Foreclosures On the Rise in McMansion Counties

DuPage County, located west of Chicago, is one of the richest counties in America. The average home price is $330,000. Yet, the stress of adjustable rate mortgages and high debt levels is taking its toll even there.

The Daily Herald, a West Suburban newspaper, has been running a series on foreclosures in DuPage County all week. The statistics are not good:

In DuPage County, the auctions are held at the sheriff’s office in Wheaton twice a week because of the increased number of foreclosures lately, compared to once a week last year.

In the Northwest and West suburbs, 6,662 households received foreclosure notices from January through September. That amount exceeds the full year of 2006, which had 6,428, according to data provided by Kaneville-based Record Information Services.

The judge in charge of foreclosures for the entire county is now seeing over 100 cases a week. She’s trying to save some people from the auction block (most times not successfully.)

Some of the homes on the auction block are being sold to investors. The Daily Herald article says about 25 a day are actually sold but the rest go back to the banks.

When it goes back to the bank, it becomes “bank owned.” And this is where the property can sit and sit for a long time.

I’ve talked about a bank-owned McMansion in Downers Grove, which is in DuPage County, before.

This house has been on the market in some form for nearly two years. It was built in 2003 and is in a so-so location (on a busy road) at 1710 Maple.

The bank recently lowered the price again. The bank has been lowering the price of this property just about every month. It had once been listed for over $900,000 and has been reduced over the years. In October, the bank reduced to $655,000 but they just reduced again to $644,000.

How low will it go? It is anyone’s guess.

Today’s auction schedule in DuPage County includes about 25 homes. They range from small condos to larger homes. There is a home in ritzy Burr Ridge listed at $323,964. I’ve seen $900,000 homes in Burr Ridge also on the auction block in prior auctions. There was also a Hinsdale mansion for $1.5 million.

No one is immune. The subprime areas are getting hit harder, but the rich counties are now also feeling the pain.

Just because you make more money, doesn’t mean you don’t have too much debt. It just means you can hold out a little longer when you get in distress. The Daily Herald article posits that the foreclosure rates in DuPage County are only going to increase in the spring. Sad, but also the new reality.