Foreclosures.com: Unemployment May Spur Chicagoland Foreclosures.

Business Editors/Real Estate Writers

SACRAMENTO, Calif.--(BUSINESS WIRE)--Feb. 11, 2003

Foreclosures.com a California based distressed property investment advisory firm and publisher of pre-foreclosure property cites a still soft Chicagoland economy; a cooling local housing market; and a creeping increase in unemployment as reasons for an expected increase in Chicago metro area foreclosure activity in early 2003.

"57,400 jobs were lost year over year as of December 2002 in the nine county Chicago metro area," said Foreclosures.com's president Alexis McGee, citing data from the Illinois Department of Employment Security. "And unemployment rose to 6.5% in the metro area and to 7% in the city itself," continued McGee.

She went on to say that Foreclosures.com had long observed a linkage between long-term unemployment and slowing home price appreciation that produces an increase in mortgage defaults. "While we don't have formal numbers yet, we do have reports from Chicago Realtors that indicate increases both in inventory and time on market. That means a slowdown in the resale market is happening."

Ms. McGee said that a buyer's market usually creates a reduction in equity growth as sellers drop prices to meet buyer demands. "That means that troubled homeowners have a harder time refinancing their way out of looming difficulty."

She went on to say that unemployed or underemployed homeowners often can't make payments on their mortgages, and also can't qualify for new, lower rate loans. "They find themselves running out of both options and time, and are faced with the choice of making a quick sale to an investor to conserve some equity or losing everything at a sheriff's auction."

Foreclosures.com has been assisting distressed property investors and publishing pre-foreclosure property data on their website at www.foreclosures.com in California for more than a decade, and recently expanded their services to the Chicago and New York metro areas, all of New Jersey, and Phoenix AZ. The company also offers home study courses to train newcomers to foreclosure investing and provides one-on-one email consulting services to course graduates throughout the markets it serves.

"The Federal Reserve Bank of Chicago is cautiously optimistic about 2003 after reporting five consecutive months of below-trend activity on January 30, 2003," said Ms, McGee. She continued, "But remember that foreclosure activity is a lagging indicator. The ghosts of the recession are still haunting many Chicagoland homeowners, and until chronic unemployment recedes, many people remain in danger of losing their homes."