However, many lending institutions and associations have filed protests against the law. Organizations such as the New York City-based Securities Industry and Financial Markets Association wrote letters to the mayor arguing that the new law goes against property law, which holds that an entity that does not hold title to a property has no legal rights to access the site.

Marin Gibson, managing director and counsel with the SIFMA, told Emanuel in a letter that the law will push back already backed-up Chicago foreclosures, which currently average about 17 months to complete. “The effect of this will be to discourage lending to Chicago borrowers,” Gibson stated in the letter.

A number of attorneys and groups such as the New York City-based American Securitization Forum have said they believe a legal challenge will be filed soon against this new Chicago law.

Daniel Slattery, a Chicago-based partner at Pittsburg-based Reed Smith, tells GlobeSt.com that just calling a lender an owner doesn’t make it so. “A lender has a lien on a building, there’s a whole judicial process for a building to transfer from the owner,” he says. “You can’t just enter a property that you don’t own even if the city says it’s okay, that can even create a criminal conflict.”

Foreclosure of any property is only an option, not a legal requirement by lenders, Slattery says. A lender could decide to hold its lien and never act, and still not legally own the property.

Slattery agrees with the associations that it’s likely the amendment could see a court-ordered hold sometime this week. “This is a blunt instrument being applied to a nuanced problem,” he says. “This could chill both residential and commercial lending, and make lenders wary to include Chicago properties in their portfolios.”