Kane, neighboring counties fighting loss of millions in foreclosure income

Local counties may lose millions of dollars if they are forced to change the way they handle foreclosure sales by a new law awaiting Gov. Pat Quinn's signature.

Kane, DuPage, Lake and many other counties in the state use their sheriff's departments to handle both the sale of a foreclosed home and any eviction proceedings. For the foreclosure sales, sheriff departments typically charge a fee ranging from $375 to $500. Normally, that fee doesn't result in a windfall for counties. However, the housing bust now sees a county like Kane, with about 90 foreclosure sales a week, taking in a projected $1.5 million. Lake and DuPage counties each bring in more than $1 million a year through foreclosure sales since the economic slump began. That money helps offset the loss of county income through permit, building and recording fees counties saw during years of rapid housing development.

But now those millions may go to a handful of private companies that conduct foreclosure sales instead. A proposed law, which didn't get a single "no" vote in either chamber of the Illinois General Assembly, gives plaintiffs (usually a bank) the power to select who conducts the foreclosure sale instead of a court. Kane County Sheriff Pat Perez said if private companies take over the sales the element of actually caring about the people losing their homes will vanish.

"This is probably one of the most devastating things in law enforcement that we have to deal with," Perez said. "If private companies come in, their concern is going to be how fast they can get the property back on the market, and how fast can I get it sold. They will have no concern for the people being foreclosed and their entire families."

Perez's comments were bolstered by Circuit Judge Judith M. Brawka on Monday. As a pair, they convinced the Kane County Board's Legislative Committee to author a letter urging Gov. Quinn to veto the bill.

"All the chief judges in the state are concerned about this bill," Brawka said. She said sometimes sales result in leftover money when bids go beyond the asking price of the lender. That money is supposed to go back to the foreclosed homeowner, but both Brawka and Perez said they didn't believe private foreclosure companies will spend much time making sure the money ends up in the right place. Brawka also said the pending law limits the use of private foreclosure companies conducting sales to only companies that are already conducting such sales in parts of the state. Brawka said there are only two companies in the business as far as she knows: The Judicial Sales Corp. and the Intercounty Judicial Sales Corp.

"I don't know how that part of the bill got promoted," Brawka said. "That's a major red flag."