Vacant Property Registration Ordinances
Safeguard’s Director of Community Initiatives Michael Halpern wrote an article entitled Vacant Property Registration Ordinances, featured in REOMAC’s Update Newsletter Spring Edition.
Vacant Property Registration Ordinances – state vs. city approaches
Municipal vacant property registration ordinances continue to make headlines across the country, as cities seek solutions to address the challenges of vacant and abandoned properties.
Most recently, the cities of Chicago and Las Vegas made news with aggressive ordinances designed to make lien holders more accountable for properties prior to foreclosure. They are among more than 700 different city ordinances currently being tracked around the country, each with their unique requirements, penalties and fees.
A more promising alternative to city ordinances, which should benefit cities and the mortgage servicing community alike, is the creation of statewide vacant property legislation. While statewide legislation addressing the topic of vacant property registrations exists to varying degrees in the states of Connecticut, Virginia, Texas and ones proposed in Kentucky and Georgia, a foreclosure task force under way in Maryland bears Property Registration Updates watching, as it appears to be taking a more comprehensive approach to address the housing crisis on many levels, and seems to align with the goals of the servicing industry on numerous fronts.
Maryland’s Foreclosure Task Force
Maryland’s Governor Martin O’Malley created the Maryland Foreclosure Task Force in the fall of 2011. The charge to the task force was to: “1) assess foreclosure trends and the impact of foreclosures on communities across Maryland; 2) identify further innovative and effective strategies to enhance loss mitigation outcomes for homeowners; and 3) identify innovative and effective strategies to strengthen Maryland neighborhoods impacted by foreclosure,” according to the task force’s report released January 11, 2012.
The report outlines initiatives and legislation to aid in the recovery of the housing crisis. In the report, the group recommended several legislative actions. Two areas of interest the task force recommends include: Enhancing loss mitigation and strengthening Maryland neighborhoods. Those recommendations include:
- Stabilize property values and focus resources on occupied properties.
- Ensure compliance with notices protecting tenants in foreclosure.
- Create a centralized Foreclosed Property Registry.
- Enact a Neighborhood Conservation Tax Credit for people who purchase foreclosed properties as their principal residence.
- Expand financing tools and incentives for reclamation of foreclosed properties.
- Encourage expanded partnerships between nonprofits, local governments and REO holders and other Foreclosure Purchasers.
- Encourage transition of distressed properties, including multi-family properties, to high quality affordable rental opportunities, particularly near transit and good schools.
- Encourage the timely resale of distressed and REO properties to new third party owners, with an emphasis on selling homes to new homeowners, where high homeownership rates have traditionally predominated.
Accelerated Foreclosure and Statewide Vacant Property Registries
From a property preservation standpoint, the two most important components of Maryland’s Foreclosure Task Force’s report include accelerating the foreclosure process for vacant or abandoned properties, and enacting a statewide foreclosed property registration. Both are positive steps.
Accelerating foreclosure for vacant properties would allow servicers to take possession of properties abandoned by homeowners more quickly and restore them to ownership and occupancy. At the same time, servicers still would reach out to assist defaulted borrowers and help them remain in their homes.
More importantly, accelerating foreclosure helps to achieve what municipalities and states want in enacting vacant property ordinances giving lien holders responsibility for abandoned properties. Until a defaulted property can move through foreclosure, the lien holder’s ability to take action for the property are limited. In other words, possession and responsibility must go hand-in-hand.
By facilitating the process to give both possession and responsibility to lien holders, the time that a property stands vacant will be reduced, thereby reducing the risk of damage, deterioration, the loss of property value, and the negative impact that vacant properties have on surrounding properties. Maryland’s foreclosed property registration recommendation also is consistent with the goals of the mortgage servicing community and municipalities across the country to achieve greater transparency and open the channels of communication to resolve code issues more quickly and efficiently.
A statewide foreclosed property registry would facilitate the notification process when a property incurs a code violation. Even with regular property preservation services, vacant properties will incur code violations, as they may be vandalized or damaged between routine service calls. A statewide registry would connect code enforcement officials and servicers more quickly so that those issues can be addressed in a timely manner, before more serious damage to the property can occur.
In fact, facilitating such communication and creating uniformity for communities and servicers was the goal when Safeguard created Compliance Connections, an online portal that allows municipalities and servicers to manage the entire code compliance process, completely and in real-time.
Uniformity is critical when it comes to vacant property registrations. While lien holders strive to comply with the approximately 700 individual municipal vacant property registration ordinances that currently exist across the country, the fact is, the more uniform ordinances are, the more able servicers will be to comply with them. Thus the move to statewide registries is a positive development.
To view the online article, please click here.
About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with nearly 1,000 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.
Safeguard’s Director of Community Initiatives Michael Halpern wrote an article entitled Vacant Property Registration Ordinances, featured in REOMAC’s Update Newsletter Spring Edition.
