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Quick Hit
by Adam Doster
Fri Nov 12, 2010

Refinancing Ain't What it Used To Be

Earlier this week, we wrote about the frightening statistics compiled by Zillow that detailed how many homeowners in Chicagoland owe more on their mortgage than their home is presently worth. One reason that so many local homeowners are under water is that refinancing a mortgage has been tricky for those with a shaky balance sheet. "Many homeowners can't refinance," NPR reported yesterday, "because they don't have enough equity, their incomes are too low, their debt is too high, or their credit scores aren't good enough."

To be sure, interest rates are very low and refinancing activity is picking up steam, even for those whose credit score has taken a dive. But the NPR piece illustrates the vicious cycle in which many folks in foreclosure, particularly those in communities of color, find themselves. To get an affordable mortgage, one needs steady income and a solid credit score. But individuals living in communities of color are far more likely to have "non-prime" credit scores and far less likely to have job opportunities available. With so few options, walking away from the home often makes the most economic sense. 

PI Original
by Micah Maidenberg
Wed Nov 10, 2010

One In Three Chicagoland Homes Are Underwater

Homeowners in the Chicago region are struggling with mortgage debt. Data released today shows that about one-third of mortgages on area single-family homes are worth more than the property itself. What can be done to improve the situation?

Quick Hit
by Micah Maidenberg
Fri Nov 5, 2010

Sweet Home's Next Steps

There was no vote on the Sweet Home Chicago Ordinance at City Council on Wednesday, but proponents of the legislation say they've got multiple options at their disposal to get the bill -- or an alternative version of it -- finally passed. Sweet Home, as originally written, would mandate that the city designate a minimum of 20 percent of the tax increment financing dollars collected in Chicago on an annual basis for affordable housing projects, including revitalizing foreclosed homes. We've tracked the fight for the bill and its status in council extensively over the last few months.

Faced with a delay that had stretched to well more than a year, Ald. Walter Burnett (27th Ward), the legislation's chief sponsor, threatened to use a rare parliamentary maneuver called motion to discharge to force the full City Council to take an up or down vote on the bill at the November 3 council meeting. But Burnett said at the "ninth hour" Alds. Ray Suarez (31st Ward) and Ed Burke (14th Ward) approached him with a deal: drop the motion to discharge and prior to November 17 we'll allow a committee hearing and, crucially, vote on the original ordinance or a compromise bill that's still being drafted. Burnett said after conferring with Sweet Home supporters, he agreed to the plan. Suarez and Burke chair the housing and finance committees, respectively. There's been one hearing about Sweet Home, but no vote on it.

Julie Dworkin, policy director for the Chicago Coalition for the Homeless, said the Sweet Home coalition agreed to put off the motion to discharge vote for practical reasons. It's preferable to go through the regular legislative process, she said, "because certain aldermen who support the ordinance do not support using the motion to discharge because they don't like to be so in your face to the committee chairs." Dworkin is also confident that Sweet Home would make it out of a joint housing-finance committee hearing. She pointed out that Sweet Home backers still can use the motion to discharge, as there are two council meetings remaining this month, for the original ordinance if they do not support the alternative. The exact contours of that bill -- whether it preserves the basic idea of Sweet Home or overly waters it down -- could determine whether Ald. Burnett forces a showdown in the full council on an important, yet long-stalled bill.

Burnett, who's long been close with outgoing Mayor Richard Daley's administration, acknowledged he was frustrated with the delays that have kept Sweet Home stalled. "Personally, I think it's the mayor holding it up," he said. The end game for this legislation, however, finally appears to be at hand.

Quick Hit
by Adam Doster
Thu Nov 4, 2010

Berrios: "You'll Have More Information Than In The Past"

For those hoping Cook County Assessor-elect Joe Berrios will uphold his campaign promises to make the property assessment process more transparent and fair, the election night quote he delivered to the Chicago News Cooperative is a bit discouraging:

"To me it was all a bunch of bunk," Berrios told the Chicago News Cooperative, when asked about the persistent criticism of cronyism that has dogged his campaign. He vowed greater transparency, but set a vague standard for it, saying that from day one "you will see more information than you have in the past" out of the office.

On his campaign website, Berrios said this his office would ensure "assessment notices can be read with clarity." He even posted a sample notice (PDF) that he thinks is an improvement over the current paperwork sent out to homeowners each year. But saying only that "more information" will be made available is a pretty low bar to set, especially when accusations of corruption dominated the campaign. It'd be nice to see our new Assessor make some concrete proposals in the coming months.

Quick Hit
by Adam Doster
Thu Oct 28, 2010

Will Sweet Home Chicago Finally Move?

The Heartland Alliance passed along an interesting nugget about Chicago housing policy yesterday. According to their post, Ald. Walter Burnett (27th Ward) is planning a procedural trick to pry his Sweet Home Chicago ordinance out of the Joint Committee on Finance/Housing and Real Estate, where it's been stalled since the summer. The ordinance, if you'll recall, would set aside 20 percent of tax increment financing (TIF) dollars collected each year to fund new and rehabbed affordable housing developments. On November 3, the next full council meeting, Burnett is expected call a "motion to discharge" the bill. What's that mean? Here's the relevant description of the motion, per the City Council's rules (PDF):

Whenever any referred matter shall not have been reported back to the City Council by the committee to which referred, within a period of sixty (60) days, any Alderman may move to discharge the committee from further consideration of that matter. The motion to discharge shall be made under the order of “Miscellaneous Business”, and shall require the affirmative vote of a majority of all the Aldermen entitled by law to be elected.

The maneuver is rarely invoked in the council chambers; when Ald. Tom Tunney (44th Ward) used it to rescind the ban on foie gras two years ago, Ald. Joe Moore (49th Ward) said he hadn't seen an aldermen rely on it during his entire tenure in office. The coalition currently lists 26 co-sponsors on its website, which is the bare minimum that would be needed to toss the ordinance to the full council for a vote. Stay tuned. On November 3, there could be some fireworks down at City Hall.

PI Original
by Adam Doster
Wed Oct 27, 2010

Property Taxes, The Assessor, And You (VIDEO)

The heated campaign for Cook County Assessor reveals why both ethics and tax reforms are needed to reduce the property tax burden in Chicagoland.

Quick Hit
by Micah Maidenberg
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.”