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Chicago Home Auctions Get Attention from Aldermen, Realtors

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By : John Cutts    99 or more times read
Chicago home auctions have been getting the attention of aldermen and realtors because of the still high number of properties getting delinquent and foreclosed upon.

According to a real estate firm, out of the almost 34,000 residential units currently for sale in the area, nearly 20,000 units are foreclosed homes in Chicago, representing a whopping 58 percent of the total inventory.

To help slow down the flow of distressed properties into foreclosure lists, Chicago aldermen have proposed to use 20 percent of the city’s tax increment financing to help address the foreclosure problem although they are not yet clear how they can directly address the crisis.

Some of the aldermen, however, explained that any improvement in neighborhoods carried out through TIF funds would increase property values and ultimately reduce the number of underwater properties and the number of underwater homeowners forced to abandon their homes.

Aldermen said that the city has $1.3 billion in surplus TIF funds, so they should increase the percentage allocated to affordable housing. Among the plans under the proposed TIF-funded affordable housing program is to buy properties from Chicago home auctions and turn them into affordable homes or rental properties.

Alderman Walter Burnett explained that when vacant properties are turned into tax-paying assets, the city gets more sources of funds for its housing programs, including cutting down the number of pre foreclosures in Chicago.

The Chicago Department of Community Development will lead the program if approved. Officials estimate the flow of about $100 million in TIF money to the program every year.

TIF funds started to be spent for rehabilitating blighted neighborhoods in the 1980s under the tenure of Mayor Harold Washington, but the funds faced fierce criticism over the past several years.

Another group putting renewed focus on distressed and foreclosed properties is realtors. More and more real estate professionals are getting trained to become experts in handling distressed properties and short sales. They said that the percentage of troubled properties continues to rise, ranging from 20 percent in Saint Charles to about 75 percent in Lincolnshire, Buffalo Grove and Glenview.

In Wauconda, about 61 percent are distressed. In the suburbs of Chicago, the percentages of properties in foreclosure are even higher.

Realtors said that professional trainings equip them with tools to deal with oftentimes emotional homeowners and to walk them through short sales that prevent their properties from going into Chicago home auctions and thereby contain the damage on their credit records.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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