Actor John Cusack addresses foreclosure epidemic at City Hall
BY FRAN SPIELMAN City Hall Reporter firstname.lastname@example.org August 14, 2012 12:34PM
The number of homes in the Chicago area that received foreclosure filings in July jumped from a year ago, even as the number declined nationally.
Chicago metro area
12,683, up 35 percent
One in every 299 homes
13,774, up 29.6 percent
One in every 385 homes
191,925, down 9.8 percent
One in every 686 homes
Updated: September 16, 2012 6:16AM
Hollywood star power—in the form of Evanston-born actor John Cusack--showed up at Chicago’s City Hall on Tuesday to support using the city’s condemnation power to help stem the foreclosure epidemic, but Mayor Rahm Emanuel shot down the idea.
During a joint hearing by the City Council’s Finance and Housing and Real Estate Committees, Cusack
stood quietly in the VIP box normally reserved for members of the mayor’s cabinet during testimony that appears to be going nowhere.
In a whispering interview while still half-listening to the testimony, Cusack said he was there to support a
friend who was among those scheduled to testify on the idea—and also because he believes something dramatic needs to be done.
He identified his friend as Kevin McCabe, co-founder of Community Partnerships. The group is reportedly working with Mortgage Resolution Partners on the eminent domain idea now under consideration in Chicago and elsewhere around the nation.
“It’s an interesting idea to help keep people in their homes,” Cusack said.
“If something isn’t done about the foreclosure problem, there’s an increased danger to our city. Property values will come down. People will continue to get thrown out of their homes. It may be imperfect,” but it’s an intriguing idea that worth considering, the actor said.
Emanuel strongly disagrees. He called the foreclosure epidemic a “national issue” that President Barack Obama is appropriately trying to address at the national level.
“The idea of using eminent domain is not one I support,” the mayor said at an unrelated news conference called to showcase CTA improvements and ridership gains.
“I don’t think it’s the right way to address the problem. There are other places to do it. I don’t think it’s the power of the city to deal with the housing issue. We have a national issue. We have to address the issue. I just don’t think that’s the right instrument.”
Emanuel wasn’t the only voice of dissent.
Timothy W. Cameron--managing director of SIFMA Asset Managers Group comprised of securities firms, banks and 30 of the nation’s largest asset managers--argued that the use of eminent domain would “do more than good” to Chicago.
“The worst harm will be felt by Chicago residents themselves, as they will find it harder or impossible to obtain credit,” Cameron said in a statement distributed to reporters prior to Tuesday’s hearing.
“If performing mortgage loans are taken from their holders, this will cause significant losses to those holders and cause those who fund mortgage loans to act very cautiously. The losses will be borne by the pension plans, 401k plans and individual citizens who are invested in the securities….We need mortgage investors and lenders to come back to these fragile markets. But this plan will force both groups to avoid them.”
The eminent domain idea championed by Ald. Edward M. Burke (14th), chairman of the City
Council’s Finance Committee, is patterned after a concept under consideration in San Bernardino County, Ca.
Chicago would use its sweeping powers of eminent domain to seize underwater mortgages. The effort would involve creating “securitized packages of loans” that would be offered to private investors at a “steep discount.” Loans would then be “written down to a fair market value” to create a new mortgage with a reduced principal and lower monthly payments more affordable to struggling homeowners.
Asked later about Emanuel’s opposition, Burke appeared to back-pedal, calling Tuesday’s
hearing “informational” to make Chicagoans aware of the tactics under consideration in California and across the nation.
“I think it was quite informative and worthwhile to spend the time learning about what is happening around the country,” the chairman said.
To say nothing of the chance to rub elbows with Cusack.
“Yeah. He’s a very big fan of this idea,” Burke said.