Foreclosure Seminar

Earlier this week I attended a program sponsored by the The Chicago Metropolitan Agency for Planning, Metropolitan Mayors Caucus and the Federal Reserve Bank of Chicago titled, “Taking Action: Local Government Strategies to Mitigate the Impact of Foreclosures on Communities.” The program was held on Tuesday, May 6, 2008, at the Federal Reserve Bank.

Along with much of the nation, metropolitan Chicago has recently seen a dramatic increase in the number of foreclosures. According to the latest figures in March 2008 from the Woodstock Institute: Between 2005 and 2007, the number of properties with foreclosure filings in the region increased by nearly 80 percent. The number of properties with foreclosure filings grew to 38,215 in 2007 which was an increase of nearly 32 percent from a previous high of 28,997 in 2006. This is on the heels of a 36 percent increase between 2005 and 2006.

Suburban communities have seen the largest recent growth in foreclosure filings. Between 2005 and 2007, the areas with the greatest increases included DuPage County, Northwest Suburban Cook County, and Kane County which all had the number of properties with foreclosure filings roughly double. It is likely that foreclosures will continue to rise in 2008 as regional property values stagnate or decline; refinance options remain limited for homeowners with adjustable rate mortgages; and the monthly mortgage payments on many loans reset to higher levels. However, as foreclosures mount, many suburban communities may also be unable to manage the foreclosure glut.

The objective of this meeting was to provide local government leaders a forum in which to discuss the tools and strategies necessary for mitigating the impact of foreclosures on community. The topics included:

• An overview of the regional foreclosure state of affairs and examine the implications of foreclosures on local government (revenue and assessments, property values, safety, etc.)
  
• Focus attention on the legal aspects of foreclosures in terms of the local authority to enact responsive ordinances and policies aimed at preventing the issues related to building vacancy
  
• Identify best practices, both locally and nationally, where governments have implemented innovative programs to address foreclosures within their communities (for example: maintenance ordinances, vacant building registries, and land banking)

Overall it was quite interesting and put the issue into perspective, some of the ideas are fits for us and I will push them forward here in Round Lake

Section 8 Questions

I have been getting some questions on Section 8 housing recently. So I thought I would address some of the questions here.

Section 8 housing is run by the Federal government by HUD (Housing and Urban Development Department). Locally the program is administered by the Lake County Housing Authority in Grayslake. The poor local housing environment has led to a growing number of homes being rented out and of course some of them are rented with the Section 8 rental program.

If you own a home and have to rent it, the program makes sense becuase the government is paying the rent on time and regularly. Where it becomes tricky is when the new tenants have less invested in the community then the home owners who live around them.

What I would encourage homeowners who are having legitimate issues with "any of their neighbors" is to contact the village. While we are unable to go into a house without being invited (not likely) we can bring pressure to bear with parking enforcement, property maintenance issues that are not being addressed. Contact the Building Department using this link. (An email will pop up). Code enforcement of parking, mowing, and general cleanliness can be very powerful towards fixing these types of issues.

If there is a loud party or something going on that is not appropriate call the Police, this is how you do it... Dial 911. I can't tell you how many times in the last 7 years someone has told me that such and such a house is doing such and such a thing, and I say did you call 911 and the answer is always as follows:

1. I did and they never come.
   
2. I don't want to be identified
3. I don't want to bother them.

When I hear excuse number 1, I think BS and then write the address down and find out if it's true, and of course it never is. With item 2 you do not have to be identified, and of course number 3 is why would you not want the police to do their job? Trust me the village spends a lot of money on training and equipment so we want them out using it!

What am I telling you? Please let the village know when we have a problem developing, I pride the village staff on being proactive and I prod them to be more proactive constantly, but we can't do and see everything, nor can we recognize every issue, so please let us know, if we can help we will.

Foreclosure Article in the Daily Herald

NOTE: The following article was on the front page of the Daily Herald yesterday, I have one issue with the numbers that the study used. 2000 census data was used for our housing unit total, and since then we have tripled in size and it stands to reason that we would roughly triple our housing units available, which consequently would lower the percentage they use since they use 2006 foreclosure numbers. Unfortunately that portion of my comments were not used. While I don't mean to minimize the effect of foreclosures on the community it certainly is not a fair assessment of the real percentage.

Tall grass.

Homes in disrepair.

For-sale signs clustered in a single neighborhood.

Suburban leaders say they are concerned when they see these things -- red flags that foreclosure is looming, or that it has already happened.

While elected officials say they can't provide money to solve residents' woes, some are getting ready to have their village halls offer other kinds of help. Entire communities can get a black eye from too many foreclosed properties, they said.

Suggestions on how municipalities can prevent foreclosures came at a recent meeting of the Metropolitan Mayors Caucus, which has 272 members from the Chicago area.

Many of the ideas presented were easy and free to implement. For example, villages could provide links on their Web sites to agencies that counsel distressed homeowners.

Round Lake Mayor Bill Gentes said it would make sense for his village hall to be a resource for residents who find themselves facing foreclosure.

Gentes' village had 60 foreclosures, or 38.49 per 1,000 owner-occupied units, in 2006, according to data on the six-county Chicago area compiled by the Woodstock Institute and distributed to government officials by the mayors caucus. Last year was the first year town-by-town data was collected.

"The American dream is homeownership," Gentes said. "It's not foreclosure."

Mayors who attended the conference said suburban officials are typically concerned about providing traditional services such as police and fire protection. Whether they decide to help residents facing foreclosure likely depends on if they believe the problem exists in their communities.

Foreclosure has become a national concern. About 179,600 foreclosure filings were reported in the United States in July, above the 92,845 logged in the same month in 2006, according to California-based RealtyTrac Inc.

Resetting of adjustable-rate mortgages and subprime loans that were made to borrowers with shaky credit are among the reasons for the foreclosure boom.

Beth Dever, housing director for the Metropolitan Mayors Caucus, said foreclosures don't affect just the families forced out of their houses. There are the ancillary effects on cities, she said, such as unruly lawns, delinquent property taxes, the potential for neighborhood blight -- and tarnished images of a town.

Dever said because municipalities have a vested interest in foreclosure, local governments should lend a helping hand to distressed homeowners, who don't always know where to turn. She said some mayors reported their village halls have already received calls from worried residents.

At minimum, Dever said, towns should be able to direct distressed homeowners to federal Department of Housing and Urban Development-certified counseling agencies. Towns also should know to recommend the Homeownership Preservation Foundation's HOPE hotline for confidential financial help.

Dever said residents might be more willing to approach a village hall for help.

"I think it's seen as a more comforting local entity than a faceless mortgage broker," she said.

Research shows about 50 percent of delinquent homeowners avoid contact with the lender in the hope the problem disappears, according to NeighborWorks Center for Foreclosure Solutions in Washington, D.C. Many in trouble don't act on quality advice.

Sheila McCann, executive director of the DuPage Homeownership Center, said some DuPage County towns allow her nonprofit group to use public buildings for homeownership seminars.

"It's a win-win for everybody in the community," she said. "Certainly, everyone doesn't want to see abandoned homes or foreclosures."

Gentes said he's concerned about one Round Lake subdivision now marked by abandoned homes, clusters of for-sale signs and other signs of distress.

Problems at the four-year-old Lakewood Grove subdivision, near Route 60 and Cedar Lake Road, stem in part from individual investors who bought a number of homes with the idea of unloading them for a quick profit, Gentes said. He said 10 to 15 homes have been abandoned at Lakewood Grove.

Some investors purchased houses and used a rent-to-own concept to lure occupants with poor or shaky credit. Gentes said the downfall came when the owners dramatically hiked the monthly payments because of higher taxes, sending the residents fleeing and leaving empty homes.

Gentes said he's seen newspapers and trash pile up at homes where no one's living. That can make the whole town look bad, not just a particular subdivision.

Dever said the mayors caucus has cited Chicago as an example of a city trying to prevent foreclosures through its Home Ownership Preservation Initiative. The program has been promoted on CTA buses and trains.

Part of it involves assisting borrowers connect with lenders to find ways to halt the foreclosure process. The city also has gone to faith-based organizations to spread the word about mortgage fraud.

Mayors such as Gentes have a better picture about foreclosures because the 2006 foreclosure report by the Woodstock Institute was its first city-by-city examination. The study was requested by Chicago's housing department.

Geoff Smith, research director of the nonprofit group that specializes in community economic development, said mayors can't take action about a foreclosure problem if they don't know what's happening in their backyards. He said the Woodstock Institute will release a second city-by-city foreclosure study at year's end, which can be compared to the 2006 data.

Carpentersville Village President Bill Sarto said he's willing to have his town provide information to residents in trouble with their homes. Carpentersville had 212 foreclosures or 30.26 per 1,000 owner-occupied units in 2006.

"I certainly see it as a problem for all communities where people are on the bubble or the bubble has burst beneath them," Sarto said.

Tips for avoiding foreclosure

Don't ignore the problem: The further behind you become, the harder it will be to save your home.

Contact your lender: Lenders do not want your house. They have options to help borrowers through difficult financial times.

Open and respond to mail from your lender: The first notices you receive will offer good information about foreclosure prevention options. Later mail might include important notice of pending legal action.

Understand your options: Learn about foreclosure prevention options at www.fha.gov/foreclosure/index.cfm. Contact a HUD-approved housing counselor: The U.S. Department of Housing and Urban Development funds free or very low-cost housing counseling nationwide. Call (800) 569-4287 or TTY (800) 877-8339.

Avoid foreclosure prevention companies: Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three months' mortgage payment) while a HUD-approved housing counselor will help for free if you contact them.

Don't lose your house to foreclosure recovery scams: If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home. Get professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.

Source: HUD

Where to turn

NeighborWorks America and the Ad Council have joined forces to target a public service advertising campaign at homeowners in danger of foreclosure. Two Web sites and a toll-free number are offered.

• Confidential financial counseling is available from the Homeownership Preservation Foundation's HOPE hotline at 1 (888) 995-HOPE. Free, unbiased advice is available in English and Spanish 24 hours a day.
• Foundation's Web site is at www.foreclosurehelpandhope.org. The foundation is a Minneapolis-based nonprofit agency dedicated to preserving homeownership and preventing foreclosure.
• Also check NeighborWorks America's Web site at www.nw.org/foreclosuresolutions. NeighborWorks is a national nonprofit organization created by Congress to provide financial support, technical assistance, and training for community-based revitalization efforts.

Attack of the Birds

Last night was quite the night. The last few years my house has suffered from an invasion of birds who fly into one of our attic vents on the side of the house and force there way through the vent and nest in the tubing up in our attic. A few years before that we had a big bee problem in the same spot. So I actually preferred the birds!

I have hoisted my self into the inferno/fiberglass hell that is our attic, and discovered that Neumann Homes did there usual shoddy job with the vent, by not installing any cover or any formal attachment which the birds pecked away in 2-3 seconds. So using my trusty roll of duct tape I reattached the vent as best I could while sweating and scratching from the heat and fiberglass.

Anyway over the last few weeks I have heard the pleasant chirping of little birds when I wake up. A nice thing? Not when you know they are in your house! Since I don't have a ladder long enough to get after the outside of the vent, I am promised myself that I would go up to the attic over the weekend and fix the vent again. Which I hate.

Well anyway, last night the birds pecked there way through the vent tube and were banging around, chirping and what sounded like (I kid you not) speaking in tounges all night long. They appeared to be having a convention right above my bathroom where the vent fan was. It also sounded like they had a kids toy that had some form of repetitive beeping noise with them.

So at 1am I am in my bathroom with all the lights on glaring at the vent where all the noise was coming from and disturbing my limited beauty rest. When I decided to turn the fan on and hopefully mulch the birds and the kids toy. Thats not what happened but it scared the crap out of the birds, which had some value, and drove them some where else in the attic, because they quieted down.

So when I get home tonight I am venturing up into the attic and duct taping the vent with 6-10 rolls of tape if I have to, and then this weekend I am going to venture up the side of the house and figure out a way of blocking the vent. Delightful!

Metropolitan Mayors Forum on Housing

With the changing housing market there are quite a few "rules" that are changing as well. Are elderly residents afraid they might not be able to remain in the community once they sell the home they've lived in for years? Are local businesses starting to complain that their employees are having trouble finding homes close to work? I have had these questions directed at me more then once in the last year.

The Metropolitan Mayors Caucus is sponsoring a December Housing Forum "Supporting Workforce Housing Deals in Our Own Backyard: A Conversation with Mayors and Developers on the Give and Take in a Changing Environment." Co-Chairs of the Caucus' Housing Committee, Mayor Zenovia G. Evans of Riverdale and Mayor Rita L. Mullins of Palatine. I am planning on attending to see if there are answers to the questions!

This forum will be an opportunity for Mayors and Homebuilders to discuss the questions above, focusing on:

• The changing housing market and how it will affect housing production.
• Innovative local and regional housing issues and efforts, including: interjurisdictional initiatives; fee negotiations; community acceptance of housing policies and developments; school funding debates; and housing preservation.

I think this will be a great opportunity to meet some of the homebuilders in the region that are doing workforce housing. The forum will allow attendees to share their ideas regarding what can be done on the local and regional levels to encourage the creation or preservation of workforce housing. Last year I attended and over 100 municipal and development representatives offered their thoughts on how the state could help with this effort; this year, the committee is following up to explore what is being done "on the ground" in the Chicago area, and what else could be done, to create a balance of housing options across the region.

While I think our housing stock is moving in a differnt direction it was fascinating to hear about this issue that affects western Lake County in a big way.

Special Census Starting

This week we are starting a special census run by the United States Bureau of the Census. It is the second census we have done in my 5 years as Mayor. Let me talk about the last one since we don't know the results of this one, however this one will be almost identical to the last one although the numbers will have changed. First some facts about the special census and some information on the process.

• The reason so many municipalities do a special census is because MFT (Motor Fuel Tax) funds from the state of Illinois are based on population and the most recent census numbers are used.
• On the average we get between $100 and $120 per person per year from the state in MFT funds. Our numbers are based on the most recent census figures (2003 special census) of 10,100.
• The 2003 special census took us from 5,400 to 10,100, so the next fiscal year we got an additional $120 x 4,700 people or an additional $564,000 to the village starting in fiscal year 2004.
• The best part about this is we receive $564,000 more every single fiscal year until the 2010 census, which is an additional $3.38 million.
• Some of the facts we learned from this census is that the typical single family home in Round Lake has 3.24 people in it, and attached homes have 2.73 people in them, which is quite close to the 2000 census numbers as well.
• The village pays for the entire process, in 2003 it cost us $120,000 to hire, train and actually do the count which was administered by a nice lady from the census. So the board had to weigh the potential for making sure that a special census made financial sense.
• In the 2003 case we knew that we would have to have an additional 1,000 people in the village from the 2000 census figures to cost justifies the up front costs.
• The village has about 1,300 to 1,500 more housing units occupied since the 2003 special census. If you use the people per home numbers above, you can get a rough approximation of a current population of Round Lake of around 15,000. The second way of estimating is how many water bills we mail out.
  
• The difficulty with these estimating techniques is the census in 2003 took about a month and a half and we have no real easy way of determining which homes were built and occupied before and after that time period.

My best guess is that we will be at about 15,000 people, which if correct will bring us, an additional $575,000 per year. This means that the village’s use of the special census has taken our MFT revenue from $650,000 to $1,800,000 in 6 years. By the way the picture is a 1930 census taker meeting a familly of 5 who appear to live in a trailer.

Regional Housing Assessment

NOTE: This was a post from last October which while I was rereading the blog (shamelessly for ideas on what to write this morning) I thought that this illustrates some of the issues facing the county with transportation.

A few weeks ago I attended the Metropolitan Mayors Caucus. There were numerous presentations that gave some big picture looks at the six county Chicagoland Area. One of the talks was on a Regional Housing Needs Assessment for the region. I got the presenter to send me the slide show, so I could present it to the Village Board because I thought it was important for them to have this overview in the back of their minds. I gave the presentation a few meetings ago to them and the public as well.

However there were some very telling slides that explain exactly what we are facing in the terms of "where we live" and "where we work" and to me this illustrates the need for transportation improvements which in turn will/should lure employers closer which will then reduce congestion even more.

The first slide below shows the housing increase from 1990-2000 taken from Census records. Round Lake is not as colorful since a vast majority of our growth has taken place since the 2000 census. However the Round Lake Area did grow thanks to Round Lake Beach. You can clearly see the area on the graph below.

The next image (below) is where the jobs are in 2000. You can see that they are either along the 294, Lake Cook corridors or downtown. As an observation the Baxter facility on Wilson and 120 does not even register and they have 2,300 plus jobs there.

If you then take the two pictures and graph them over each other, you get a look at the Housing vs. Jobs mismatch for the decade of the 90's

What does this mean to us? It's something that any resident intuitively understands while commuting or trying to drive anywhere during rush hours. However I think it illustrates the need for the 120 bypass and traffic improvements in the area. The construction of the 120 bypass will attract more business/jobs to the area which will reduce our commutes and ease congestion. However large employers are not coming to our area if they don't have road improvements, so its a catch 22 type of situation. Which is why the next 2-3 years are so important as we try to get the Route 120 bypass off the drawing board and on to the ground.

Consolidating the Round Lake's? Part One

One of the questions I always get asked is "when will the Round Lake's ever consolidate"? I am sure the mayors of the Beach, Park and Heights get the same question all the time as well. To tell the truth I get people who think I am the mayor of all the Round Lake's anyway, simply because they don't understand the 4 communities are actually separate.

So what's the answer to the question? Well I have one that's humorous and one that's more factual. Lets stick to the factual one here however. Yes I do think its a good idea, in fact I would like to see it happen. The positives would and could be enormous in my opinion.

• Savings-- based on economies of scale for operations, the ability to have more departments that can serve specific needs such as housing, healthcare.
• Political Muscle-- the new community would be the second largest in Lake County. It would also be on of the top 30 populations in the state of Illinois. (ESTIMATED from the US Census) The consolidation would put a merged community somewhere around 56,000 to 60,000 people.
  
• Round Lake (15,000)
• Round Lake Beach (30,000)
• Round Lake Heights (4,000)
• Round Lake Park (7,000)

There are many more potential benefits that I will talk about in a later post but I think this is a concept whose time is getting closer.

Mayor Blogs on Traffic Congestion from the Future-- 2030

As a follow up to the post on Housing and Jobs the same presentation had a portion dedicated to traffic congestion The first graphic above is traffic in 1996, the second and more troubling graphic is the one of the traffic congestion in 2030. Again a reason to push traffic improvements and the 120 bypass! Do I sound like a broken record. By the way as near as I can tell, Round Lake is right near the L in Lake county on the graphics.

If anyone is interested in the complete slide show I made it into a PKzip file with each slide as a jpeg It's 2.7mb in size!

I am attending the Metropolitan Mayors Caucus Today and Tomorrow

I have been looking forward to this event for some time. The Metropolitan Mayors Caucus is sponsoring a retreat entitled "“I Have A Town to Run. Why Should I Care About the Region?"” To give you a quick overview of the program I have distilled the agenda to its basics for you here.

Welcoming Remarks
The Honorable Richard M. Daley

"“New Realities for Chicagoland"
Bruce Katz Vice President and Director Metropolitan Policy The Brookings Institution

Governing As A 21st Century Mayor: The Times They Are A Changing
Paul M. Green, Director, School of Policy Studies
Arthur Rubloff Professor of Policy Studies Roosevelt University
Political Analyst, WGN Radio

Exercising the Region'’s Political Clout
Washington and Springfield Insiders will discuss how the region'’s Mayors can collectively affect federal and state policy on key municipal issues.

The Caucus Priority Issues: Why You Should Care
Several prominent regional leaders will discuss the value of Mayors working together to resolve issues that affect the region'’s overall quality of life. Topics will include clean air, education reform, housing and regional land use and transportation planning.

Tales from the Trenches
Three of the region'’s longer-serving Mayors will provide light hearted perspectives on why they believe in collaborating at the regional level and how it has benefited them as elected officials.

Issuing A Challenge: Get Involved
John McCarron, Urban Affairs Writer and Adjunct Professor,
Northwestern University Medill School of Journalism

The retreat is underwritten by the MacArthur Foundation

Comments on Residential Development

Yesterday at the village board meeting we had a public hearing on the Ryland homes parcel which is South of Dawn Marie and running down to Route 120. The project will bring our sewer to the corner of Wilson and 120 and trigger a large commercial and industrial park in the area bounded by Fish Lake Road, Route 60, Bacon Road and Route 120. At the public hearing there were some questions about the Ryland project which has evolved over time into something a little more palatable to the village.

One of the questions was about when are we stopping development? How can we continually approve new development every meeting? While these questions were out of left field factwise, since the village has NOT approved a new development in over a year and a half. As an aside I would point out that in the last few years the village has approved 2 new developments and 2 add on's in the last 3 years. The largest of these projects was the 180 senior oriented homes for Pulte on Curran Road and 120 and the first senior project in the area.

Lets face the facts, the village is on the downside of residential development. Over the last few years I have consistently spoken out with the same thoughts and premises about residential development. Let me reiterate them:

• Any residential development must meet and serve the large vision established by the village's comprehensive plan.
• It must have a missing need for a type of housing in the village (estate residential, senior housing etc.).
• It better be awfully good for the village with some large amenity and or benefit.

I have been repeating this at the village hall, in speeches to the chamber of commerce, at presentations to other taxing bodies and its been written about in the papers. But actions speak louder then words, so take some time and look at the residential development that has been done. Evaluate it, understand it and then realize the village is indeed sticking to the big goals in our comprehensive plan. So come in out of left field, and join the progress the village is making towards making the area a better place to live.