Business Week: “Dirty Deeds” vs. housing court heroes
In Buffalo, prosecutor Cooper is bringing lenders before Judge Nowak to hold them accountable. Wielding the threat of liens, which can hold up the lenders’ other real estate transactions, she aims to make banks keep foreclosed homes in good condition until a buyer can be found. As an alternative, Cooper or Nowak may try to get lenders to donate properties to community groups or to pay for demolition when houses are beyond repair. “At least in Buffalo,” says Cooper, “the days are gone when you can do a foreclosure and walk away without taking care of the property.”
Those charged with violations by Cooper include participants all along the complex mortgage-industry food chain, from loan originators to servicers to the Wall Street trusts that buy up the vast majority of home loans and then securitize them. A similar initiative is under way in Cleveland, where Judge Raymond L. Pianka puts lenders on trial in absentia when they fail to respond to charges.
Even places with high property values, like Chula Vista, Calif., a San Diego suburb, are taking steps to avoid the neglect that can occur during lengthy foreclosures. “It seems like a number of the lenders aren’t even doing things that are in their own best interest to preserve the asset,” says Pianka—a problem he attributes to the fragmented nature of the business. “It’s not an address. It’s not a property. It’s just a loan number,” he says. “So they’ll push a button in San Francisco, and it will set things in motion to do things with [a] property that don’t even make sense.”
January 5th, 2008 at 8:55 am
Lovely. If they want to have all the rights of ownership, then they have the concomitant duties.
I’m glad to see Ray getting some press, too.
January 28th, 2008 at 5:07 am
[...] Posted on January 15, 2008. An interesting article popped up in the Realtor Magazine Daily Update about how Buffalo NY is taking an aggressive approach to holding the lenders accountable for the condition of the homes in their control as reported by Michael Orey of BusinessWeek.Spreading the Pain Michael Orey wrote in this very telling article Dirty Deeds. Those that profited from the sale of these houses at one point are now stuck with the collateral and they don’t like it. Read Also: Dirty Deeds and Toxic Title Dirty Deeds by Cleveland Crains In Buffalo there is an estimated 5,000-10,000 abandoned homes. These abandoned homes are a problem, especially when they are not being taken care of. New York State amended the definition of “Owner” in its property maintenance code to include not just the title holders, but others who had “control” over a property in 2004. Read also: US Epidemic Foreclosures may turn small US Cities into Ghost Towns Dirty Deeds vs. Housing Courts Don’t think the borrower gets away scott free in Western New York. Many times Cooper sentences the borrowers to community service. This is definitely a hot topic here in Western New York. [...]