Aug
04

Lenders Now Responsible for Chicago Vacancies

August 04, 2011

Here is some positive Chicago real estate news amidst a weak economy and a struggling housing market:

The Chicago area has posted a drop in the number of empty homes.

According to the U.S. Census Bureau, the Chicago-area home vacancy rate fell to 3.6 percent in the second quarter of 2011. It’s a welcome drop after the first quarter, at 4.3 percent, posted the highest rate in more than 15 years.

vacant home uncared for

According to a new Chicago ordinance, the lender of this abandoned home must clean it up.

The local vacancy rate during the same time last year was 3.1 percent.

As delinquent and underwater homeowners continue to lose their homes to foreclosure, the unkept properties push neighboring home values down. In some cases, the lenders are the ones allowing homes to sit abandoned and uncared for as they drag their feet through the foreclosure process.

But that is about to change. Last week, the Chicago City Council passed an ordinance that holds lenders responsible for maintaining properties once they have been left vacant.

According to the Mayor’s Office, the city spent more than $15 million tearing down, boarding up or keeping up with vacant homes and buildings last year.

The new ordinance defines a “mortgagee” as the entity who holds a mortgage on a property as the property owner. Mortgagees, which can mean lenders, will now be responsible for taking care of the property in foreclosure, whether it is boarding up an entrance, keeping the lawn mowed or snow shoveled, or dealing with complaints about a vacant property.

“With this ordinance, Chicago is leading the way in protecting residents, neighborhoods and communities from the devastating impact of foreclosures,” said Mayor Rahm Emanuel. “I am proud of this strong piece of legislation requiring banks to be good neighbors and maintain the foreclosed-upon properties.”

Let’s hope the new rule makes a difference to our Chicago neighborhoods.

Want to see a map detailing the rate of vacant properties across Chicago? Click here.

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Tracey

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