City Makes Move to Keep Los Angeles Bank Owned Homes Up- By: John Cutts
The city council has finally passed an ordinance to ensure that Los Angeles bank owned homes are maintained and that they remain attractive to buyers and to all others in the city.
City officials explained that if the estimated 100,000 distressed homes in Los Angeles County are not maintained, they would cause a deluge of social and environmental problems in the city. As previously seen in certain neighborhoods, abandoned properties attract vandals and delinquents. They also pull down property values and worsen further the situations of underwater homes already dragged down by properties in cheap foreclosure listings.
Under the new law, banks are required to register all their properties in foreclosed homes listings with the city central registry, provide the name of a contract person and maintain the property until the ownership is transferred to a buyer. Banks will be fined $1,000 per day, up to $100,000, if they fail to maintain the foreclosed homes.
According to some city officials, the ordinance is also expected to force banks to exert effort to work out meaningful modifications to help reduce the number of Los Angeles bank owned homes, as maintenance costs for a long period will add up, increasing total foreclosure costs.
Although local officials recognize that banks are focused on profits, they hope that both financial gains and corporate citizenship would push bankers to help distressed households.
In April, the number of bank owned homes in California increased slightly by 0.24 percent from March to a total of 16,932 units, in sharp contrast to the 25-percent decrease in total foreclosure filings over the same period.
The sharp drop in foreclosure activity moved California down the chart of home foreclosure by state from second in March to fourth place in April. Finally, the statewide housing market showed some signs of recovery.
With city initiatives to maintain Los Angeles bank owned homes and with the slowdown in foreclosure activity statewide, home sellers and foreclosure investors hope they can benefit from improvements in property values.
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