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Chicago

Cook County loses appeal for compensation from 2000s foreclosure crisis

U.S. appellate court ruled that banks, borrowers were main victims of predatory lending

Cook County Loses Appeal in Foreclosure Crisis Case
Cook County Board president Toni Preckwinkle (Illustration by Priya Modi for The Real Deal with Getty)

Cook County has lost its appeal to receive financial compensation, stemming from a series of litigations related to Chicago’s foreclosure crisis in the early 2000s

Three judges for the U.S. Court of Appeals ruled that the county wasn’t a victim of predatory lending that left tens of thousands of homes in the Chicago area vacant and in disrepair, Crain’s reported. 

Roughly nine years ago, Cook County filed federal Fair Housing Act lawsuits against big mortgage lenders, seeking “monetary damages for the harm” after cleaning up the disaster, which caused home vacancies to skyrocket 22 percent from 2010 to 2013.

In 2014, Cook County Board President Toni Preckwinkle released a statement, saying the crisis wreaked the most havoc on African-American and Latino communities and that “lending institutions engaged in such practices must be held accountable.”

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The appellate court’s recent ruling was in response to the county’s appeal of a decision by the U.S. District Court for the Northern District of Illinois. The judges ultimately found that Cook County was a tertiary victim at best, while the borrowers and the banks were the main victims.

In 2019, the county argued that its increased property taxes were tied to the massive uptick of foreclosed and abandoned houses. Cook County claimed that the hiked rates would burden taxpayers and potentially drive out businesses to competing counties nearby.

The crisis led to the formation of the Cook County Land Bank in 2013, with the goal of taking over these abandoned properties and returning them into productive use. The land bank is still working to revitalize these vacant homes, particularly in South Side neighborhoods like Englewood.

—Quinn Donoghue

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