Earlier this month, the Lawyers’ Committee for Better Housing issued a study about the foreclosure situation in Chicago’s rental buildings. The study sheds light on how the foreclosures affect community members, and found that Chicago’s West and South sides were the most affected by foreclosures on rental properties and also owner-occupied single-family homes.
In 2010, lenders began foreclosure proceedings against 5,904 apartment buildings in the city. More than 17,000 rental units have been affected by foreclosures, according to the study.
Homeowners should be concerned about apartment building foreclosures in their neighborhood for three reasons, according to the Chicago Tribune. First, investor-owned properties that aren’t owner-occupied don’t qualify for the government’s Home Affordable Modification Program, which means there’s one less safety net to keep building ownership intact.
Second, the study found a pattern that shows disinvestment in communities where a number of apartment buildings have been foreclosed. Because of the neighborhood, fewer buyers are willing to buy and operate the buildings.
Third, through the improper and sometimes illegal actions of banker managers and receivers to force people from their homes, according to the Tribune, the community’s stability is compromised.
“(Foreclosures) are getting worse, but there is more awareness of the law and an attempt by some stakeholders to follow the law,” Martin Swartz, legal director of the lawyers’ committee, said in a statement. “When a property sells, they need to go out and find out who the tenants are (and) the extent of the leases. Right now they’re ignoring that, and we’re seeing some dangerous situations.”