VACANT PROPERTY REGISTRATIONS PROGRAMS Do YOU need one? Presented by – Doug Leeper, Code Enforcement Solutions [email protected] (619) 791-9292
Feb 25, 2016
VACANT PROPERTY REGISTRATIONS PROGRAMSDo YOU need one?
Presented by – Doug Leeper, Code Enforcement Solutions
[email protected] (619) 791-9292
Experience 25+ years in local government Fire Fighter Police Officer Code Enforcement Officer/Manager Supervised enforcement of over 30,000 cases Testified before Congressional Sub-committee
on Domestic Policy Finalist Harvard Innovations in American
Government Award 5+ years as CE consultant Speaker/Panelist at conferences of MBA,
CMBA,USFN, REOMAC, CFSPA, NPPC, NVPC, CEOA, CACEO and Edu-Code (AACE)
Today's Agenda
Short History of Lending in America Cause of the Current Crisis History of VPR’s in America Evaluating the Problem Responding to the Problem Enforcement of the Remedy Questions Campfire Songs and Scary Stories
Short History of Lending in AmericaCause of the Current Crisis
What Causes a Foreclosure?
As long as there have been mortgages there have been foreclosures
Historically there were three main causes1. Loss of Employment2. Illness3. Divorce
All of which resulted in an inability to make payments
Primary cause today?1. Inability to make payments
Short History of Mortgage Lending in America Housing (single family) was not considered a
“financial investment” until the late 1970’s Previous to that time SFR’s deteriorated faster
then they appreciated They were a good “personal investment” 1970 = 20% down – 3 to 5 years on current
job – payment could not exceed 25% of net monthly income
FHA / VA loans were only “creative options” 2000 = 0% down (or less i.e.: 120% loan to
value) “stated income” – payment could be as high as 60% of net monthly “stated income”
CURRENT CAUSESUPPLY AND DEMAND
Lending practices created an artificial demand (Pulsen Penn Lending)
Creative/Exotic Financing “qualified” unqualified buyers
Uninformed “qualified” buyers entered into high risk / low initial payment loans
(ARM – Neg-Am – Interest only – Balloon) Developers proposed projects to fill
demand Cities approved new developments to fill
demand Builders rushed to build to fill demand Mortgage brokers and real estate
agents . . .
History of VPR’s in America
Evaluating the Problem
History of VPR’s in America
Not new Primarily in the Northeast “Rustbelt” Required reuse plan Progressive fines for continued
vacancy/abandonment 2007 City of Chula Vista CA 200+ cities in 2008 800+ cities currently
3rd Mo Cav Dis
RESULTS OF FORECLOSURES
Abandoned residential properties Visual blight Attractive nuisances Neighborhood destabilization Reduction in home values Less property tax $ collected Decreased “marketability” Increased calls for service More abandoned residential properties .
. .
What are some of the signs of a distressed/abandoned property?
Overgrown or dead vegetation Unmaintained pools, spas and ponds Buildup of flyers, notices, newspapers and
mail Trash, debris, junk and discarded personal
items Accessible rear yards Unsecured structures These could all be present at an occupied
propertyNO ONE TO REPORT CRIMES, MAKE CORRECTIONS OR HOLD
ACCOUNTABLE
EVALUATION Do you need a new ordinance?
If you have existing ordinances that cover these, then you don’t necessarily need another one to cover them again.
But there are issues that may not be covered in your code that may require you draft a new ordinance.
•Overgrown or dead vegetation•Unmaintained pools, spas and ponds•Buildup of flyers, notices, newspapers and mail•Trash, debris, junk and discarded personal items•Accessible rear yards•Unsecured structures
EVALUATION Do you need a new ordinance?
Are you a judicial or non-judicial foreclosure state?
What is the average time for completion of a foreclosure?
Does your code identify the lender as a responsible party in PRE-FORECLOSURE ABANDONMENT?
What recourse does your jurisdiction have for remediation of vacant/abandoned properties?
5 Reasons Lenders Won’t Take Action in Pre-sale
1. Hope the mortgagor remedies the default
2. Hope the property will sell prior to Trustee’s Sale
3. Hope some other entity will buy at Trustees’ Sale
4. Hope they can sell/transfer the loan to another beneficiary
5. They “. . . can’t take any action while it is in pre-sale . . .”
“MORTGAGEE IN POSSESSION”
Any action taken on a pre-sale property, including local registration, will trigger mortgagee in possession
“Filing a local registration, securing and maintaining the asset in accordance with your contract DOES NOT trigger mortgagee in possession.” Ronald Chemek, esq., Reimer, Lorber & Arowitz
“Our mortgage documents give us the right to remedy these issues to preserve our collateral.” Jill Rein, esq., Pierce & Associates
The Lending Industry’sDirty Little Secret
MortgageABANDONMENT AND WASTE
CLAUSE
ABANDONMENT AND WASTE CLAUSE
Abandonment and Waste Clausecans and cant’s
CAN Register and
Post Secure against
Vandalism Theft Trespass
Maintain against Devaluation Deterioration Trespass
CAN’T Discard personal
property Deny access Rent Sell or offer for
sale
Responding to the Problem
Enforcement of the Remedy
COMPLIANCE IS THE GOAL
In C om p lian ce
Th ose W h o W ill
W E O F F E R H E L P
Th ose W h o C an 't
D on 't K n ow
E n cou rag e
E d u ca te
D on 't C a re
N ot In C om p lian ce
Tw o Typ es o f P rop erties
COMPLIANCE IS THE GOAL
In C om p lian ce
Th ose W h o W ill
W E O F F E R H E L P
Th ose W h o C an 't
D on 't K n ow
Enforcem ent
E n cou rag e
E d u c ate
D on 't C are
N ot In C om p lian ce
Tw o Typ es o f P rop erties
COMPLIANCE IS THE GOAL
There are only two types of compliance.1. Voluntary2. Enforced
ENFORCEMENT OPTIONS
Administrative Citations Inspect Via Warrants Cease & Desist Orders Post Dangerous Building Post Do Not Occupy Vacate/Relocate Board and Secure Notice to State Tax Board Recordations Lien Foreclosure Land Bank
Utility Disconnects Civil Penalties/Daily Fines Abate Summarily Abate Via Court Order Public Nuisance Abatements Demolitions Receiverships Unfair Business Practices Suits Injunctions Criminal Prosecution Daily Fines
COMPLIANCE IS THE GOAL
A FULL COST RECOVERY COMPONENT SHOULD APPLY TO ALL CASES/OPTIONS
Say what you Mean. Mean what you say. Use THEIR language and
terminology Detailed definitions Be specific
Do You Need a “New” Ordinance?
CAUTIONS
ALWAYS perform due diligence ALWAYS provide due process Only as good as willingness and ability to
enforce. Don’t have the method AND the means?
Don’t bother. Lenders will take the path of least
resistance. Tran$lation? Lea$t expen$e.
“WHAT WORKS, WORKS.WHAT DOESN’T WORK, DOESN’T WORK.
WORKING HARD AT SOMETHING THAT DOESN’T WORK . . . WON’T MAKE IT WORK.”
John W. Alston
QUESTIONS?