More Bad News for Illinois State Economy

By Kevin Robinson in News on Apr 17, 2009 1:15PM

The state's unemployment rate rose for the sixth month in a row in March, breaking nine percent, the highest in 24 years. Governor Pat Quinn announced that state unemployment benefits would be extended an additional 13 weeks for workers that had exhausted their access to unemployment insurance. Illinois currently offers 26 weeks of benefits, in addition to the 33 weeks provided by the federal government.

Compounding the massive job losses in the state is the news that Illinois households that got at least one foreclosure-related notice in the first three months of the year rose nearly 68 percent compared to 2008. The nearly 39,000 homes in the state threatened with foreclosure ranks fifth-highest in the nation, behind Nevada, Arizona, California and Florida. And while the Obama administration has worked to help 9 million homeowners restructure their mortgages, the number of foreclosures is expected to increase in coming months. That's because lenders, which had held off on foreclosures while the White House worked out the deal, are now moving to foreclose on ineligible borrowers. HUD Secretary Shaun Donovan expects to see continued foreclosures on vacant homes, second homes and properties owned by speculators, which aren't covered by the Treasury Department's loan modification program.

The level of industry participation also remains to be seen. Although Treasury has signed contracts with six big loan servicing companies, including Citgroup, Wells Fargo and JPMorgan Chase, industry participation will still be crucial to the success of Obama's "Making Home Affordable" plan.