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Illinois lawmakers to banks: 'Secure your vacant properties'
State Rep. Karen Yarborough is ushering a piece of legislation, SB 16, through the General Assembly that would hold all entities tied to these property responsible for the upkeep
or face liens on their properties. Sources tell us the final language is being hashed out in Springfield today. Lawmakers have until the end of the day to get the bill through both chambers.
As Yarbrough sees it, the banks' unwillingness to care for the properties has become "a limitless drain on taxpayers." In Chicago alone, taxpayers spent roughly $13 million knocking down or boarding up these vacant homes in the last year alone. And she's putting financial institutions on notice that it is time they pay for the cleanup themselves.
Major banks are fighting the bill tooth and nail, Yarborough explains in an op-ed published by the State Journal-Register last week. Lenders dispute that they own many of the properties. A handful of banks explained why in our recent article:
JPMorgan Chase, for example, says that while it may have been listed as the noteholder on hundreds of mortgage deeds, in many cases the bank is merely hired by the owner as a servicer--an entity hired to maintain the property. "It's our policy to register homes with the city if we become the owner," said spokesman Tom Kelly.Their argument comes down to dollars and cents. The Reporter found that compliance would cost those same lenders millions.
Meanwhile, US Bank--which is named as the trustee on many of the properties analyzed, says that it's up to the servicers to register properties. "For trust-owned properties the servicer of the mortgage loan is responsible for registering the properties in accordance with applicable city ordinances," said spokeswoman Lisa Clark in an email.
In Chicago alone, ten banks -- including some of the city's financial partners JPMorgan Chase, Bank of America and US Bank -- would be on the hook for more than $2.2 million in outstanding registration fees alone had the city enforced the vacant buildings ordinance since it was adopted two years ago. (Get the run down of how much each lender owes here.)
Ald. Pat Dowell has been working to strengthen the local ordinance. And she's recently won over a major supporter. Unlike his predecessor, Mayor Rahm Emanuel is now embracing her proposal, Dowell says. Until the state adopts the stricter policy of holding all entities with a financial stake in the vacant properties accountable, Dowell says city officials' hands are tied.