Judge makes ruling on vacant buildings in Chicago

August 26, 2013

CHICAGO (AP) -- A two-year-old Chicago ordinance meant to address neighborhood blight caused by vacant buildings in foreclosure has taken a hit in a judge's ruling.

U.S. District Court Judge Thomas M. Durkin ruled the Federal Housing Financing Agency doesn't have to comply with fees and fines under the city law.

His ruling, posted Friday, concludes the fees amount to an impermissible tax by a municipality on the federal government. The finding could have implications for other cities.

The agency oversees government-controlled Fannie Mae and Freddie Mac. The mortgage guarantee giants own hundreds of thousands of loans backed by Chicago properties.

The ordinance required Fannie Mae and Freddie Mac to pay $500 per vacant building in foreclosure with mortgages backed by them. Failure to maintain buildings also led to fines.