Klein Stresses Importance of Uniformity Among VPRs
The December issue of HWfocus published an article by Klein entitled Success in Uniformity: Statewide Vacant or Foreclosed Property Ordinances.
Success in Uniformity: Statewide Vacant or Foreclosed Property Ordinances
Mortgage Servicers are under greater regulatory pressure to comply with state and local laws and codes than ever before. Much of it is directly related to foreclosed or vacant property registration ordinances.
Foreclosed or vacant property ordinances benefit both municipalities and the mortgage servicing industry in that they help reduce blight and protect neighborhoods. However, a lack of uniformity makes it difficult for servicers to comply with hundreds of ordinances and their unique requirements.
Safeguard Properties tracks about 840 vacant property registries across the country. Each one has its own requirements, penalties and fees that servicers must track and comply with to avoid costly code violations and fines.
To create uniformity, statewide vacant and foreclosed property ordinances have begun to emerge across the country. The statewide approach provides a more standardized process in addressing code violations by connecting code enforcement officials and servicers more quickly and on a broader scale.
Currently, Maryland and Georgia have established statewide guidelines. Additionally, Connecticut, Illinois and New Jersey have created statewide regulations that provide guidance to municipalities and counties in the process of establishing VPRs or foreclosure ordinances.
MARYLAND HOUSE BILL 1373
Maryland’s statewide registry, effective Oct. 1, was created by the state’s foreclosure taskforce and is aligned with the goals of the mortgage servicing industry.
The taskforce recognized that local governments have difficulty identifying who is servicing the loan or who is the lien holder of a property. The taskforce created the statewide foreclosed property registry as a central resource to obtain timely contact information for lien holders or servicers.
Maryland’s taskforce has taken its response to the housing crisis a step further. Earlier this year, it released a report that outlines initiatives and legislation to aid in the recovery of the housing crisis. In the report, the group recommended several legislative actions. Two concepts in that report are aligned with the goals of the mortgage industry – enhancing loss mitigation and strengthening neighborhoods.
GEORGIA HOUSE BILL 110
Georgia’s vacant property ordinance takes a different approach but still promotes uniformity. The state passed House Bill 110, effective July 1. It regulates what local municipalities can have in their individual ordinances.
The legislation creates uniformity for all pre-existing and future vacant property or foreclosure registries passed by municipalities or counties. It puts limits on the fees and penalties that can be applied to the ordinance. Also, the bill sets the definition of a “vacant real property” and outlines specific regulations for owners of foreclosed and vacant properties.
OTHER KEY STATE LEGISLATION
Connecticut, Illinois and New Jersey have similar statewide laws regarding vacant property and foreclosure registration. While they do not mandate a statewide registration, they each require notification to the local municipality for every foreclosure filed. Forms and fees are required to be mailed to the individual jurisdictions within the individual states.
Uniformity is critical when it comes to vacant property registrations and foreclosure ordinances. While lien holders strive to comply with the approximately 840 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.
With that in mind, the next step should be creating a national policy on VPRs and foreclosure ordinances to ensure 100 % uniformity across the country.
To view the article in pdf, please click here.
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 more than 1,600 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.