- New City rules force set to force compliance
- Banks cry foul – but do they have a choice?
Los Angeles families are tired of the way that lenders who foreclosed on neighborhood properties are caring for their new assets. Their complaints have galvanized City Officials into taking action – and in a public way that has inevitably irritated lenders too.
Last Saturday they announced their program at a news conference held at a particularly bad example, with tall weeds, graffiti, broken windows and a collapsed boundary fence to help make their point. Freddie Mac is the unintended owner of the offending property. It has been sent several citations that it claims, as an excuse, that it never got – it’s strange, is it not, that they don’t allow the same leeway to their underwater clients.
“A lot of vacant homes have become a nuisance in the neighborhood because of the foreclosure crisis.” That’s according to community activist Ms Betty Steele, who is canvassing for better use of the City’s 311 hotline. “And the banks should be held accountable for cleaning them up,” the feisty woman added.
Los Angeles officials told me more about their latest program when I popped in at their offices on Monday.
- There are some 27,000 foreclosed homes in the City, and many are in an abandoned state
- The new rules that went live on Thursday will make it simpler to identify the real estate owning banks and force them (through the threat of fines) to keep offending properties safe, clean and tidy.
- They also close a previous loophole that allowed lenders to evade responsibility prior to legal foreclosure – they are now liable from the date of issue of the default notice.
- To make it easier to follow up on this, banks now have to maintain a register of default properties down at City Hall.
- The City may now impose fines of up to $100,000 under extreme circumstances.
Officials had been trying to obtain a solution at the site of the news conference for a while, and had issued three citations in the previous three weeks. In the end, announcing the news conference did the trick and elicited a response from Freddie Mac shortly afterwards. The City officials I met with told me that they often battled to track down delinquent banks because home ownership paperwork takes some time to catch up with reality. The City Hall registry will makes things much easier to police.
Needless to say, the Californian Mortgage Bankers Association is calling foul on this one too. This is totally unnecessary, their spokesman told me, and it’s in our interest to maintain these properties.
Are you interested in following foreclosure news or buying foreclosed real estate? The website www.foreclosuredatabank.com is a source of information on both.
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Written by Alex Rolim.
