According to a ""report"":http://www.woodstockinst.org/publications/download/left-behind:-troubled-foreclosed-properties-and-servicer-accountability-in-chicago/ released Thursday by ""the Woodstock Institute"":http://www.woodstockinst.org/, vacant homes in the city of Chicago are piling up and costing the city millions of dollars while bringing crime and blight to neighborhoods.[IMAGE]
According to the report, there were more than 18,000 properties on the city of Chicago's vacant buildings index as of September 2010. Of the vacant homes, 12,674 properties, representing around 69 percent, were associated with a foreclosure filing between 2006 to July 2010.
""The ongoing foreclosure crisis has led to a dramatic increase in vacant and abandoned properties across the City of Chicago,"" the report reads. ""While some of these properties are secured and maintained by their owners, many are not and can pose significant risks for neighborhood stability. Vacant and abandoned properties can rapidly spiral into disrepair, affecting the values of neighboring properties and attracting criminal activity.""
Of the homes associated with a foreclosure filing, 10,778 were related to a filing that was linked to a subsequent outcome of some sort, such as an auction or short sale. There were 1,896 properties that were related to a foreclosure filing but had no subsequent outcome. Those properties are classified as ""red flag"" properties.
The ""red flag"" properties are homes that have been in foreclosure for more than 18 months, meaning servicers have most likely decided not to complete the foreclosure.[COLUMN_BREAK]
""Red flag"" properties have no clear party responsible for them, meaning the costs of dealing with the properties are passed on to the city.
According to the report, abandoned foreclosures result from lenders deciding to charge off the mortgage on the property and consider it a loss, rather than proceeding with a foreclosure and property liquidation that would bring in less revenue than would be expended to complete the process.
Once a property has been charged off, the servicer is no longer responsible for it. If the property has been vacated by the owner, there is no one caring for it, and no one to hold accountable for any violations or problems with the property.
The city is authorized to seize and demolish a property after a period of time, but costs of such procedures can cost nearly $20,000 or more.
The report also points out there are more than 2,500 lender-owned properties that are vacant but to not have a vacant status registered with the city. As of the third quarter of 2010, unregistered vacant homes represented more than half of the lender-owned homes in Chicago.
More than likely those unregistered homes are not up to city maintenance standards.
The report also suggests key ways to address problems associated with vacancies and foreclosures.
Ã¢â‚¬Â¢ *Keep homes occupied* by pursuing foreclosure alternatives whenever possible
Ã¢â‚¬Â¢ *Hold servicers accountable* for the damages vacant properties can bring to communities
Ã¢â‚¬Â¢ *Increase the ability to enforce existing vacant property rules* by giving local governments the authority to force servicers to maintain vacant properties up to certain standards
Ã¢â‚¬Â¢ *Improve data sharing to increase information on vacant buildings*, as this would allow for early identification of compliance issues.