Should Banks Be Responsible When Homeowners Flee?

[moh malekpour]

Can banks be held responsible for houses abandoned by owners in the wake of the mortgage meltdown?

The number of properties left vacant is rising fast, as borrowers who stop making their mortgage payments and get hit with foreclosure suits decide to flee. The problem of abandoned homes is especially pronounced in Rust Belt cities, where the value of the properties sometimes is so low that lenders aren’t interested in claiming them.

 

[DesertDiva]

It's becoming a big deal in my market as well with so many pools not being maintained & the resulting health/safety hazards.

 

[Randolph Kinney]

I wonder if the cost of litigation would be worth it to pursue individuals that just stopped paying their mortgage and moved away?

If this is done on a massive scale, lenders are going to have to make a choice of letting the property go for taxes or hire and staff a legal department that will rival the largest AMC. Maybe that will be the way, set up LMC (litigation management company) and contract out to "independent" fee lawyers.

And then on the other side, all those homeowners need a BMC (bankruptcy management company) to oppose the LMC.

 

[moh malekpour]

It seems that neither lenders nor homeowners want those properties anymore. They are abandoning those properties. I wonder where are those speculators and investors to take possession on those properties for free?

 

[DesertDiva]

It's a simple fix. Once the it becomes REO the lender can contract with propoerty preservation co's to handle basic maintenance. More & more of these 3d party co's are springing up to take some of the property mgt functions off of the listing brokers.

Maintaining property is part of the price of owning it.

 

[Greg Bell]

Responsible for what?.The lender is the injured party with every right to sue for deficiency in purchase money mortgage states.(Not so in trust deed states , it's tough toenails).Lenders are responsible for the property after transfer.This includes maintenance and taxes.

 

[Terrel L. Shields]

The cities themselves have a lot of responsibility for this mess. They eyed developers as cash cows to expand their tax base and the politico's power base. They eagarly invested huge sums of public money to get services to these suburban homes and annexed huge chunks of land. The maps of Rogers, Bentonville, Springdale, and Fayetteville, Arkansas look like giant octupus's whose legs snake along every highway surrounding them sometimes encircling other towns like Lowell, Centerton, Cave Springs, Elm Springs, etc. It's stupid. The Mayor and his buddies on the Planning Commission ought to be given a bushhog and chainsaw and made to mow and clean up every one of these "dead" subdivisons. Without their approval and without making the builders fork up a Bond that INSURES the subdivision be completed in a timely manner, these properties would never have been begun.

 

[murray stroupe]

Re; Keep it simple or Bushhawg[bushog] it

It's a simple fix. Once the it becomes REO the lender can contract with propoerty preservation co's to handle basic maintenance. More & more of these 3d party co's are springing up to take some of the property mgt functions off of the listing brokers.

Maintaining property is part of the price of owning it.

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Excellant poins,DesertD.

Even in a tough market like Detroil;
auction co did sell a bunch, bargain hunter /bottom fisher prices. Cool

Not to worry ,when some big banks lose enough money they can change.