Foreclosure filings in Evanston decreased last year by 21 percent and foreclosure auctions dropped by 36 percent, according to recent filings by the Woodstock Institute, a nonprofit research and policy organization. Spencer Cowan, vice president of the Woodstock Institute, said there may be several reasons for the changes, including reactions to the “Robo-Signing” Settlement, which required five major mortgage lenders to pay $25 billion to state governments and homeowners. He also suggested the change may indicate a shift in how lenders deal with a resident’s inability to pay rent. “Lenders are looking for alternatives,” Cowan said. “I wouldn’t be surprised to see foreclosure filings to continue to decline as lenders find that they have to find better ways of dealing with it.” Cowan said short sales are a typical alternative. In a short sale, homeowners who are dealing with negative equity sell their home for its valued price, losing the difference between that value and the original mortgage. An alternative to the lengthy foreclosure process is to hand over ownership of the home to the bank, Cowan said. Because Illinois has a judicial foreclosure process, it can take more than a year to finalize a foreclosure through an auction after the initial filing. Foreclosures in states with nonjudicial foreclosure usually take three to six months. “It’s not an efficient process, and it really doesn’t work well for the borrower or the lender,” Cowan said. In addition to being inefficient, a lengthy foreclosure period can cause people to abandon their homes before they are evicted. Empty houses then cause a wide set of problems. “If the house is abandoned, that is an invitation for looting, squatting, arson,” Cowan said. Although he could not point out the most problematic areas in Evanston, Cowan predicated foreclosures would be concentrated in minority neighborhoods because he has found such trends in previous research on urban development. “Not surprisingly, we found the number of (negative) equity was higher with areas that had a higher percentage of minority,” Cowan said. Because Evanston real estate is generally desirable for homeowners, Cowan speculated many homeowners being foreclosed upon could find buyers for short sales. Despite the decrease of auctions and foreclosures between 2010 and 2011, the number of foreclosure auctions increased sharply between the third and fourth quarter of 2011. The Woodstock Institute report and Cowan both attributed the recent increase in auctions to delays on foreclosures filed as early as 2004. “A lot of people are saying that this is because people were buying loans that they couldn’t afford,” Cowan said. “The fact that almost a quarter were written before 2004 or earlier means you’ve been paying that loan for four years. You could obviously pay that.” Changes in abilities to pay the loan could be due to the economy and general unemployment, said Mario Giannelli, a real estate agent at Chicago-based Baird & Warner, which has an office in north Evanston. He also said banks selling mortgages to hedge funds during the Great Recession caused confusion as to who the actual owner of the property in question was, again delaying the process. “The banks weren’t foreclosing until they were sure that the actual owners of the property were actually being notified,” Giannelli said. Giannelli said the convoluted process has led to people being unaware they’re getting foreclosed on until they are notified they have 30 days to leave their homes. “Who those people are, I don’t know specifically because they just pack up and go,” Giannelli said. [email protected]