Should banks be held accountable for the maintenance of foreclosed homes?
- Yes (94%, 188 Votes)
- No (6%, 12 Votes)
Total Voters: 200
Under the measure, banks will be required to register every home in the city of San Diego that is going through the foreclosure process and will be fined up to $1,000 per day if they fail to properly maintain these homes. Foreclosing banks must pay a fee to maintain their foreclosure databases.
During the foreclosure process, banks will also be required to establish a point of contact for homeowners during the filing of the notice of default (NOD).
Out of 600 San Diego residents polled, 70 percent favor or strongly favor the measure to combat blight in their neighborhoods. The poll was conducted in early April of 2012.
first tuesday take
Speculator-owned properties need to be included if these ordinances are enacted since equal treatment will be an issue. Speculators with vacant units awaiting the flip are in no different a position than an REO lender waiting for the quick flip after taking title.
With current homeownership rates in California being five percentage points lower (55%) than in the pre-recession years (60%) and dropping, fighting neighborhood blight has become a momentous concern for those neighbors who remain owner-occupants.
Regardless of ownership by lender, speculator or other absentee owner, unkempt residential vacancies blight neighborhoods and provoke crime, resulting in a decrease in home values for all neighboring homeowners. Incapable of providing relief, neighbors are left with little hope that vacant foreclosed properties will be properly maintained.
Nobody’s home: California residential vacancy rates
The ordinance coverage addressed in San Diego’s proposed measure is simultaneously being addressed by the suite of bills in the California Homeowner’s Bill of Rights. Specifically, California Senate Bill (SB) 1472 imposes a $1,000 fine per day against any blighted property owner who purchased a vacant property at a trustee’s sale and lenders who obtained blighted property through foreclosure. If passed into law, this new measure will give purchasers of blighted properties – speculators – 60 days from the date of purchase to repair the property.
The upkeep of residential vacancies is vital to the resale of surrounding homes as neighborhood values are then unaffected, and thus allow the real estate economy to flourish. Upholding the implicit responsibilities of ownership, the accountability for upkeep of properties, lies with the property owner, whether it is a bank or other owner who has visually abandoned the property.
Cities do not help by boarding up properties to merely let them to sit (with daily penalties accruing to beef up their coffers), as often is the case. Of course, the issue of prompt foreclosure to clear out the interest of the owner who has walked away from a home must be addressed. Other rules are needed to allow the lender to take possession and maintain the “abandoned” property so long as the foreclosure is processed within 90 days of delinquency.
If property owners are not willing to maintain their properties, cities can do so by employing locals and adding the cost of maintenance to the property’s tax bill, with automatic priority to the lender’s mortgage and the owner.