When Norma Heger made her first payment on her River North condominium unit in 2005, she didn’t anticipate the hoops she would have to jump through in the next few years.

“The market was looking pretty good at that time,” she said.

Heger, who works in sales in Glen Ellyn, had invested in suburban property in the past, and the $332,000 unit at 10 E. Ontario seemed like a clear opportunity. She and her partner were only required to put down 10 percent at closing, and the homeowner assessments — fees collected to cover the cost of high-rise amenities such as door staff and maintenance in the building — wouldn’t kick in for two years.

They rented out the unit on a short-term basis, usually to business people who were only in town for a few months. After paying the mortgage for two years, Heger spent $20,000 on renovations and furnishings for the unit — knocking down walls, putting in wood floors and installing granite counter tops in the kitchen.

“Everything was very high end,” she said. “We planned on having this condo for a long time, that’s why we put the money into it.”

But soon after the work was finished, Heger’s luck began to change. She lowered the rent on more than one occasion to accommodate a thinning pool of tenants, and around that time the building’s condo association began asking for assessments on the apartment.

“When we couldn’t even rent it out, we knew we couldn’t pay anything,” she said. “It was actually gut-wrenching.”

The situation was further complicated when Heger was diagnosed with cancer in 2008. Fees for the treatments and surgeries kept her from being able to even cover the assessments, and Heger said that the condo association eventually took her to court over late payments.

Calls to the condo association at 10 E. Ontario were not returned.

With their savings dried up and no renters in sight, Heger and her partner began looking for a way out. After three failed attempts to close on discounted cash offers with the now-dissolved National City Bank, Heger let the unit go into foreclosure in early 2009.

“I couldn’t get blood from a turnip, I couldn’t just make money appear,” she said.

Heger’s mortgage woes inducted her into a growing class of condo owners in the city who, cleaned out and left with little alternative, are turning their units over to the banks.

A study released last week by the research and policy group Woodstock Institute states that condominium foreclosures made an unsettling climb in the first half of 2010. According to the report, new foreclosure filings on condominiums in the city grew by 38 percent in the first six months of 2010 compared to the same period last year.

The report tallied 335 foreclosure filings through June on the Near North Side alone, with 185 filings occurring in the second quarter. That’s an increase of nearly 41 percent versus the same period in 2009. The Lincoln Park area wrapped up the first half of the year with 121 filings, up by more than 49.4.

The quantity of downtown condo foreclosures, though on the rise, were still dwarfed by figures in lower-income areas like Austin, where filings in the first half of the year — though lower than the first six months of 2009 — still came in at 438 cases.

Streeterville real estate agent Gail Spreen said that the recent rise in foreclosures could be sourced to a number of factors, including the expiration of incentivized deals such as the assessment concessions made at 10 E. Ontario, where 16 other foreclosure filings have been filed so far this year.

Similar groupings of filings have cropped up in condo conversions such as 33 W. Ontario and 440 N. Wabash, where nearly 25 percent of the units have been foreclosed on, she said.

Spreen said that her firm also sees the filings being initiated by a cross-section of students, doctors and other professionals who are looking to move out of the city but can’t seem to shake their units in the current down market.

“They’re basically forced to start the foreclosure process, because in order for a bank to even listen to you in doing a short sale, you have to be behind on your payment,” she said.

The upswell in filings indicates that an increasing number of mortgagees have exhausted all of their options and are looking for a way out, said attorney David Rudolph.

“The trend these days is for owners of units to just throw their hands up and say that they are done,” said Rudolph, who specializes in condominium law.

The foreclosure process can sometimes take over a year to complete after mortgage payments are stopped, he said, giving owners who live in their unit time to reorganize.

That stay can be cut short, though, if an owner also stops payments on their homeowners assessments. Illinois law permits condo associations to affect eviction orders on owners who refuse to pay the fees, giving the groups possession of the unit for up to thirteen months.

“That’s a powerful weapon,” said Rudolph.

Jeff O’Hara is currently trying to stave off both the bank and the condo association from taking his downtown dwelling.

“Foreclosure is the last thing anyone would want,” said O’Hara, who lives at the Grand Plaza at 545 N. Michigan.

O’Hara bought his unit with a loan from Fannie Mae in late 2008, against the advice of friends. Facing job uncertainty and declining values in the building, he put the apartment back on the market at its original price a few months later.

Today, O’Hara is still paying his assessments, though he expects to lose his job in the near future.

“You don’t really want to keep making payments on this thing when you don’t have an income,” he said.

He hoped to still close a sale on the unit, but said that waiting on the bank’s approval of a formal offer can often try the patience of buyers who are finding deals elsewhere.

“[The bank] won’t tell you what they’ll accept,” he said.

Former condo owner Norma Heger said she is still reeling from the financial shortfall she endured with her downtown unit. And if she ever does recover from her losses, she imagined it would be some time before the market was again safe to invest in.

“That would be someday far down the road,” she said.