The Effect of Poor Mortgage Practices on Iowa and Illinois Residential Real Estate

Faulty mortgage practices and automated loan signing programs have left the states Illinois of Iowa in real estate shock. Congress has acted upon the publics distress, they passed legislative acts to help out struggling home owners. The most popular of them can be found at President Barack Obama’s websites,, and the home recovery act website,

The Impact of Iowa’s lending Practices and Foreclosures

The Center for Responsible Lending, (2006-2010), an organization committed to protecting home ownership and family wealth, hit the state of Iowa’s 2010 foreclosure projections, right on the nose, at 120,000. Iowa’s high foreclosure projections, thankfully, isn’t the last word. While, Iowa did project 120,000 foreclosures in the state, the number of foreclosure sales is remarkably small, reaching only 5,869. Iowa’s low foreclosure inventory, when considering its projection rates,  is equally impressive, a mere 10,183, at the end of 2010’s first quarter. Leaving Iowa with a major chunk of its foreclosure properties being brought up to a current status.


The state’s total number of past due mortgages is another story completely. When looking at the numbers presented by Iowa, just for the first quarter of 2010, it’s easy to see how they came to their current sky-high foreclosure projections. When the first quarter of 2010 came to a close, Iowa posted 31,760 past due mortgages. The state only contains around 3 million people, most of which are not home owners due to their age and/or income. Iowa, expectedly, had a major change in foreclosure starts. Considering their increase i starts, if one contrasts that number over the past four years, 2006-2010, Iowa has had an overall 22% drop in foreclosure starts.


As the result of all these drastically changing factors, the average loss, per home, in Iowa was $2,118, which is not bad when considering the real estate devastation that occurred in Florida, Las Angeles, or Las Vegas. The total loss of wealth due to Iowa’s foreclosures, across the years 2009-2012, is projected to be $1.2 billion. A major blow to Iowa’s real estate markets.


The Impact of Illinois lending Practices and Foreclosures


Illinois has had it the worst out of much of the Midwest. Illinois has gone felt an unheard of rise in foreclosures. Between the years of 2006 to 2010, Illinois foreclosures have risen 509%. At the end of the first quarter of 2010, Illinois had experienced 194,017 foreclosure starts, spanning only 2 years.


Over the same period of time the state only sold 46,516 foreclosed homes, leaving Illinois with an inventory of over 100,000 foreclosed homes remaining in their possession. The annual loss per home in Illinois, was recorded by the state as a crunching $29,492. Overall, Illinois residential real estate racked up a total loss of 126.3 billion. If Illinois doesn’t pull its real estate head out of the sand, then all those past due mortgages are going to bite them in the rear, even harder than it is, now. Currently, Illinois boasts a total of 276,368 past due mortgages. To all real estate investors whom might be concerned, a big investment in Illinois residential real estate may not be the best decision, for at least the next two to three years. If one had to choose which of these two states in which to invest real estate capital, than Iowa should definitely be the choice.









Category: mortgage, Real Estate

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