WBEZ | Neighborhood Housing Services http://www.wbez.org/tags/neighborhood-housing-services Latest from WBEZ Chicago Public Radio en Saving greystones with blood, sweat -- and branding http://www.wbez.org/series/dynamic-range/saving-greystones-blood-sweat-and-branding-105992 <p><p><iframe frameborder="no" height="166" scrolling="no" src="https://w.soundcloud.com/player/?url=http%3A%2F%2Fapi.soundcloud.com%2Ftracks%2F82411229&amp;color=ff6600&amp;auto_play=false&amp;show_artwork=false" width="100%"></iframe></p><div class="image-insert-image "><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/abandoned%20greystones%20flickr%20eric%20alix%20rodgers.jpg" style="height: 413px; width: 620px;" title="Vacant and neglected greystones in Chicago’s Oakland neighborhood. (Flickr/Eric Alix Rodgers)" /></div><p>Greystones are to Chicago what brownstones are to Brooklyn. And while many of these stately, limestone-faceted beauties line the grassy boulevards of wealthy North Side neighborhoods, many others exist in a state of neglect, disrepair or abandonment.</p><p>These decrepit greystones are generally located in some South and West Side neighborhoods whose residents were historically deprived of mortgages and subject to redlining. They&#39;re struggling now with low rates of home ownership and high rates of vacancy that have only gotten worse thanks to the real estate collapse. Add to that the stigma that comes from poverty, and you have a recipe for neighborhood neglect.</p><p>The last few years have thus been quite troubling for preservationists and community developers who want to both help struggling neighborhoods and save an iconic part of Chicago&rsquo;s native architecture. One affordable housing developer phrased the essential question this way: &ldquo;How do we start potentially building a market to rebuild interest in greystones and get people into these vacant buildings?&rdquo;</p><p>That developer is Matt Cole, who runs Neighborhood Housing Service&rsquo;s Historic Chicago Greystone Initiative. The program is aimed at preserving, restoring and modernizing these buildings, and NHS offers both educational and financial resources to owners and potential buyers, whether it&rsquo;s advice on how to remodel or affordable loans that make it possible to do a full gut rehab on a neglected two-flat.</p><p>But in addition to these traditional sorts of community development strategies, Cole and his colleagues have turned to a tactic more common in commercial real estate development: neighborhood branding. &nbsp;</p><p>Anyone who&rsquo;s ever been offered an apartment in &ldquo;West Bucktown&rdquo; knows that developers will often rename a gentrifying neighborhood in order to lure a wealthier set of potential buyers. But in this case, Cole and his colleagues focused their efforts on giving stigmatized neighborhoods the kind of narrative that would make existing, long-time residents puff up their chests.</p><p>Their test case was K-Town, a 16-block portion of North Lawndale named for a number of streets &ndash; Karlov, Kildare, Keeler, Kostner, etc. &ndash; that start with the letter &quot;K.&quot;</p><p>K-Town is traditionally lumped in with the rest of Chicago&rsquo;s West Side &ndash; so often described as poor, downtrodden and crime-ridden.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/K-town%20greysones%20google%20maps.jpg" style="height: 345px; width: 620px;" title="Rows of renovated greystones line the street in K-Town. The neighborhood was placed on the National Register of Historic Places in 2010. (Google Maps)" /></p><p>But this portion of North Lawndale defies that stereotype: It&#39;s actually quite stable, according to Cole, and has a striking share of Chicago&rsquo;s built history. &nbsp;</p><p>&ldquo;It is this incredible microcosm of Chicago architecture that really can&rsquo;t be found anywhere else in the city,&rdquo; Cole said. &ldquo;You have fantastic greystones on one side, then workers&rsquo; cottages in the middle. Then also these sort of Dutch gabled buildings on the front &ndash; these two-flats and three-flats that were built in the 1930s &ndash; then bungalows start coming in.&rdquo;</p><p>Two years ago NHS worked with a number of state and local preservation agencies to get K-Town added to the National Register of Historic Places.</p><p>Charles Leeks, NHS&rsquo;s neighborhood director for North Lawndale, says there have not been measurable financial results &ndash; in the form of rising property value or additional homes sold or rehabbed &ndash; since K-Town was added to the National Register. But he said he&#39;s seen a noticeable uptick in neighborhood pride and cohesion.</p><p>&ldquo;The real tangible benefits from [the National Register] have to do with this question of image &ndash; how people began to think about the place and manage it themselves,&rdquo; Leeks said. &ldquo;Once there was this historic district designation, once it was clear, people celebrated that and rallied around that.&rdquo;</p><p>K-Town residents formed what Leeks called a Historic District Committee, which has taken a highly active role in promoting the neighborhood. In addition to developing a strategic plan for K-Town&rsquo;s revitalization, they&rsquo;ve organized neighborhood walking tours &ndash; an unusual feature for an area often cited for its blight.</p><p>They&rsquo;ve also started showing up in housing court. If a vacant building goes on a demolition list, the committee may ask the judge to stay demolition so they can preserve it and work toward finding a buyer.</p><p>Leeks said NHS hasn&rsquo;t brought on any new K-Town buyers in the two years since the neighborhood was added to the National Register (although the organization is currently under contract with two buildings on nearby Douglas Boulevard). &nbsp;</p><p>Instead, the Historic District Committee is turning to what it only half-jokingly calls the &ldquo;K-Town alumni association&rdquo; &ndash; anyone with roots in the neighborhood. &ldquo;They&rsquo;re reaching out to try and get former friends and neighbors to look back &ndash; and move back,&rdquo; Leeks said.</p><p>It&rsquo;s not always easy to get people to see their own neighborhood in a different light, especially if they&rsquo;ve been there &ndash; or been away &ndash; for decades. But Matt Cole said NHS has already helped more than 200 greystone owners buy, keep or repair their buildings since the program was launched in 2006&nbsp;&ndash; an investment of more than $6 million. And they&rsquo;re still hoping to use historic narratives to rebrand neighborhoods and encourage reinvestment. That&rsquo;s why they&#39;re taking a similar approach to another stretch of North Lawndale, the 3300 block of West Flournoy Street. &nbsp;</p><p>&ldquo;People are watching this &ndash; people in other parts of the neighborhood,&rdquo; Leeks said. &ldquo;They&rsquo;ve seen what&rsquo;s happening in K-Town and said, &lsquo;Can we do that?&rsquo;&rdquo;</p><p>You can hear Matt Cole expound more on his group&rsquo;s neighborhood branding strategy in the audio above.</p><p><em><a href="http://www.wbez.org/series/dynamic-range">Dynamic Range</a></em>&nbsp;<em>showcases hidden gems unearthed from</em>&nbsp;<em><a href="https://soundcloud.com/chicago-amplified/a-conversation-with-u-s">Chicago Amplified&rsquo;s</a></em>&nbsp;<em>vast archive of public events and appears on weekends. Matt Cole spoke at an event presented by the Chicago Architecture Foundation in January. Click</em>&nbsp;<em><a href="http://www.wbez.org/series/chicago-amplified/historic-preservation-design-and-cultural-programming-neighborhood-change">here</a>&nbsp;to hear the event in its entirety.</em></p></p> Sat, 09 Mar 2013 08:00:00 -0600 http://www.wbez.org/series/dynamic-range/saving-greystones-blood-sweat-and-branding-105992 Venture: Mortgage fraudsters hatch post-bubble schemes http://www.wbez.org/story/venture-mortgage-fraudsters-hatch-post-bubble-schemes-90567 <img typeof="foaf:Image" src="http://llnw.wbez.org//story/photo/2011-August/2011-08-13/IMAG1092.jpg" alt="" /><p><p>A lot has changed since the housing crash began. But one thing's still the same. Even though banks have tightened lending, and new regulations are in place, scammers are still finding ways to cheat the system.</p><p>Emilio Carrasquillo is giving me a grim kind of tour in the Back of the Yards neighborhood.</p><p>CARRASQUILLO: Another foreclosure across the street. So you have what, three, four, five foreclosures on this one block.</p><p>This South Side neighborhood is dear to Carrasquillo. He heads the local office here for the non-profit Neighborhood Housing Services of Chicago. He keeps an eye on real estate listings, and last year he started noticing something strange.</p><p>Buildings were selling for crazy amounts of money.</p><p>In a neighborhood where banks were unloading properties for $20,000 or $30,000, all of a sudden, buildings were going for 10 or 15 times that. Like this one: A bank sold this boarded-up, graffiti-tagged two-flat for about $35,000 in February 2009 and then:</p><p>CARRASQUILLO: It was sold in November of 09 for $315,000 and it went into foreclosure right away, seven months afterwards.</p><p>But wait: This round of sales and foreclosures happened after the housing bubble burst. Are banks really falling for this all over again? Turns out Carrasquillo is as surprised as I am.</p><p>CARRASQUILLO: How can this be happening again? Who did the appraisal on this? How is it worth $355,000, $370,000, $350,000, $345,000? Where are these prices coming from?</p><p>So his housing agency turned over the suspicious transactions to the authorities. People like this guy.</p><p>PAUL HOLDEMAN: Paul Holdeman, supervisory special agent with the FBI.</p><p>Holdeman won't comment on the cases Carrasquillo discovered, but says loan fraud like what occurred during the housing boom has definitely continued since the crash. People find straw buyers who submit fake employment information to banks to qualify for big mortgages. Appraisers jack up the values of buildings and once one sells for an inflated amount, it's easy to justify other ones in the neighborhood at similar prices. The straw buyers never make a payment and the place goes into foreclosure, keeping it unoccupied for months or maybe years.</p><p>But I asked Holdeman to tell me about new schemes his agents are seeing.</p><p>HOLDEMAN: Now with the downturn in the market, we also see foreclosure rescue schemes which people are taking advantage of individuals in dire straits. And we also see things like short sale frauds, where people are finding themselves underwater, trying to get out of that property so going back to the banks and selling the property for less than what they owe on the mortgage and engaging in fraud schemes there to again extract money from financial institutions.</p><p>GROSS: So what are they doing? How does short sale fraud work?</p><p>HOLDEMAN: With a short sale fraud - oftentimes they'll go to a real estate agent to help them sell the property. The real estate agent may get certain offers. Let's say they have 3 offers. Let's say they get one for $150,000, one for $175,000 and one for $200,000. They may go to the bank that holds the original mortgage note and tell them, hey, we have an offer for $150,000, that's the best we have. So the bank says, we'll review it, all right we'll go ahead and sell it for $150,000. Then that agent knows they have someone who wanted it for $200,000, they can turn around and work it out to sell it for that after the fact. It all involves deflated appraisals, inflated appraisals and kickbacks behind the scenes and essentially individuals who are not exercising their fiduciary duty and making false statements to the banks.</p><p>GROSS: So in that case the bank is not putting out a lot of money in a mortgage - they're accepting a lot less money than they're due?</p><p>HOLDEMAN: Exactly. That's exactly what's going on.</p><p>I asked Holdeman why he thinks banks would fall for overinflated appraisals nowadays. They've made it harder for your average Joe Schmoe to get a loan, so what's going on? He says it's often out-of-state banks that make decisions based mostly on appraisals and loan applications that may be fraudulent, but look good enough to pass muster.</p><p>I called Wells Fargo, the bank that made the $315,000 dollar mortgage on the rundown property Carrasquillo pointed out to me. I asked them, what were they thinking? Why did they make that loan? They wouldn't say.</p><p>But they said they reviewed it earlier this year and found a number of problems with the paperwork on that property. So they told the authorities.</p><p>And there are a lot of authorities working on mortgage fraud - everyone from the FBI and the Department of Justice to the Illinois attorney general and the Cook County state's attorney. Matthew Jannusch, an assistant Cook County state's attorney assigned to the mortgage fraud unit, described some other kinds of schemes they're seeing. One that seems surprising in its audacity involves people submitting fraudulent title documents for bank-owned properties to the Cook County Recorder of Deeds. Then they break the lock and rent the place out, collecting rent until the bank finally figures out what's going on and gets the paperwork fixed.</p><p>Here's an excerpt of the conversation with Matthew Jannusch on the new kinds of post-bubble schemes they're seeing:</p><p><audio class="mejs mediaelement-formatter-identified-1332483594-1" src="http://llnw.wbez.org/story/insert-image/2011-august/2011-08-13/jannusch-edit.mp3">&nbsp;</audio><br> <br> For his part, Emilio Carrasquillo of Neighborhood Housing Services says he's just tired of watching his communities manipulated like some kind of monopoly game. He says, look at that woman over there who's mowing her grass. She loses out because the buildings around hers are vacant and falling apart all because some people are using them to bilk money out of banks.</p><p>CARRASQUILLO: You look at all these regulations and restrictions they've put on everyone from banks to loan originators and yet this continues to happen. Obviously something is wrong, something is amiss.</p><p>Law enforcement may be making some headway, though. A new mortgage fraud risk report by a company called Interthinx says, in recent months, for the first time in more than a year, none of Chicago's zip codes were among the top ten most at risk for mortgage fraud in the country.</p><p>Still, Paul Holdeman of the FBI has no illusions his job is done. He says real estate is one of those areas where people will always be dreaming up new ways to exploit the system.</p><p>And now for this week's windy indicator, where we take a road less traveled to evaluate the economy.</p><p>Today: Hostels, that low-cost lodging for travelers.</p><p>Mike Haney&nbsp; runs a real estate investment company called&nbsp; Newcastle Limited. He says the lodging industry was thriving when his company bought Getaway Hostel in Lincoln Park four years ago.</p><p>HANEY: End of 2007, beginning of 2008, of course, as the financial crisis really started to unfold, we found that business dropped off here as it did for all lodging properties in Chicago and elsewhere.</p><p>But in 2010, things started to turn around. He says in the last year, more people are traveling - an early sign they're feeling more confident in the economy, even if companies aren't.</p><p>HANEY: We saw an uptick in our business before hotels saw an uptick. Individuals who make decisions to travel can make those decisions much more quickly than businesses typically do.</p><p>Haney says bookings at Getaway Hostel are up 40 percent since early 2010. The day I was there, backpackers seemed to check in constantly and groups of Spanish, German and Asian travelers sat around chatting.</p><p>Mat Meadows, the guy who manages the hostel day-to-day, says the spike in activity includes some atypical guests, like families and professionals in town for conferences. About half of them forgo the bunk beds and spring for private rooms.</p><p>Next week, the windy indicator goes to the opera.</p></p> Mon, 15 Aug 2011 05:00:00 -0500 http://www.wbez.org/story/venture-mortgage-fraudsters-hatch-post-bubble-schemes-90567