Some Banks Not Making Good on "Bank Blight" Fines

City passed a law last summer mandating banks take better care of foreclosed-upon properties

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    NEWSLETTERS

    A new law requires mortgage holders to register vacant properties and do basic upkeep, but some appear to be foreclosing and then closing their eyes to the properties they own. Lisa Parker reports. (Published Thursday, Sep 13, 2012)

    Chicago's coffers have collected about $700,000 in the year since a new ordinance required banks and other financial institutions to better maintain the properties they foreclose upon, a review of city data shows.

    And while most banks are paying up on the fines they're levied, there are those that aren't.

    In the most recent data available, Deutsche Bank National Trust had the highest outstanding fines in both March and April of this year. Others making the list include Chase Home Finance, Citi Financial Services and MB Financial.

    "Banks that are not what I would call "home-grown banks" are the banks that seem to be the hardest to get them into the game," said Ald. Pat Dowell (3rd).

    The Chicago City Council last July unanimously passed the ordinance mandating that financial institutions pay more attention to the homes on their books. Mayor Rahm Emanuel said at the time that a foreclosed home brings down the value of those surrounding it by about $7,000.

    In addition, said Pastor Mike Neal of Chicago's Bronzeville neighborhood, those boarded-up, dilapidated properties bring sex, drugs and rodents.

    Neal says he and his neighbors work hard on keeping their homes maintained, and wonders why the owner of the building on East Pershing -- MB Financial -- doesn't do the same.

    To the bank, Neal had a message:

    "I'd like for you to treat this building as if you lived across the street from it, like I do. And if you had to see it everyday, how would you want it to reflect where you live?" he said.

    MB Financial took ownership of the building through foreclosure. And as the foreclosure crisis continues to squeeze Americans, Illinois remains one of the hardest hit states.

    "A blighted vacant property where the owner doesn't pick up their trash, the stairs are falling apart, the back yard is full of debris.. These financial institutions need to be responsible in our communities.. we need help," said Dowell.

    Owners and financial organizations that don't do the work to keep their properties clean and safe  face steep fines. That money, said Dowell, goes toward hiring more city inspectors.

    With regard to the property near Neal, city records show it has a lengthy history of compliance problems. Prompted by NBC Chicago's questions, MB Financial sent a crew to inspect the property and subsequently erected a fence and removed debris from the adjacent property.

    The bank said a sale of the building was completed in late August.