Chicago, the nation’s second largest home mortgage market and the largest market for minority home buyers, is a stark example of the how problems in the home lending industry have bought about an unprecedented foreclosure crisis and declines in home values that have triggered a widespread economic recession.
Subprime home loans and predatory lending practices have plagued the lower-income and minority neighborhoods on Chicago’s South and West sides since the 1990’s. By the early years of the last decade, high concentrations of home foreclosures began to occur in these neighborhoods. Yet few took notice as the cycle of subprime mortgage lending and home foreclosure was largely confined to the poorer areas of town.
By the middle of the last decade the practice of packaging risky, poorly-underwritten home loans into investment products had become a ticket to huge profits for mortgage lenders and investment firms. Wall Street, the major national banks, and independent mortgage lenders all rushed into the hot market.
The report documents the results of this practice: home foreclosure filings in Chicago doubled between 2006 and 2008 with the problem spreading to previously unaffected middle-class neighborhoods. In 2009, foreclosures in Chicago increased even more as the economic recession bought on by irresponsible lending practices took their toll. (Click on map to enlarge)
Chicago Foreclosure Reports:
2009 Top 30 Foreclosing Banks / Servicers in Chicago
Bank of America had the highest number of foreclosure filings in Chicago in 2009. VIEW THE MAP
The banks and financial firms behind the most foreclosures in Chicago are many of the same institutions that profited greatly during the subprime lending years (2004-07) from the sale or securitization of risky mortgage debt. Many of these same companies received millions in bail out (TARP) funds and continue to foreclose on homeowners instead of proactively modifying mortgages.