The 127,300 Chicago mortgages on the verge of foreclosure in January is an increase of 1.5% from one year ago, according to the Obama administration scorecard released last week.

Where the foreclosures are located is notable, as nearly one in four mortgages in Chicago back properties in neighborhoods that have a delinquency rate at least twice as high as the national average, according to CoreLogic (CLGX) scorecard data.

The city was one of the hardest hit by the foreclosure crisis. As of January, Chicago held the 28th highest amount of mortgages in danger of default – meaning 90 days or more delinquent or in the foreclosure process, according to Lender Processing Services (LPS) data in the scorecard.

"These hardest hit areas are also experiencing high levels of residential vacancies, underwater mortgages, and home home price declines," according to the scorecard.

Roughly 25% of Chicago mortgages are in negative equity, compared to the average of 23% for other large cities, CoreLogic data shows.

The amount of delinquent loans is climbing in Chicago, up to 9.6% of all outstanding home loans in the area, matching its peak in February 2010.

According to the scorecard, part of the blame for the renewed growth in distressed mortgages stems from a delayed foreclosure timeline. RealtyTrac data shows the average foreclosure processing time for Illinois is 575 days in the fourth quarter, up from the national rate of 348.

Through three rounds of the Neighborhood Stabilization Program, the federal government granted $264.9 million to 12 grantees in the Chicago area. The money is used to buy and rehabilitate previously foreclosed homes and provide rental assistance in low-income areas.

Illinois received another $400 million from the administration's Hardest Hit Fund. Its primary program provides up to 18 months of mortgage payments to unemployed borrowers.

The local enonomy has improved somewhat. Unemployment dropped to 8.5% as of December from a 10% peak in October 2009. But more than one-third of the market is either an REO sale or a short sale. Home prices dropped 23% after the housing bubble burst in 2006 to April 2009. While the rest of the nation has averaged a 3% drop since then, Chicago prices declined another 14%, according to the scorecard.

"The challenges in the diverse Chicago housing market have been more severe than those in most areas of the nation," according to the scorecard. "During the early part of the last decade, local home prices grew at a slower pace than the national average; however, prices have since fallen by a greater percentage than in the nation as a whole.