Some HOA's have actually bought homes in their neighborhoods to keep them from deteriorating. The HOA spruces them up and then rents them out. The income goes back into the treasury. This is a great option for HOA's with the funds and organization to do it.
Compelling large banks to take care of the homes they own is another story. I have noticed a small attempt by some banks as well as HUD and FNMA owned properties to address this issue. Unfortunately, their processes take so long that leaks in the home are not attended to for months. Imagine mold, wood rot and rotten carpet.
The cities have the right to but not the financial resources to trim the vegetation if the homeowners fail to do so. This crisis has certainly diminished their tax revenues.
Recently there were bills introduced in California to impose mandatory $20,000 on lenders who foreclose on properties as opposed to modify loans to keep homeowners in their homes but it was understandably defeated. The bottom line is that more foreclosures will mean more depressed home prices and reduced tax revenues for local governments and less resources to deal with more abandoned properties.
It is not getting better. There is report that there's about 5 to 7 million more homes in the pipeline that will enter the foreclosure pool if the present economic conditions do not change.
Experts are saying that home prices will not bottom out until 2014. The outlook isn't good. I don't get excited about the recent improvement in employment data. Election is coming next year. So unless I see a sustained trend on the improvement, I take the data with a grain of salt.
While it is in the lender's (and ours as neighbors and taxpayers) to keep up vacant properties this has become a large issue with respect to declining prices. Poor maintenance also contradicts the notion of keeping up the value of the lenders collateral and property values in general. Hopefully those holding property for lenders will become better managers and marketers of real estate.
HOA's can get into trouble if the vacancy and rental rates get to high.
Kennytanlaw, that is unfortunate that California's legislators overreached on that law. It seems cities could fine or set up a mandatory system of payment that could mimic snow removal ordinances. Forcing modifications is something the attorneys general for the states seem intent on doing. All we want is for lenders to act like responsible neighbors.
California is a good state to watch. Some of the hard hit areas, like Stockton and Brentwood, have problems stemming from empty houses.
Nature took over in Idaho. Snakes have so infested a home, Chase has hired a service to catch and release the critters that are more nuisance than threat. Check out the story: http://finance.yahoo.com/loans/article/112850/idaho-foreclos
Realtytrac reports that 28 percent of sales in the first quarter were foreclosure sales. Estimates of how many foreclosures are still to come have been consistently reported at 2 million. And the lenders may be sitting on as many as 1 million homes. Meanwhile, legal problems mount for the banks. For instance, class action lawsuits are pending in at least three states, including Arizona. Even though banks can move forward in Florida, the system is so thoroughly log-jammed, it might be years for pending foreclosures to move through the system. And no one is successfully promoting the idea of revving the foreclosure mill there again.
That is tremendous pressure on the banks. And the cost are mounting, too. It seems the banks are trying to move a mountain. All we want is some maintenance. How about getting into the rental business as HUD is contemplating? There are plenty of property management companies in the country that can serve this need.
Thanks everyone. I hope by this time next year, some of those lawns are in bette shape.
PML of Longmont, CO
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HOAs do what they can. They issue fines to the homes with brown lawns. The problem is those fines and the dues are not paid - not by the delinquent borrower, nor the lender. The eventual buyer is presented with the unpaid dues. The fines are uncollectible if they are not pursued aggressively. A lien, however, is of no use to the HOAs, which many times does not want to become a homeowner even in a sideways moving market. If there is no equity go after, it is pointless and costly.
Cities probably face the same difficulty. However, some have easement right of ways that give them access to yards. HOAs do not have access.
It's unfair to the communities. Two or more properties on one block an hurt property values.
I feel terrible empathy whenever I tour neighborhoods and see an immaculate home surrounded by rundown properties - some of them lived in.
Officially, I can't comment on what neighbors do. I have read, however, that neighbors in hard hit areas are taking care of matters because they know it could be a long time before someone takes care of a property.
Thanks for your comment Kenny. I have friends and relatives out your way and I hear all about it. Hang in there Oakland and Scottsdale!
The eventual buyers might use the opportunity to remove dead grass and replace with larger patios, rock and some strategically placed shrubs and even a garden. It might be difficult to believe we're in a drought after one of the wettest months I can recall here, but we need to conserve water. And, here in Colorado we're still fighting a battle with mosquitos. Less water, means less breeding for those critters.
Best to all of you,