April 14, 2009
 
The Department will devote considerable effort to the foreclosure
crisis: preventing foreclosures whenever possible and, when they do
occur, helping reduce their impact on families and neighborhoods.

One of the keys to foreclosure prevention is early intervention.
The Department will expand its outreach efforts to encourage borrowers
to seek assistance at the first sign of difficulty in meeting their
mortgage payments.

Through HOPI, immediate financial counseling will continue to be
available to troubled borrowers who call 311. In addition, the
Department will continue its Borrower Outreach Days at locations
throughout the city to help those in the hardest-hit communities stay
in their homes. At these events, Chicago residents

at risk of foreclosure can meet with lenders and financial counselors to help get their mortgages back on track.

The foreclosure crisis is not limited to single-family homes and
condominiums. According to the Woodstock Institute, over 35 percent of
foreclosures on residential properties in Chicago in 2007 were on
2-to-6-unit apartment buildings, primarily in minority and low-income
communities. This is a critical problem, because a foreclosure on one
of these buildings can force six times as many people into the rental
market as a foreclosure on a single-family home. Funding mechanisms
must be developed for the acquisition of these buildings to retain them
as active rental properties.

At the urging of Mayor Daley, the Illinois General Assembly passed
legislation in 2008 to strengthen protections for renters impacted by
building foreclosures. Also in 2008, the Chicago City Council passed an
ordinance requiring tenants to be notified within 7 days of a
foreclosure filing. The City will continue outreach to ensure such
tenants are aware of their protections and where to find help.

Chicago’s foreclosure prevention programs have been recognized
nationally, and we will continue to implement and expand them. But
despite our best efforts, foreclosure sometimes is unavoidable. In
those cases, the Department will work with community groups,
not-for-profit organizations and the federal government to find buyers
or renters for homes that have become vacant because of foreclosure.
Using funds appropriated through the Housing and Economic Recovery Act
of 2008 and additional leveraged private funds, our public-private
initiative will seek to put vacant, foreclosed properties back into
productive use as quickly as possible. The initiative will oversee and
coordinate targeted revitalization efforts in key areas of Chicago to
mitigate the impact of foreclosure on our neighborhoods. Our
acquisition strategies will include expansion of HUD’s
$1 Homes program and bulk purchase of bank-owned properties. We
also are working with national partners to see whether certain
properties can be unlocked from securitization. Our disposition options
include sale to an owner-occupant, lease-to-own, rental, and when
necessary, demolition. Community partner organizations will provide
input on the real estate market in specific areas of their communities;
identify and counsel potential homebuyers, renters, and lease-to-own
participants; and monitor the management of rental properties.

 
 
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