Feds Suing Chicago Over Controversial Ordinance

The Federal Housing Finance Agency (FHFA) is suing the city of Chicago over its ordinance making mortgage creditors liable for the upkeep of vacant properties, the Wall Street Journal reported on December 13, 2011. The city had revised the ordinance in November by dropping a provision that had defined creditors as property owners after lenders threatened to sue, but the changes were not enough to satisfy the FHFA.

According to the journal, the agency said "the ordinance was unfair because it imposed all of the costs of ownership without any of the benefits, such as the right to sell or lease the property." The lawsuit also says the ordinance oversteps federal law by subjecting Fannie Mae and Freddie Mac to regulation that is the jurisdiction of the FHFA. The FHFA said that the $500 fee the ordinance requires mortgage owners to pay to register vacant properties and conduct monthly inspections of properties to determine if they are vacant "represents a tax" on Fannie and Freddie, according to the Journal.

Nearly 1,900 vacant properties in Chicago are stuck in the foreclosure process at a cost of $36 million in upkeep costs borne by the city, according to an estimate from researchers at the nonprofit Woodstock Institute. Tom Feltner, vice president of the Woodstock Institute, told the Journal, "By in many cases ignoring these properties you’re doing a disservice to the community and a disservice to the investor."

What do you think of the Chicago ordinance? Do you think it will help either the people needing foreclosure help or the neighborhoods where the foreclosures are happening?

Benjamin Brand Services - Chicago bankruptcy lawyer

Start Your Questionnaire

How may we help you?

Schedule an appointment today.

Why Choose Us?

  • You can meet with an experienced law Partner in the Firm not some associate.
  • We concentrate in foreclosure defense and bankruptcy so we have more options to offer you then other attorneys
  • We also represent individuals in Chapter 11's that offer better loan workout and restructuring options then Chapter 13 and most bankruptcy lawyers do not know how to do it.
  • We offer a free no obligation consultation where we will discuss your option or options, tell you the pros and cons of each one, the fees and costs and help you make an informed decision. There can be more then one solution!
  • We offer affordable payment plans and fixed fees in most cases.