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Bus Tour Highlights Trauma of Foreclosure, Eviction

By Megan Cottrell | June 9, 2013 11:33am
 Maria Delores Calvillo
Foreclosure tour
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ROGERS PARK — Maria Delores Calvillo never expected her house to be a stop on a city bus tour.

Her modest three-bedroom duplex isn't a celebrity's birthplace or the site of some historical event. But on Saturday, her home in Rogers Park was the final stop on a citywide tour of vacant and foreclosed homes, put together by several community groups trying to prevent foreclosures and evictions.

“We need to be united,” said Calvillo. “The abuse will only stop when we stand up and start fighting.”

Calvillo is a member of one of three groups putting on the event that drew three buses of Chicago residents.

Starting at 75th and Dorchester on the city's South Side, and continuing up through the West and North sides, community members from the Centro Autónomo de Albany Park, the Chicago Anti-Eviction Campaign, and Communities United Against Foreclosure and Eviction, talked about their experiences with foreclosure, homelessness, vacant homes and eviction.

“The same communities that are devastated by empty homes and foreclosures are the same communities where we see school closings and other resources lacking,” said Jorge Ortiz, Calvillo's son, who also is a member of Communities United. “The tour is about showcasing the minimal effort that's been taken to stop the devastation in so many neighborhoods.”

The tour aimed to unite folks from all sides of the city who are continuing to deal with the fallout from the housing crisis and decades of disinvestment in their communities, said Roberto de la Riva, an organizer with Centro Autónomo.

“We hear media outlets saying the market is getting better but that's not really the case in these neighborhoods,” said de la Riva.

De la Riva said the groups are targeting the Federal National Mortgage Association, more commonly known as Fannie Mae, saying the government-sponsored mortgage trading company is pushing residents out of their homes and selling them to investors instead.

“We don't want to have this policy of displace and replace,” said de la Riva. “We want people to stay in their communities where they have lived for 15 to 20 years.”

Calvillo has lived in her home at 7250 N. Claremont for nearly 14 years. She paid thousands to a lawyer who promised her a loan modification, but later disappeared, leaving her in foreclosure, sge said. She's now waiting to be evicted, despite trying to work with Fannie Mae to stay in her home.

“We've been flighting to have Fannie Mae to sell the house back or rent the house back, but the response has been minimal,” said Ortiz.

Fannie Mae spokesman Andrew Wilson said the organization can't comment on specific cases, but in general, it does not offer principal reductions, nor does it sell or rent homes back to former homeowners, due to regulations imposed by the Federal Housing Finance Agency, which regulates Fannie Mae.

“Our first priority is to prevent foreclosure, but we need people to reach out as soon as possible and to pursue the options available to them,” said Wilson.

Wilson said Fannie Mae sells 60 percent of its homes to new owner-occupants, rather than investors.

“Our goal is to sell to owner-occupants whenever we possibly can because we think that has an important effect of helping the neighborhood to stabilize,” said Wilson. “Owner-occupants are often willing to buy at a better price, which also gives a better return for the taxpayers.”

But foreclosure expert Spencer Cowan of the Woodstock Institute, a Chicago-based research and advocacy organization, said Fannie Mae's policy of not offering principal reductions may be counterproductive. The agency is concerned about creating a “moral hazard” of incentivizing strategic defaults, prompting homeowners to choose not pay their loan, hoping they can get a better price after foreclosure.

But Cowan said most homeowners wouldn't take that kind of risk.

“There's a huge impact on the credit score. It's a very expensive decision,” said Cowan “There is a huge downside risk. If you do get foreclosed, you have to move, and that also entails a lot of disruption.”

Cowan pointed to studies showing that, used carefully, principal reduction brings a better return on the property.

“Not allowing principal reduction is inflicting harm on neighborhoods and on the taxpayers who have bailed out Fannie and Freddie, by reducing the return that they could get,” said Cowan.

While Cowan applauded the tour's effort to draw attention to the foreclosure crisis, he said the housing market isn't the sole reason for the large number of empty homes in many Chicago neighborhoods.

“The city has been losing population for decades — and not evenly. When the tour goes around and looks at some of these neighborhoods, they will see the impact of years of disinvestment and population loss,” said Cowan. “They are going to see areas where there are whole blocks boarded up and abandoned.”

Ortiz said he hoped Saturday's tour would draw the attention of politicians and policymakers and helps create change. Without it, he said, the devastation will only continue.

“If we keep letting the market handle the situation, there's no end in sight for this crisis for people in the city,” he said.