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Old 05-03-2009, 11:17 AM
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Smokey Bear Smokey Bear is offline
 
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Default Stopping foreclosure blight

http://www.sfgate.com/cgi-bin/articl...BSR8.DTL&tsp=1 Interesting article -
Quote:
John Russo, Oakland city attorney, said the city is gearing up to use California's new foreclosure-blight law to force lenders to maintain their properties.
The $1,000-a-day fine "is a powerful tool for some tough and fair negotiations with banks," he said. "The most important thing is to have banks understand that it's not OK to treat foreclosed properties just like numbers on their ledgers; these are actual homes in the fabric of our neighborhoods. If banks have several properties on a block that they're holding, waiting for the market to turn, maybe they need to hire security guards. That is their responsibility; it is their property."
And I wonder if the lenders that foreclosed aren't violating some banking laws by letting their assets go to "waste", or losing value due to neglect. Are they taking monthly write downs or whatever on the loss of value due to their neglect?
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Old 05-03-2009, 11:29 AM
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Lloyd Bonafide Lloyd Bonafide is offline
 
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Indio, CA is going further than fines - the police chief there is threatening to arrest bank CEOs if REOs are not properly maintained:


http://abclocal.go.com/kabc/video?id=6792109


http://online.wsj.com/article/SB124112509277274533.html

Officials at a Citigroup Inc. office in St. Louis placed a call to this desert town recently. The bank had caught word that Indio was coming after the lending giant with fines and threats of criminal charges. The offense: an algae-infested swimming pool at 79760 Eagle Bend Court.

Citigroup wound up in charge of the foreclosed home, one of thousands of such properties it was managing across the country. But last year, Indio passed a law that allowed it to charge banks with a criminal misdemeanor if they allowed a home to fall into disrepair.

"If I need to do it, I'll say, 'Mr. Bank President, if you don't come and take care of your property, we're going to come arrest you and take you to court in California,'" says Brad Ramos, Indio's long-serving police chief.

Last edited by Lloyd Bonafide : 05-03-2009 at 11:45 AM.
  #3  
Old 05-03-2009, 11:29 AM
Randolph Kinney Randolph Kinney is offline
 
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I have read that banks are not proceeding with the foreclosure process even after issuing a notice of default because they don't want the cost of maintaining the property and recognizing the loss.

It is a way to hide the truth about the asset. Sure, the asset is wasting away but the banks have better earnings.
  #4  
Old 05-03-2009, 11:44 AM
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Smokey Bear Smokey Bear is offline
 
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I've seen that in Florida - massive numbers of homes where the lien has been filed but they don't foreclose.

The Indio solution is fantastic!

An idea - why don't these lenders rent the homes at $1 a month to employees just to have someone in the house to protect it? I know, the uncertainty of when you'd have to move out, but they could give moving bonuses when the house is sold or something.
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Old 05-03-2009, 11:53 AM
Randolph Kinney Randolph Kinney is offline
 
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Quote:
Originally Posted by Smokey Bear View Post
An idea - why don't these lenders rent the homes at $1 a month to employees just to have someone in the house to protect it? I know, the uncertainty of when you'd have to move out, but they could give moving bonuses when the house is sold or something.
I suspect the lenders do not want to set a precedence and have it get out of control.

Can you imagine a TV film crew showing up for evictions? Is this really necessary? Why not just let the defaulted homeowner live there for $1 a month? What about market rent versus imputed income for the employee?

Some investor is going to be cheesed too because you are destroying the rental market.
  #6  
Old 05-03-2009, 11:58 AM
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If the tenant is there as an employee of the company, different rules apply on evictions. In California, the eviction process doesn't apply.

Quote:
Some investor is going to be cheesed too because you are destroying the rental market.
It's already destroyed!!! If there was a rental market, the properties would be selling to investors.
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  #7  
Old 05-03-2009, 12:06 PM
Randolph Kinney Randolph Kinney is offline
 
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Quote:
Originally Posted by Smokey Bear View Post
It's already destroyed!!! If there was a rental market, the properties would be selling to investors.
From what I see where I am, investors are still buying. The problem is financing. Rents are softening. Home prices are still declining.

As for areas like Indio, demand for rentals or owner occupied homes has collapsed because there isn't an employment base to sustain that level of housing. After all, who wants to live in Indio except someone who was born there, works there or retired years ago?

The employee tenant has taxable income based upon the market rent, what they should have paid versus the $1 a month they actually paid.
  #8  
Old 05-26-2009, 09:51 PM
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I never understood why the banks didnt get into property management/landlording business in a big way 18 months ago.
  #9  
Old 05-27-2009, 06:02 AM
chad hampton chad hampton is online now
 
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Just another reason most of these bank ceo's should be arrested.

I like the plan. The homes belong to the bank, if they don't want to sell them at today's market rate, or renegotiate the terms, then they should be forced to properly maintain them just like any other owner would be.

Maybe that's what they should use all the billions they got from the taxpayer for, instead of using it to buy more bank stock - which does nothing for the average person.
  #10  
Old 05-27-2009, 08:10 AM
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These are some of the reasons that many banks aren't in any hurry to foreclose. In Cleveland, Detroit, and other areas, the banks are just walking away leaving the mess up to the city and the borrower. I don't blame them when the market value is essentially $0 on many of these homes. Realistically, the value is negative.

The banks should leave it in the borrower's name and let the cops go after the true deadbeats, the owners that walked away in the first place.
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