Chicago appears to be the location for a January 31 hearing on the maintenance of foreclosed properties, according to a National Mortgage News piece on the subject.
Two Democratic congressman, Elijah Cummings of Maryland and Danny Davis of Illinois, want not only the chief executives of Fannie Mae and Freddie Mac to testify, but also the top executives at Bank of America, JPMorgan Chase, Wells Fargo and Deutsche Bank.
According to the article, those financial institutions, when combined, amount to 50 percent of the servicing market.
“We would like to examine the situation in Chicago as a case study of this nationwide problem,” the two congressmen said in a January 5 letter on the hearings.
At issue, as many Chicagoans are aware, is the flailing quality of foreclosed properties, many of which are vacant and become hotbeds for crime and illegal activity. As the vacant homes draw more shady attention, adjacent property values fall, and the neighborhood’s homes become even more difficult to sell (this is especially true of Chicago’s South Side).
To combat this issue, the Chicago City Council passed an ordinance in October that requires the owners of the vacant properties – the aforementioned banks, in most cases, as well as GSEs – to follow a set list of steps in up-keeping the property, from boarding up windows to trimming grass and shoveling snow. If the owners do not comply, they can be slapped with fines as high as $1,000 a day.
In December, the Federal Housing Finance Agency (FHFA), irate at the billings Fannie Mae and Freddie Mac could experience under the new law, sued the city of Chicago, though the lawsuit did little to quell Cook County’s own housing ordinance, which it pursued just days after the FHFA’s lawsuit.