The Illinois General Assembly passed a bill Wednesday that would fast-track the foreclosure process for abandoned, vacant homes while funding foreclosure prevention efforts throughout the state.
The legislation, which now will be considered by Gov. Pat Quinn, could shrink to 90 to 100 days a residential foreclosure process that can take as long as two years in Illinois. It also would require lenders to pay additional fees to file foreclosure actions, and the estimated $41 million in fees collected annually would be used to fund homeowner foreclosure counseling and prevention efforts.
The measure was passed by the Senate Wednesday and the House Tuesday.
"It empowers communities and municipalities to have the funding necessary to maintain and stabilize communities," said Sen. Jacqueline Collins, D-Chicago, the chief sponsor of the bill in the Senate. "It's the first step to putting some stability in the housing market."
Lenders could ask courts to fast-track foreclosures for abandoned single-family homes and multifamily buildings that have six units or fewer and are not legally occupied by a homeowner or another occupant. The shortened timeline could also apply to homes under construction where no activity has taken place for at least six months and there has been damage to the property. It would not apply to vacant buildings that are secured but are either for sale, part of a probate action or comply with local regulations.
"In most neighborhoods, there is still some kind of market," said Adam Gross, director of affordable housing at Business and Professional People for the Public Interest, which helped craft the bill. "It's not a vibrant market, but there's some kind of market. If you have a property that sits vacant for 600 days, whatever neighborhood it is, it's going to be worth a lot less at the end of 600 days than at the beginning of that 600 days. This has the potential to be beneficial in every neighborhood."
In addition to the $50 filing fee charged to lenders in foreclosure actions, the legislation also would require lenders that filed at least 175 foreclosure complaints during the previous calendar year to pay an additional $500 per foreclosure complaint. Those that filed at least 50 to 174 foreclosure actions would pay an extra $250 and those that filed no more than 49 foreclosure actions will be assessed an extra $50 fee.
Seventy percent of the collected fees would be used to help municipalities offset their costs to secure and maintain neglected buildings. Most of the remaining funds would be used to make grants to assist foreclosure prevention programs and housing counseling programs throughout the state.
The bill's proponents estimate that the additional housing counseling funds could benefit 18,000 homeowners annually, while the ability to speed the foreclosure process for abandoned homes by as much as 17 months could save lenders $43,000 to $89,000 per property. Using a conservative estimate of 5,000 foreclosure cases fast-tracked annually, that would generate savings to the financial industry of almost $214 million a year.
Under the bill, Chicago aldermen also would receive notices of foreclosure on properties in their wards.
The bill would take effect June 1.
mepodmolik@tribune.com | Twitter @mepodmolik
Bill passes to fast-track foreclosure of abandoned properties in Ill.
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Bill passes to fast-track foreclosure of abandoned properties in Ill.
