Chicago area housing prices are not rising as fast as they are in other parts of the country; in some neighborhoods prices are not rising at all. Growing numbers of completed foreclosures continue to add vacant homes to the landscape across the region, as our new data show. Many neighborhoods in Chicago and across the country are victims of the growing “Zombie” foreclosures, as the reporters are wont to call them, where lenders or servicers walk away from the foreclosure process after filing for foreclosure and the home has been vacated, but not finishing the foreclosure process. When neither the absent former owners or tenants nor the servicer maintains these properties, the surrounding homes and communities suffer the fallout. And when servicers fail to keep up the premises and finish the foreclosures after homeowners leave, the former owners are often unknowingly left with the liabilities and damaged credit.
So why am I cautiously optimistic? These are some of the calming and reassuring trends I see:
• At his inauguration speech, President Obama reiterated that free markets work well only when there is competition, appropriate regulation, and fairness. In the State of the Union, he proposed measures to increase economic security for the middle class, like raising the minimum wage, and renewed a call for legislation to help homeowners refinance;
• President Obama re-nominated the director of the Consumer Financial Protection Bureau, Richard Cordray. The CFPB also recently issued a slew of new rules implementing the Dodd Frank Wall Street Reform and Consumer Protection Act which are designed to make the mortgage market work more transparently and fairly, including rules on qualified mortgages, appraisals, mortgage servicing, originator compensation, and more;
• The U. S. Congress avoided going over the “fiscal cliff” (so far);
• The new Comptroller of the Currency, Tom Curry, ended the disastrous Independent Foreclosure Review process and entered into an $8.5 billion settlement with financial institutions that will provide some direct relief to harmed homeowners;
• The Federal Reserve Board acknowledged that it must do more to lower the unacceptably high rate of unemployment in this country; and,
• The Cook County Board of Commissioners passed an ordinance creating the nation’s largest land bank, which will help communities bring distressed residential, commercial, and industrial properties back into productive use consistent with community needs and priorities.
• HUD issued a final rule confirming and clarifying the standards for using the disparate impact doctrine in fair housing and fair lending cases.
Don’t get me wrong—I believe there is much more than can and should be done and should have been done long before now. But I believe that we can learn from the mistakes of the past and work collaboratively to create a safer, more vibrant and just and sustainable housing and financial system. I look forward to working with you on these issues in the coming year.