Keeping up appearances (real estate, foreclosed, insurance)

[Idunn]

"... 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."
- by Michael Orey, 'Business Week'

For those so interested, this may make interesting reading. It deals primarily with approaches a municipality might take towards foreclosed properties. But applicable also to anyone concerned with vacant houses in their neighborhood.

Dirty deeds: Cities fight banks over vacant homes - BusinessWeek.com - MSNBC.com

[livecontent]

Originally Posted by Idunn

For those so interested, this may make interesting reading. It deals primarily with approaches a municipality might take towards foreclosed properties. But applicable also to anyone concerned with vacant houses in their neighborhood.

Dirty deeds: Cities fight banks over vacant homes - BusinessWeek.com - MSNBC.com

Interesting Read. I grew up on the Eastern Edge of Buffalo, in Cheektowaga, just a few miles from the worse decay. It was very bad in the 1950s and is no better today. The approach mentioned in this article is just so much fluff but very little will come to solve the problem. What actually happens more often is that the lenders are no longer; the home becomes so decayed and then the city demolishes the home and there is an empty lot. Take a look at the east side of Buffalo in Google map and you will see all the empty lots that are owned by the city.

Today the lenders get so much of their lost monies restored by government backed loan insurance that they have no incentive to maintain the property.

The only way to deal with this problem is to tightly restrict insuring home loans and make it contingent on the maintenance of the property which should be the true collateral of the loan.

All defaults of loans insurance monies should first go to the payment of taxes in arrears. It should also go first to the full maintenance of the property. This insurance for default of loans should go into an escrow account to pay for the taxes and continue maintenance until the home is sold.

If they only item they had after a default was the property--then they would pay more attention to the condition of the property. You would then see them have periodic visits to homes during the loan period to assure maintenance of their interest in the property.

Yes it would make loans harder to get--so what??? that is the issue--they are too easy. You want a home, save your money, be frugal, and work for it and have a sufficient down payment to be approved.

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