The city of Chicago has lessened certain elements of its vacant property ordinance for mortgage servicers, particularly with interior maintenance.
Chicago Buildings Commissioner Michael Merchant, in a HousingWire article, said that the city eased some of its standards for the maintenance and upkeep of vacant property interiors in the run-up to foreclosures, one of the key tenets in its hotly-contested ordinance.
The changes, according to the article, came after the city conducted discussion with several mortgage servicers, including Bank of America and Wells Fargo, on the more strict requirements of the ordinance; after review, officials concluded certain measures, such as the interior upkeep, were a little too strict.
Merchant was clear, though, that both side of the discussion made concessions; the goal, ultimately, was to make the ordinance more effective.
“We’re trying to work with the industry to meet these objectives,” Merchant said at a SourceMedia mortgage servicing conference in Dallas-Fort Worth Thursday. “[The city is] not trying to use this as a cash cow.”
And interestingly, housing data related to many of the issues the ordinance addresses seems to be responding. Merchant said in the piece that property registrations have nearly doubled since the ordinance took effect in November (it requires all vacant properties to be registered and for the owner to pay a $500 registration fee), and field reports have stated a higher level of compliance. It is unclear though, Merchant added, if those details are the direct result of the ordinance.
Since it was passed, the ordinance has dealt with its fair share of controversy, as analysts and lawyers alike have chided the city for the breadth of the ordinance. The most notable opposition, though, has come from the FHFA, which has strenuously resisted paying the associated fees via its GSEs Fannie Mae and Freddie Mac. The agency almost immediately filed a lawsuit against the city that remains unresolved, and even now it is advising the GSEs to pay the fines under protest.
Such opposition, though, had done little to quell other governing bodies from pursuing similar ordinances. The state of Illinois’ legislative body, for instances, is debating its own version of the bill that would allow local governments to issue similar fees for vacant properties. The bill is currently awaiting a full House vote.