California Cities Impose Fines to Preserve Repo Homes

by Peter Vernon on cities

The California cities of Oakland, San Jose and Pittsburg are making sure that vacant repo homes are not spawning blight and crime in its neighborhoods. City officials and police officers have been enjoining residents to participate in initiatives to maintain abandoned foreclosed homes.

In East Oakland, Jeffrey Cash guards one of the abandoned repo homes in his community because his house is next door. He calls the police whenever he sees wayward teenagers trespassing and smoking on the vacant home’s porch or people throwing litter in the yard.

East Oakland police officer Derek Smitheram said there are thousands of vacant repo homes in his area, and each vacant house represents a problem to the community.

Smitheram said vacant repo homes quickly become hiding places for squatters, trespassers, prostitutes and drug users and dealers if they are not maintained.

That is why the cities are taking aggressive measures to cut the problem in its early stages.

They are now using anti-blight regulations to force banks that own repo homes to repair damages and maintain the structures and lawns. In September 2008, California enacted a measure that would empower cities to charge banks $1,000 per day for every foreclosed home that they do not maintain. Other cities have also enacted similar laws.

In San Jose, the city has appointed 3 enforcement officers to identify abandoned repo homes and ensure they are secured and maintained. Code enforcement manager Jamie Matthews said funding for the monitoring of repo homes is provided under the city’s redevelopment funds and Strong Neighborhoods Initiative.

Meanwhile, Pittsburg has appointed personnel from the city’s departments to monitor repo homes. City manager Marc Grisham and some staff drive around the city every day and finds vacant foreclosure properties. They investigate to find the owners and then send the police officers to warn them to get their attention. Grisham said he uses liens and fines to fund his efforts to monitor foreclosures.

In Oakland, city attorney John Russo is using California’s $1,000-per-day fine to force banks to maintain their repo homes.

Notwithstanding the problems related to bank home foreclosures, Robert Klein, head of Safeguard Properties, said that about 90 percent of repo homes are safe. He said his firm secures and cares for repo homes across the country and has inspected 1 million foreclosed homes nationwide in April, including 75,000 California foreclosures.

Klein, who also heads the Mortgage Bankers Association’s Vacant Property Registration Committee, insisted that blighted repo homes are the exception.

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