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Banking
lobbyists have quietly crafted a measure in the Florida Legislature that
would prevent cities and counties from forcing the banks that hold mortgages
on properties in foreclosure to maintain those properties until they have
actually acquired the title to the land.
Article
Courtesy of The Orlando Sentinel
By Jason
Garcia
Published
April 23, 2009
TALLAHASSEE
- With tens of thousands of homes across Florida left abandoned, government
officials from Miami to Orlando have responded by sending crews out to mow
lawns, clean pools and do other basic work and billing the banks to pay once
they take possession of the property.
The state's banking industry wants to put a stop to the practice.
Banking lobbyists have quietly crafted a measure in the Florida Legislature
that would prevent cities and counties from forcing the banks that hold
mortgages on properties in foreclosure to maintain those properties until
they have actually acquired the title to the land. That foreclosure process
can take six months or more.
Banking industry lobbyists hope to tack their language on to other
legislation in the waning days of this year's legislative session, which is
scheduled to end on May 1.
The
language, written by the Florida Bankers Association, would also prevent
cities from establishing registries to keep track of all the foreclosed
homes in their area.
"It's a big issue," said Anthony DiMarco, a lobbyist with the
bankers association, whose members include Bank of America, SunTrust,
Wachovia and many others.
Local ordinances aimed at making banks maintain foreclosed properties --
typically by allowing cities to impose liens or other charges on the land --
"sound great," DiMarco said, "but until we take title, we're
not supposed to do anything with the property -- we don't own the
property."
But the industry group's maneuvering has sparked an uproar among cities and
counties that say abandoned homes and businesses must be maintained to
ensure they don't drag down surrounding communities.
They accuse the banks, already decimated by losses from bad home loans, of
trying to pass off those maintenance expenses to taxpayers.
"It's a horrible idea," said Sunrise Mayor Roger Wishner, a former
state legislator. "It's another unfunded mandate and another bailout
for the banking industry."
Statewide, about 15 cities and counties have passed ordinances specifically
aimed at maintaining foreclosed or abandoned properties, including Deerfield
Beach and Parkland, said Desinda Carper, a lobbyist with the Florida League
of Cities. But many more are using existing code-enforcement regulations to
confront the issue and they, too, would be affected by the banks' proposal.
The problem of blighted homes is two-fold: An overgrown, unkempt house is an
eyesore that can lower the property values of all the homes surrounding it.
But it can also become a safety issue by attracting everything from pest
infestations to vandals.
"We've received reports where there have been squatters that have
actually moved into abandoned properties, as well as one case where there
was a dog-fighting ring who were keeping their pit bulls in an abandoned
property," Carper said.
Boynton Beach doesn't have an ordinance addressing the maintenance of
foreclosed homes, but it set aside $40,000 in its budget this year that it
uses for the upkeep of abandoned homes.
Code Compliance Administrator Scott Blasie said the city is on track with
spending most, if not all, of the money. He said cash-strapped cities may
not have enough to maintain foreclosures if banks push legislation that
frees them from paying the liens.
Palm Beach County officials try to get banks to pay for the upkeep of homes
in the midst of foreclosure and is considering passing rules requiring
lenders to maintain foreclosed properties. But banks sometimes aren't much
help, said Barbara Alterman, executive director of planning, building and
zoning.
"A lot of the banks won't even respond. They don't want that
responsibility until they own the property," Alterman said.
Mowing lawns, draining pools and boarding up broken windows on these
distressed properties is expensive, particularly during the summer, when
grass must be cut every week or two.
Carper said it can cost a city between $6,000 and $12,000 per property.
DiMarco, of the Florida Bankers Association, said his group agrees that
banks should be responsible for maintaining foreclosed properties but only
after they take them back from homeowners.
"Once we take title, we should take care of it," he said.
Florida courts are so clogged with foreclosure cases that it takes months
before one is fully processed. That leaves the property's ownership in
limbo.
"No matter what the banking industry may feel, they are still
responsible for the property. Because the bank is actually being given back
its property," said Carper, the League of Cities lobbyist.
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