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Housing
Quick Hit
by Micah Maidenberg
1:13pm
Thu Oct 21, 2010

More Completed Foreclosure Auctions, More New Filings

The Woodstock Institute's latest report (PDF) on foreclosure activity in the Chicago region paints a grim picture. Between January and September of this year, 26,870 properties finished the foreclosure process and 95 percent of them were taken back by mortgage lenders, who are likely to keep them vacant, distressing neighborhoods and city budgets that depend on real estate-derived taxes, according to Woodstock Senior Vice President Geoff Smith. The inventory "poses a significant challenge to municipalities, as vacant properties decrease tax rolls while raising maintenance costs,” he said in a press statement. “These properties also affect the stability of local real estate markets by adding to the supply of for-sale housing in the region.”

Meanwhile, new foreclosure filiings in the six-county Chicagoland area continue to rise. Over the first nine months of 2010, lenders filed 58,962 new foreclosure suits in the region, a 28 percent increase over the same time period last year. In the city, wealthier residential areas near downtown are seeing the biggest jumps in new filings, while some black and Latino neighborhoods, like Englewood on the South Side and Hermosa on the Northwest Side, saw the pace of new filings drop year-over-year.

That doesn't mean those neighborhoods are in the clear, however. If the moratoriums announced by some banks because of the robo-signer crisis keep foreclosed homes in legal limbo and off the market, communities of color hit hard early in the foreclosure crisis could get hit hard again, according to Woodstock. Such neighborhoods "continue to experience high levels of foreclosure activity and have large concentrations of vacant properties that take longer to return to productive use than do vacant homes in predominantly white neighborhoods. The new delays may further set back these communities’ paths to recovery.”

Quick Hit
by Micah Maidenberg
4:11pm
Tue Oct 19, 2010

For Three Banks, No Evictions Without "Complete Assurance" Of Foreclosure Process

Cook County Sheriff (and potential Chicago mayoral contender) Tom Dart announced today his office will cease evicting residents from homes foreclosed on by Bank of America, J.P. Morgan Chase, and GMAC/Ally Financial, the lenders at the center of the foreclosure "robo-signers" crisis, unless they can provide "complete assurance that the foreclosure was done properly and legally.”

"I can’t possibly be expected to evict people from their homes when the banks themselves can’t say for sure everything was done properly," Dart said in a statement. The potential eviction freeze is scheduled to begin on Monday. Depending on its length, thousands of families could be impacted by the decision -- approximately one-third of the 3,700 home foreclosure evictions Dart's office annually carries out involve the three institutions listed above or one of their subsidiaries. And the moratorium will apply to other lenders that "also publicly admit to or which investigators find engaged in similarly questionable practices," Dart's office said.

About two years ago, Dart stopped enforcing all evictions connected to foreclosures. He said then that banks allowed to repossess homes were forcing his deputies to push out renters who had no notification of the legal drama swirling around their residence and had steadily paid their bills.

Quick Hit
by Micah Maidenberg
12:40pm
Thu Oct 14, 2010

Madigan: Allow Judges To Help Homeowners

The housing research firm RealtyTrac recently released a new set of data about foreclosure activity in the third quarter of this year. Simply put, the situation remains ugly in Illinois. Between July and September, banks repossessed 13,460 properties in the Land of Lincoln, a number that will add urgency to the widening dragnet into the banks' foreclosure practices. Yesterday, attorney generals from across the country, including Illinois' Lisa Madigan, announced they are joining with state regulators to investigate the use of robo-signers and the improper legal affidavits they churned out in foreclosure proceedings.

Many large banks have frozen foreclosures in the wake of the scandal. The attorney generals could start filing fraud cases as their inquiry digs into the extent of the issue. Madigan ripped the banks for putting millions of people into questionable loans and now wanting those people (and loans) to disappear. "Foreclosure is a fresh start for the lenders, who were way too eager to write high-risk, high-cost loans," she wrote at the Huffington Post. "It is a chance to bury evidence of their misdeeds and move on to a new buyer and new revenue."

The political and economic shocks stemming out from this situation aren't exactly clear yet. Madigan, meanwhile, said in a statement she wants new legislation that would "ensure each homeowner know[s] the amount they owe, who owns their loan, the terms of their original loan, and whom they can contact" during foreclosure proceedings. She also said she'll push for a federal "cramdown" bill allowing judges to reduce the principal amount on loans, thereby helping to keep distressed homeowners in their residences. Advocates have long sounded the alarm about getting the banks to execute more meaningful write-downs and loan modifications. It's a critical tool

PI Original
by Micah Maidenberg
2:25pm
Fri Oct 8, 2010

Freeze Foreclosures, But Don't Forget The Bigger Picture

The home foreclosure crisis was upended this week by escalating probes into the banks' foreclosure paperwork. But the freezes on foreclosure proceedings and sales need to be accompanied by more principal write-downs and loan modifications by the banks, advocates say.

Quick Hit
by Micah Maidenberg
3:47pm
Wed Oct 6, 2010

Daley's Tough Day In City Council Chambers

Outgoing Chicago Mayor Richard Daley is accustomed to seeing his legislative proposals sail through City Council like a 747 hurrying out of O'Hare. He isn't used to seeing a council member introduce legislation that would limit his power over local government operations. So today's council meeting must have been an especially bad one for Daley.

According to the Tribune's initial report on the meeting, an ordinance designed to assist renters facing displacement when a developer is converting their unit from rental to condo was sent back to committee. Protests from the real estate development industry sank the bill. That's a pretty disappointing outcome for legislation that, if passed, wouldn't even immediately help renters because virtually no rentals are being converted in condos in the present real estate market, unlike during the middle part of the decade. The city's Condo Conversion Task Force, which met 10 times over a two-year period starting in 2007 and included real estate firms, came up with the recomendations that underlie the proposed bill. "We heard nothing, and then at the last minute. Again, it puts the real estate industry not in a good light, because this was all discussed prior," the Tribune reported Daley saying. 

Ald. Scott Waguespack (32nd Ward), meanwhile, introduced an ordinance today that would allow the council's Committee on Finance to review all city contracts worth more than $500,000. The council has not provided a check over executive-branch contracting since Daley took office in 1989.