Abandoned and vacant foreclosed houses that remained unsold on the market have been major a problem facing several cities severely affected by the foreclosure crisis.
An abandoned foreclosed house is a prime target for vandals, vagrants and other criminal elements. Additionally, vacant foreclosed homes become eyesores that pushed down property values in neighborhoods and present danger to the public health.
Recognizing the negative effects and problems created by foreclosure properties, several cities across the country have initiated maintenance ordinances or programs aimed at eradicating vacant properties in neighborhoods.
Officials in Chula Vista, California launched the Abandoned Residential Property Program which imposed almost $1.4 million fines on servicing agents and lenders. The city's program mandated that lenders inspect properties they foreclosed to determine if they are occupied or not. Lenders are then required to register a vacant repossessed home and pay the fee of $70. Lenders are then mandated to inspect the foreclosed property at least once a week.
Following the lead of Chula Vista, Stockton also initiated a vacant property policy. Stockton's program is similar to Chula Vista in terms of requiring lenders to provide maintenance and security on foreclosure houses and to post contact information.
However, Stockton program differs with Chula Vista because it does not require mortgage servicers to register their foreclosed properties. The city relies on residents to report the unmaintained property in their neighborhoods.
The Ohio city of Cleveland has also the same program in place. The city has staff to survey neighborhoods to determine unmaintained foreclosed properties. Officials said that the city has become an expert in determining if a certain foreclosed home is marginally deteriorating or totally abandoned.
However, despite the city's sophistication in identifying deteriorating distressed properties, Cleveland's foreclosure problem continues to overwhelm its efforts to alleviate its devastating effects.
In Detroit, Michigan, an estimated $14 million in federal funds will be used by the city to demolish neglected and deteriorating foreclosed homes. The initiative, which is part of the neighborhood stabilization program of the federal government, involves properties purchased through the help of Michigan Land Bank or from Wayne County.
Similarly, the Indiana city of Indianapolis also received federal grants amounting to $29 million from the U.S. Housing and Urban development which will be used to purchase, demolish or rehabilitate foreclosure properties.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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