply underwater is 22% of owner-occupied homes and 15% of all housing units so that 33% figure has to be just for mortgages. Still, not good but on the bright side, those figures suggest that 1.3M own a home with no mortgage.

Comment by thechampaignlife Thursday, Jan 9, 14 @ 1:08 pm
Rich, it is patently unfair to only call out the Governor on this issue…he should be part of the solution, but is not singularly responsible for it…c’mon…

Comment by Loop Lady Thursday, Jan 9, 14 @ 1:11 pm
Wordslinger….

Thanks to something that happened back when it was the Republic Of Texas the Texas state constitution made home equity loans illegal until it was amended in the 90’s…

Comment by OneMan Thursday, Jan 9, 14 @ 1:16 pm
I don’t argue home values are low, but breaking down RealtyTrac’s reporters is trivial. Look at their numbers for foreclosures, then look at the raw number of chancery cases at a county clerk’s office or even county POPULATION numbers that exist for those same years and it will become clear that RealtyTrac’s numbers are balderdash. A responsible reporter can’t even call them rough estimates. I’ve called them to talk about this and they have no explanation for why their numbers don’t align (even remotely) with counties’ own. They’re a business that thrives on scare tactics and has made a living the last eight years sending inaccurate and melodramatic numbers and analysis to the AP and other newswires. Please stop citing RealtyTrac, people. They’re a crock. If you don’t believe me, it’d be worth your time to verify their numbers with your clerk’s office (and possible reviewing hundreds of cases by hand, like the old days) and see for yourself.

Comment by ChaiseLounge Thursday, Jan 9, 14 @ 1:29 pm
Wensicia - Thursday, Jan 9, 14 @ 12:07 pm:

The value of my house has reduced 38% since 2008

Has your assessed valuation dropped by 38% or anything even close?

We have the same issue in downstate rural Illinois
but the assessed valuations are rarely if ever reduced.

But no politician at the state or local level will even begin to investigate and analyze this issue.

Comment by Federalist Thursday, Jan 9, 14 @ 1:50 pm
=== Please stop citing RealtyTrac, people. They’re a crock. ===

The RealtyTrac numbers are close to the CoreLogic numbers reported in 2013.

Either they’re both in on the conspiracy, or both their numbers are fairly accurate.

Then again, this is Illinois. Maybe the county numbers and our record-keeping are the numbers that are off.

Comment by Formerly Known As... Thursday, Jan 9, 14 @ 2:29 pm
“This also bodes ill for property tax collections in the near future.”

No, local property tax collections will probably do just fine. But property owners, not so much. As taxable values of the properties decrease (and they are), the tax RATES (in property tax cap counties - which is most of Northern IL) are skyrocketing. We are seeing all sorts of places where tax rates are now well in excess of $9.00 per $100 of taxable value.

Btw, a tax rate of $9.00 per $100 of taxable value translates into an effective tax rate of 3 percent of the market value of your property.

Basic formula is:
Step 1: (Assessed value - exemptions (if any)) = taxable value.
Step 2: (Tax rate / 100) = millage rate
Step 3: Taxable value x Millage Rate = *Property tax bill amount.

* = Calculations change if property is located in a TIF District, Enterprise Zone, or Special Service Area.

But the short story is that IF you are in a tax capped county and your assessed value decreases because your house is worth less, your tax rate increases so the tax capped local tax districts get the same amount of money requested as they got last year. And maybe a slight increase on top of that.

Comment by Judgment Day Thursday, Jan 9, 14 @ 2:50 pm
“I went to RealtyTrac’s web site and the trends are good. Compared to a year ago, preforeclosures are down 34%, auctions are down 54%, and bank owned are down 43%.”

Well, they’re ‘better’, but not really. I’m certainly no defender of the ‘crooked, lying, thieving banksters’, but in this case, they’re caught in a storm and they have no real out.

The report doesn’t really address the ‘elephant in the room’, which is that the banks really can’t afford to take all those non-performing loans back onto their books. They don’t dare, because then they would actually start to have to ‘mark to market’ on all the ‘failed’ mortgages that have been issued since the early 2000’s, and taking THAT step has consequences nobody anywhere (including the fed’s) want to get anywhere near.

If the banks are forced to take this stuff back onto their books, imagine what it does to their capital base if they have to take an average 20% reduction on all mortgages being carried on their books, or worse, having been packaged and sold to the fed’s.

The numbers are down, because they simply can’t be allowed to go up.

Comment by Judgment Day Thursday, Jan 9, 14 @ 3:04 pm
==Has your assessed valuation dropped by 38% or anything even close?==

Yes. I live in Waukegan.

Comment by Wensicia Thursday, Jan 9, 14 @ 4:10 pm