Unemployment Drives More Foreclosed Houses in Decatur

As joblessness worsens in Decatur, the largest city in the Illinois county of Macon, the number of foreclosed houses keeps rising.

In May, 1.6 percent of the total mortgages have already become foreclosed houses, an increase of 0.4 percentage points compared to May 2008 when the foreclosure rate was 1.1 percent.

But even with the increase, foreclosure pace in Decatur was still far lower than the average national foreclosure rate of 2.5 percent, representing a difference of 0.9 percentage point.

Because of loss of jobs in the city, the number of homeowners defaulting on their loans has also soared. In May, 3.4 percent of the total borrowers with home loans were already behind in their monthly payments by 90 days or more. Last May 2008, only 2.4 percent of mortgage borrowers had the risk of seeing their homes turning into foreclosed houses. The increase represented a difference of 1 percentage point.

From June 2008 to May 2009, 840 foreclosure cases were filed, equivalent to about 2.3 foreclosure filing per day. During the 12-month period that ended May 2008, 975 mortgages became at risk of becoming foreclosed houses.

According to an unemployment report released by the U.S. Labor Department for April 2009, the joblessness rate in Decatur increased by a record 5.4 percentage points from April 2008 to a record high 9.8 percent.

Among cities in Illinois, Decatur had one of the highest jobless rates. The city of Danville also reached 9.8 percent, an increase of 3.2 percentage points from April 2008.

The only Illinois cities with jobless rates higher than Decatur in April were Rockford, which had 12.1 percent, and the Kankakee-Bradley metro area, which had a jobless rate of 10.6 percent.

The Chicago metro area, which includes Naperville and Joliet, had a jobless rate of 9.8 percent, the same figure with the rate of Decatur.

The other Illinois metro areas with high jobless rates in April, but lower than that of Decatur, were Peoria, which had a jobless rate of 9. 2 percent; Moline-Rock Island area, jobless rate of 6.5 percent; Champaign-Urbana, jobless rate of 6.2 percent; Springfield, jobless rate of 6 percent; Bloomington-Normal area, jobless rate of 5.9 percent; and Jackson, jobless rate of 5.9 percent.

Housing analysts said that the first cost that households typically remove when the household head becomes unemployed is the mortgage payment, so as the jobless rate rises, it is expected that the number of foreclosed houses also increases.