I am posting this article because it brings up an interesting question about banks. How can we hold banks and owners of property accountable for dilapidated, foreclosed homes even if it means to demolish some of them?
"Lenders could hire contractors who have no work, to refurbish some of these houses in "a partnership"...then make attractive sales prices and lending terms...bet they could get rid of some of the eyesores, create work for unemployed people, improve neighborhoods, and fulfill their civic responsibility to the community."
We're trapped in a cycle of decline unless we have new ideas and people-movers. But I'm not sure we even "want" help from banks, whose "new ideas" are "new advertisements" and the "people movers" are putting people in homes they can't afford. We need a REAL social movement from people in order to tackle economic problems. (More to come on this next week.)
I think the important quote in this article is that the banks dont care. Because they dont. The only way to compel them to maintain these properties is to pass meaningful legislation with teeth. I think the fact that the bank was asking for a reprieve of the fines was telling about their attitude toward this whole situation. Maybe a law that states that they cannot finalize the sale of any foreclosed property until all related ordinance fees are paid in full. I dont know if that would cut it, but I do know that these banks dont want to hold onto these properties any longer than they have to. I cant imagine that hiring someone to mow the lawn once a week will cost more than the fines that they accrue from doing nothing.
From what I have read Las Vegas was one of the hardest hit cities by the crisis. There is a great video on Hulu about Las Vegas after the crash (cant find the link) which is fascinating. They show whole neighborhoods which are deserted.
Someone needs to be held accountable here. In our group discussion yesterday we talked about the inefficiencies of abandoned homes. We determined that it is actually efficient for the homeowner to leave and that is why they chose to do so.
As for the bank that owes the fees. In my mind they need to pay them. This is just one of the costs they should have factored in when deciding to make the loan to the individual.
This article reminds me of the example provided in Foreclosure Nation about the young lady who moved to Las Vegas and was a millionaire on paper but was later found in bankruptcy when the bubble popped. She described that Las Vegas was the hot place in real estate to be and how she was buying and selling condo. I definitely agree with Chris that Las Vegas has been hit hard. In regards to the article, I think there is a real problem with using taxpayers to cover abatement fees. Owners need to take responsibility, and if they can’t the bank who wrote the mortgage needs to step and prevent the property from deteriorating.
I think that there must be negative incentives such as penalties and fines associated with abandoning a house as right it is sometimes the financially sound thing to do for people in dire situations.
I like Gayle's comment "Instead of longterm vacancies....Lenders should rent the properties out to save property values." Renting the property instead of selling them will not only help prevent abandonment but also the effect of abandonment on neighborhood will be lot less.
I like this comment by a Pauline at the bottom:
ReplyDelete"Lenders could hire contractors who have no work, to refurbish some of these houses in "a partnership"...then make attractive sales prices and lending terms...bet they could get rid of some of the eyesores, create work for unemployed people, improve neighborhoods, and fulfill their civic responsibility to the community."
We're trapped in a cycle of decline unless we have new ideas and people-movers. But I'm not sure we even "want" help from banks, whose "new ideas" are "new advertisements" and the "people movers" are putting people in homes they can't afford. We need a REAL social movement from people in order to tackle economic problems. (More to come on this next week.)
I think the important quote in this article is that the banks dont care. Because they dont. The only way to compel them to maintain these properties is to pass meaningful legislation with teeth. I think the fact that the bank was asking for a reprieve of the fines was telling about their attitude toward this whole situation. Maybe a law that states that they cannot finalize the sale of any foreclosed property until all related ordinance fees are paid in full. I dont know if that would cut it, but I do know that these banks dont want to hold onto these properties any longer than they have to. I cant imagine that hiring someone to mow the lawn once a week will cost more than the fines that they accrue from doing nothing.
ReplyDeleteFrom what I have read Las Vegas was one of the hardest hit cities by the crisis. There is a great video on Hulu about Las Vegas after the crash (cant find the link) which is fascinating. They show whole neighborhoods which are deserted.
ReplyDeleteSomeone needs to be held accountable here. In our group discussion yesterday we talked about the inefficiencies of abandoned homes. We determined that it is actually efficient for the homeowner to leave and that is why they chose to do so.
As for the bank that owes the fees. In my mind they need to pay them. This is just one of the costs they should have factored in when deciding to make the loan to the individual.
This article reminds me of the example provided in Foreclosure Nation about the young lady who moved to Las Vegas and was a millionaire on paper but was later found in bankruptcy when the bubble popped. She described that Las Vegas was the hot place in real estate to be and how she was buying and selling condo. I definitely agree with Chris that Las Vegas has been hit hard.
ReplyDeleteIn regards to the article, I think there is a real problem with using taxpayers to cover abatement fees. Owners need to take responsibility, and if they can’t the bank who wrote the mortgage needs to step and prevent the property from deteriorating.
I think that there must be negative incentives such as penalties and fines associated with abandoning a house as right it is sometimes the financially sound thing to do for people in dire situations.
ReplyDeleteI like Gayle's comment "Instead of longterm vacancies....Lenders should rent the properties out to save property values." Renting the property instead of selling them will not only help prevent abandonment but also the effect of abandonment on neighborhood will be lot less.
ReplyDelete