DeKALB – The DeKalb County Sheriff’s Office has set an unwelcome record.
For the first time, the office has handled more than 270 foreclosure sales – an all-time high, with four months left in the year.
DeKalb County Sheriff Roger Scott said the office broke the previous year’s record of 253 sheriff’s sales at the end of July with 271. Scott said he expects that number to rise significantly as there are at least seven more sheriff’s sales scheduled for the year.
But the high number is not all bad news for the county, which makes some money from the sales. Each sheriff’s sale generates a $600 fee from the bank or foreclosing agency, which means the county has added at least $162,600 to the general fund this year.
Still, it is $162,600 the county would rather not take, Scott said.
“It’s not a good way to get revenue up,” Scott said. “If it is a large land developer, that’s one thing, but when it’s individual families ... we remember that every time we go to sale, someone is losing their home.”
Although it might be tougher for Scott to see a family enter a foreclosure, when large land developers fold, it also can have a ripple effect on communities.
In Kirkland, Bob Rood was set to develop a 74-home subdivision called Hickory Ridge. He said everything was going well when the project started in the early 2000s until the economy tanked in 2007. He developed only 26 of the 74 sites before the subdivision was foreclosed and taken back by the bank.
“I had no idea the economy was going to do what it did,” he said. “Whoever buys it can certainly build the rest of the 40-something homes.”
Finding a buyer for the project does not seem likely anytime soon, leaving those in Hickory Ridge, and Kirkland Mayor Les Bellah, in a difficult situation.
Bellah said the people in Hickory Ridge are in a tough spot because the village cannot take over upkeep of the properties and streets in the area because it was not built out. He said the bank also fails to perform maintenance, leaving residents frustrated with poor road and lawn conditions and declining property values.
“The people out there have a little disappointment,” Bellah said. “And there is added stress, because the bank doesn’t seem to care.”
The record-setting year for foreclosures also has been trying for real estate agents.
Nedra Ericson, who has been an agent for 35 years, said the foreclosure crisis has been difficult to handle, not only with convoluted bank procedures, but with the proliferation of short sales, which stand to damage the housing market just as much, she said.
Ericson said when she does handle a foreclosed property, it often takes between six months to a year to work details out with banks and agencies such as Fannie Mae and Freddie Mac. That happens only after foreclosed properties remain in limbo for months, losing value with each day.
Even when homeowners who are “underwater” avoid foreclosure and opt for a short sale, which allows homeowners to sell the property for less than the balance of their mortgage, it hurts the overall housing market, Ericson said. Many sellers with the means to buy a new property are too quick to settle for too little on the one they’re selling, she said.
“Some time this has to stop; this spiral down,” she said. “I understand the need to sell, but there has to be a bottom to it.”
Gerald Jensen, a finance professor at Northern Illinois University, said national trends show banks have fewer nonperforming loans compared with the height of the “Great Recession,” but those financial institutions still are losing money from each foreclosure.
He said there is a push for banks to sell as quickly as possible because they are not able to maintain the properties, which helps push their value down the longer they sit.
“Banks have no expertise in keeping up properties,” he said. “Their expertise is in lending money, and they have to get back to that as quickly as possible when they hold properties.”
Jensen’s observation of an improving housing situation on the national level could slowly be coming to the area.
Rood said he may yet try to finish his 74-home Hickory Ridge subdivision.
“I’m entertaining buying it back,” Rood said. “That’s up in the air.”