Officials in Los Angeles have unveiled new recommendations meant to toughen up and ensure the city’s foreclosure registry program is used in a more effective manner.
Audit of Foreclosure Registry
City Controller Ron Galperin has released an audit of the program that includes recommendations to boost transparency and better fund inspections of blighted foreclosures. Galperin claims the 4-year-old registry is well intentioned but “flawed” and “ineffective.” Galperin was joined by Council Member Gil Cedilloat, who says he has plans to file legislation that would enact the audit’s recommendations and create a new inspection fee. “This ordinance is a tool that has been underutilized,” Cedillo said. “This will allow for a proactive approach.”
Creation of the Foreclosure Registry
At the mortgage crisis peaked, the registry was created as an aid for city officials to keep track of foreclosed properties, enabling them to hold their bank owners more accountable for proper upkeep. Over the last four years about 32,000 houses have been registered. Just last year the registry added 9,200 of those.
But the city has never issued the up-to-$1,000-a-day penalty for banks that don’t maintain their properties. This is a penalty set forth by the law. Meanwhile, there are no proactive inspections being done because there’s not enough money to hire inspectors, according to officials from the city’s Division of Building and Safety.
New Foreclosure Registry Recommendations
The recommendations set forth by Galperin’s audit and Cedillo’s proposed legislation, would aim to change these existing issues through a streamlined process that would set higher fees on fewer properties. A “self-populating” database would be created, utilizing third-party data to track homes that are in default but not yet foreclosed. Using a third party would eliminate the reliance on banks to self-report. The proposed legislation would also set higher registration and inspection fees on homes that the banks repossess, in addition to setting aside money for inspection and code enforcement on houses in the worst shape. Galperin says the idea is not necessarily to raise money via fines, but to nudge banks to take care of their properties instead of letting them crumble.
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Source: The Los Angeles Times, Los Angeles officials propose tougher foreclosure registry, June 3, 2014