Metro area sees rise in activity
The flipping of properties with inflated appraisals and outright fraud on mortgage lenders was a major factor in the persistently high level of foreclosures in the Chicago metro area, Foreclosures.com suggested Monday.
The investment advisory firm saw 1,696 filings to start foreclosure in Cook County in December 2004 and 1,486 in January 2005. Such filings were a mere 650 in December 2004 and 621 in January 2005 for the surrounding suburban counties, Foreclosures.com said.
"In contrast to Cook County, filings in the surrounding suburban counties were down to 650 for December and 621 for January of this year," said Alexis McGee, Fair Oaks, Calif.-based Foreclosures.com's president, in a statement.
According to Assistant U.S. Attorney Kevin Powers, McGee said, a ring of 20 people operating on the south and southwest side of Chicago skimmed $4.4 million through fraudulent deals before being arrested and convicted in 2004.
"Property flipping through inflated appraisals and phony loan documents leads to people winding up owing much more than their homes are worth," said Ms. McGee. "At the first sign of financial trouble, they just walk away, and the lender forecloses and takes a loss."
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