Profitwise News and Views

May 2004 Issue
Special Edition

• Neighborhood Housing Services of Chicago Home Ownership Preservation Initiative


• Remarks by Michael H. Moskow, President and CEO, Federal Reserve Bank of Chicago


• Remarks by Richard M. Daley, Mayor, City of Chicago


• Alicia Williams, Vice President, Consumer and Community Affairs, Federal Reserve Bank of Chicago


• John G. Markowski, Commissioner, City of Chicago, Department of Housing


• Bruce Gottschall, Executive Director, Neighborhood Housing Services of Chicago


• Bruce Paradis, President and Chief Executive Officer, GMAC-RFC


• Steve Paton, Vice President, Chase Manhattan Mortgage Corporation


• Richard Monocchio, First Deputy Commissioner, City of Chicago, Department of Housing


• Conclusion


• Neighborhood Housing Services Programs


• May 2004 Issue, Special Edition (PDF,137KB)

Next Steps
Richard Monocchio
First Deputy Commissioner, City of Chicago Department of Housing

Mr. Monocchio explained the challenge by Mayor Daley to all city agencies to deal with vacant buildings. It is called the Troubled Building Initiative. Members of every agency in the city, from the Department of Sanitation to the police and fire departments, will report any possible abandoned building (and associated criminal activity) to the Department of Housing, so immediate steps may be taken before the property negatively impacts the community. There are currently 1,200 units of housing, single and multi-family, in some stage of rehabilitation with either the city or a nonprofit taking control to rehab the property, and ultimately selling it to owner-occupants.

The 311 Campaign

Mentioned by Mayor Daley, the 311 Campaign, will connect a caller facing foreclosure or unable to make mortgage payments with an experienced credit counselor to work on their individual situation. The city has also enlisted schools, and Peoples Energy to get the message out to families who have been unwilling to contact their lenders, and to show them that the city is committed to saving their home and preventing foreclosure. The Department of Housing is planning to issue quarterly reports on foreclosures and vacant properties, and will reconvene the HOPI participants every six months to assess the progress of the initiative.

Chicago Foreclosure Findings

• Foreclosures are starting earlier in the life of mortgage loans. In 2001, 54% of foreclosures were on loans two years old or less, compared with only 16% in 1993.


• Between 1993 and 2001, foreclosures started on FHA/VA mortgages did not increase.


• Subprime foreclosures grew to 3,878 in 2001, from 662 in 1993, nearly a 500% increase on loans with interest rates that exceed 35 basis points above prime.


• Over 3,000 Chicago families lost their homes in 2001.


• Only 25 lenders/servicers held 75% of the foreclosures started in Chicago in 2001.


• Chicago's asset control area program has reached 200 foreclosed FHA properties and put them back into productive use in the last 18 months.