And we’re not just talking about D-Fish signing for another three years!
The City of Los Angeles Department of Consumer Affairs has advised us that on Thursday, July 8, 2010, a new law went into effect in the City of Los Angeles that makes mortgage lenders responsible for maintaining their foreclosed properties. Here are the top seven things you should know about this “City of LA Foreclosure Registry Program:”
- Effective Thursday, July 8, 2010.
- Makes mortgage lenders responsible for cleaning up their foreclosed properties to prevent further blight and nuisance.
- Makes mortgage lenders responsible for maintaining the property as soon as they issue a Notice of Default.
- Allows the City to fine mortgage lenders $1,000 per day per violaton, up to $100,000.
- Requires mortgage lenders to register their inventory of homes in default with LA City to help building inspectors identify who owns foreclosed and abandoned homes.
- Applies to foreclosed homes in the LA City only.
- Consumers can report problem properties to LA City’s 311 hotline.
Here is a link to the the ordinance, which is in the Article 4 to Chapter XVI of the Los Angeles Municipal Code: http://clkrep.lacity.org/onlinedocs/2009/09-0365_ord_181185.pdf. For questions about the new ordinance, please contact the City of Los Angeles Department of Consumer Affairs:
Inside LA County: (800) 593-8222
Outside the County: (213) 974-1452
For the Hearing Impaired (TTY): (213) 626-0913
Website: http://www.lacountydca.info/
I wonder if registering the properties will reduce squatters? This will result banks turning over foreclosures faster.
Lots of questions from a fine piece of work…
Did mortgage rates for the City of LA increase on this news? When a Borrower goes into default and the bank takes over maintenance, is the bank now the landlord? What a mess, under the guise of trying to control blight.
With the problems from mortgage backed securities, not knowing who OWNS the note to foreclose, who is responsible for maintenance? Does this only apply to residential? If it applies to commercial real estate, so much for RE backed commercial loans. With Lenders being moved into a position of Ownership, before they actually own the property, is this the first step in eliminating the mortgage interest deduction?
It’s about time cities followed this model (I belive it started in Chula Vista?).
Perhaps it might prompt them to finally deal with their foreclosures and *get them sold* to new buyers who are more than willing to buy them at affordable prices.
The highlighted portion is a disaster. If a bank was to come and maintain a property where a notice of default has been filed but the trustee sale has not yet occurred (or the trustee sale occurred but the previous owners had not yet been evicted), they would be tresspassing. They can’t do so, even if they wanted to.
This might speed up the period of time between the default notice and the trustee sale, but it might also delay the issuing of the default notice in the first place.
I’d like to see a follow up story on unintended consequences.
I suspect in #4 if the trustee sale had occurred and the bank got the property it could come and fix up, as it is now the banks house, and the occupants are tenants only. A landlord has an inherent right to fix up the property all be it one might want to pay a off duty deputy to stand by just in case.
As the token anti-bank commenter around here, I completely agree that the banks, as the new owners of the property are responsible for the upkeep. But, I think the trigger point at the NOD is ridiculous. So, I can get an NOD on my house, and BofA has to pay to mow my lawn? I could see people gaming that. Plus, it sends the wrong signal. If you are getting to NOD but not yet at sale, then its still your house. You can still cure the default. You shouldn’t feel like you are entitled to neglect your duties to the neighborhood at the NOD stage.
If you are in default and the Bank has to come and fix something its going to cost more to cure the default. I bet the bank is going to do some homework before the file the NOD. Will they maintain the property or not?
If a bank files a NOD they are moving to foreclose, this is the trend. The upkeep of the home wouldn’t take place till tenants/owners leave, and during an applicable eviction process, the banks can show proof that they did not have ready access to the property. These types of things were probably assumed to obvious to even put in the ordinance.