Chicago Sun-Times
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Title bout: Foreclosures pit communities vs. banks

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During the foreclosure crisis, banks have been accused of rushing in too quickly to seize distressed properties.

But not always. Sometimes communities think banks or other loan servicers take too long to secure a property that's a vacant eyesore, damaging a neighborhood.

That's the heart of a debate that was going on in Springfield last week over legislation that would require banks to move in promptly to clean up and secure vacant property, even before it's legally theirs.

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(Sun-Times Media)

Vacant properties are a big problem. There are huge numbers of them in Chicago and around the state. Often the property is in limbo because the occupants are gone but the bank has not initiated or completed the foreclosure process. By some estimates, there are thousands of delinquent properties that no one is taking responsibility for.

Chicago and Cook County have passed ordinances making lenders responsible for keeping up distressed properties, but there's a legal argument in some quarters that only that state really has the power to do that. Senate Bill 16 (which, in one of those Springfield twists, actually is being debated in the House) would take care of that.

Local governments, community organizations and many advocacy groups like the bill. The bank trade groups don't. They argue that financial institutions don't have any right to move in on a property before they have title to it. They also say it will drive up the costs of mortgages if banks have to figure in additional future costs should a property become delinquent.

In the past, the law has been that financial institutions are responsible for maintaining a property only after a foreclosure is complete.

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2 Comments

Is there a way to give small community banks more time while cracking down on big banks? Somehow, I don't believe anything big banks say. Why do you suppose that is?

Bank of America how do we get them to help America with homeowners loans and how do we get them to pay out their homeowners loans to make them lower for us.

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This page contains a single entry by Thomas Frisbie published on April 2, 2012 3:13 PM.

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