Foreclosure and legal limbo
One of the most difficult situations I deal with as a prosecutor is trying to find someone to take responsibility for a property where it is in foreclosure, the owners have abandoned the building and the lender fails or refuses to complete the foreclosure process. Some nonprofit organizations are stepping in under those circumstances and using state laws on abandoned properties to take them over, fix them up and then sell them. One such organization is featured in an article in the Huffington Post. Unfortunately, in some states, the waiting period for action is lengthy. While the clock is running, the property continues to deteriorate. It is shocking to me that legislatures fail to address the problems these derelict properties create for communities and local government. Far too often state law protects lenders from having to take possession of these properties and maintain them prior to the foreclosure judgment even though the owners are no longer around and the mortgage document gives the lender the right to ask for possession. These nonprofits that take on this difficult task should be applauded for their efforts but there aren’t enough of them to make a dent in this horrendous problem.
Assessing a civil penalty works well for our community. Lenders do not like paying the special tax assessment or lien when the house sells. Fort Wayne is getting increased compliance as attorneys and bank reps have been present at hearings.
The lenders should be compelled to take responsibility for the property; if they are not prepared to do this then the borrower should be left in the property.
At least the borrower will keep the property maintained as he has a day to day interest in doing so.
Hi Linda, I stumbled across your page today while looking for some material on the issues faced by code enforcement officials. Nice work!
In New Mexico, our company works with vacant houses to keep them marketable, safe and in good condition. We have been asked to vacate many properties by the Sheriff after a court house sale only to leave the property abondanded, unkept and another disaster waiting to happen.
The code officials in Rio Rancho are very interested in getting legislation in place that would help with “registering” these properties. We have tremendous resources to bring to bear on the problem but like many cities, we can’t figure out who to promote our no cost service! This institutional policy of leaving their mess at the door of city hall and for all the neighbors to suffer through has got to change and we want to be a part of that movement. We have shared with our sister city, Rio Rancho the legislation from Los Angles that requires legislation and provides a lot of incentive for the owner to breath life into the vacant house. It sounds great but I don’t know if they have had good success. What does your grape vine tell you?
Here in Albuquerque, I had one “strike force official’ tell me after he spent more of our tax money boarding up 19 houses in one day that his office doesn’t get involved (or I believe even cares) until it becomes a criminal problem. It was in the news: http://www.krqe.com/dpp/news/city:-vandals-trash-foreclosed-houses. I keep trying to follow the money on this whole foreclosure / letting the houses sit and ruin our neighborhoods, but this one has me confused.
I agree that we’re not being very smart about how we are going about this. Code inspectors that I work with don’t want vacant houses in their communities and would be happy to see a company that would keep these houses in good shape. They wouldn’t care who was doing it; they would just be so relieved it was done. I teach a course on the relationship between vacant/distressed properties and crime rates. I would think that some of the lenders would prefer having housing stock in good shape rather than see it deteriorate. We need a holistic approach to this problem, not each of us taking care of our area of concern and missing the big picture.