OBAMA'S FED SUE RAHM EMMANUAL OVER VACANT BUILDING ORDINANCE
By Michael Lansu Staff Reporter December 13, 2011 5:36PM
Mayor Rahm Emanuel on Tuesday defended the city’s new vacant building rules after the Federal Housing Finance Agency filed a federal lawsuit to challenge the ordinance that requires the mortgage agency to register vacant buildings with the city and pay fines if the properties are not properly maintained.
The FHFA, wants the city to exempt properties with mortgages held by Fannie Mae or Freddie Mac, which the federal agency supervises and regulates. The agencies hold mortgages on more than 250,000 Chicago homes.
The lawsuit filed in U.S. District Court in Chicago claims Fannie Mae and Freddie Mac are exempt from supervision or regulation. The suit is asking a judge to declare the FHFA immune from the ordinance and order all money paid under the ordinance refunded.
In October, the city passed an ordinance to hold banks and other mortgage holders accountable for securing their vacant and foreclosed properties. Aldermen had approved a much tougher ordinance last summer, but watered it down after city attorneys feared that the earlier version would not withstand a court challenge.
The earlier version required banks to start maintaining a property as soon as the building became vacant. Instead the ordinance starts the clock 60 days after default. Vacant properties must be registered with the city, with a $500 fee, and fines can reach as high as $1,000 a day.“Protecting our residents and neighborhoods from vacant properties and foreclosure is a key goal of this administration,” Emanuel said. “We have successfully clarified the rules surrounding vacant properties, and we will be working with all parties to ensure that these properties are returned to useful status as quickly as possible.”
