Coupon Enforcement Departments for Counties and Municipalities across the United States have been grappling with the increased workload issues created by a rising number of vacant and abandoned properties due to the continuous pursuit of foreclosures by mortgagees (banks, lenders, and lien-holders). ForeclosureListings. com, confirmed that the "national foreclosure rate in January 2010 was one foreclosure filing for every 466 U. S. households; the most severe problems continue in the West and in Florida. Unemployment, economic hardship, poor equity, and credit availability are driving the foreclosures. " If a property owner was in default with their mortgage payments and will not satisfy the outstanding debt or bring the mortgage and any outstanding penalties current during the pre-foreclosure period, they were surely going to be faced with having to leave their home. In some cases, property owners that were upside down in their mortgage or as a result of financial hardship found themselves in a position where expenses were just too overwhelming may have chosen to just vanish from their homes, no matter how difficult it was for them and their families. In a time when most jurisdictions, especially, small to medium sized local governments are also dealing with the difficulties created by financial dilemmas and hardships that are reducing the workforce and options, the rising foreclosures have taken its toll on code enforcement departments that are tasked with trying to keep local communities and communities from becoming blighted, unsafe, and depreciated in value.
The problems that were created by sitting vacant commercial properties, such as vandalism, unsafe open structures, stagnant swimming pools, just to name a few, created immense expense as towns where tasked with securing and abating these problems without the assistance from any property owners or residents. Often , the home owners who were responsible for maintaining their homes during this difficult time felt it unfair that they were still had to provide for regular upkeep of their properties or face code enforcement penalties while the abandoned foreclosed homes next door have been neglected and left to bring down the value of their homes and detract from their neighborhoods. According to the latest report with RealtyTrac, a company that monitors the trends of foreclosures across each state, "Florida posted the nation's second optimum state foreclosure rate in November 2009 with one in every 165 housing units receiving a foreclosure filing in the month. Florida took the No . 2 spot from California, which posted the nation's third highest foreclosure charge. " It became common for community members and leaders around the State of Florida to feel that all the mortgagees were slow to take responsibility for these assets and started to put pressure on county and nearby governments to address these properties, without using their tax dollars to do so. Foreclosure Procedure in the State of Florida Usually there are some different types of foreclosure procedures in the United States. According to Erate. com, "One common type of foreclosure is the 'deed in lieu of foreclosure' deal. Often called 'strict foreclosure, ' the bank claims the title and possession of the property back to satisfy the debt. Additional most common type is the proceeding known simply as 'foreclosure' or 'judicial foreclosure. ' Here the property is confronted with auction by a county or court official. The winning bidder receives a deed to the property. Banks and also other lenders usually bid on the property in the amount of the owed debt, and if no other buyers step out they will receive the title to the property. Other states employ yet another type of foreclosure, called ' nonjudicial ' and 'statutory' foreclosure. In this case, when a borrower fails to make payments, the lender may be issued a notice of default in addition to intent to sell. If the borrower does not solve the default with payments or other means, the property will be available at public auction. " In the State of Florida, foreclosures are handled as judicial procedures that are highly refined through the court system. This process can take a bit of time, 5 months or more, beginning with the lender advising a mortgagor quite possibly in default and subsequently recording a notice of Lis Pendens. The homeowner will be served notice associated with complaint, which basically provides notice of intent to foreclose and contains the total debt. The property owner gets to receive an opportunity to appear in court to answer the complaint, however , if the court rules against the property owner, a judgment from foreclosure will be issued. After the judgment has been entered, a writ will be issued by the court authorizing a sheriff's sale. Usually, if the property owners remain inside the home, they would be considered as trespassing. If the property is sold by judicial sale, Certificate of Title will be issued to the new property owner or returned to mortgagee. Challenges for coupon compliance Code enforcement officers typically have to address code violations on occupied properties where the residents are either unacquainted with the code requirements, neglectful, financially distressed, or possibly violating code requirements intentionally, however , in the case of abandoned or nonincome producing homes, these residents have either walked away or have been required to vacate the properties leaving the property protection and violations for another responsible party who have control over the properties which in most cases are the holders of the house loan notes. This becomes a difficult task as property owners were often required to vacate the premises before the property had been either sold or taken back by the mortgagee through completion of the foreclosure process leaving the ownership notes unchanged. Code enforcement officers were now faced with dealing with code violations on vacant properties where tracking down the actual responsible parties for these properties was extremely difficult. Even when a mortgagee's name was located from looking into foreclosure filing papers, there would only be large corporate bank or financial institution name and an home address that would not lead you directly to someone who was responsible for the property and would get lost in the maze. Using strapped resources and increasing demands from community members, local governments started to adopt various vacant property sign up programs that required mortgagees to become more involved with these foreclosure properties either from the time the property owners ended up being going into default or when a property became vacant and abandoned. Although some registration programs may only consists of giving you information such as responsible party name and contact information, some programs have required significant steps be taken to get a vacant, abandoned property including providing electronic security systems. Sample Registration Program, Broward County Florida Local government authorities have had to take steps to bolster local communities against the negative effects of vacant and abandoned properties and obtain non-reflex compliance with property maintenance and building code violations. For example , in Broward County Florida, Building Code Inspectors and Code Compliance Officers respond to numerous complaints and concerns regarding single-family homes, condominiums, townhouses and duplexes that are being vandalized, in severe states of blight, lack of maintenance, security, hazardous conditions, and other health and safety conditions these properties present. Requiring mortgagees and absentee owners of vacant and abandoned properties to correct such infractions presents significant challenges to the Code Enforcement process. Additionally , when these properties are abandoned and vacant meant for extended periods of time, there may be unexpected problems for purchasers of these properties such as property maintenance issues, outstanding building enables, and code enforcement liens and/or assessments. In response to recent events in the housing market which have led to a serious rise in the number of foreclosed homes located within the unincorporated areas of Broward County, the Abandoned/Vacant Real Property Sign up and Certification ordinance was created to protect unincorporated residential neighborhoods from becoming blighted through the lack of adequate maintenance along with security of abandoned and vacant properties. The program is intended to address those properties that are vacant and abandoned which happen to have come under the control of a mortgagee or beneficiary as a result of the default of the borrower and/or the foreclosure approach. The program also applies to properties that were obtained under a deed in lieu of foreclosure. The program requires mortgage lenders to examine defaulted properties to confirm that they are occupied. If a property is found to be vacant, the program requires that the lender exercise any abandonment clause within their mortgage contract, register the property with the County and immediately begin to secure and maintain the property to help program standards. The ordinance also requires that a local property management company be contracted to perform bi-weekly examinations to verify compliance with the requirements of the ordinance, if the owner of the property is a corporation, partnership, and/or using area mortgagee/owner. The property must also be posted with the name and 24-hour contact number for the property manager that can respond to problems or concerns. The inspections and certification portion of this program offers added protection for buyers about foreclosed residential properties in the unincorporated areas of Broward County by requiring all title holders of these properties that happens to be acquired through a Certificate of Title (Foreclosures and Judgments), in accordance with Chapter 45, Florida Statutes or under some sort of deed in lieu of foreclosure/sale to obtain a Certificate of Foreclosure Inspection prior to offering the property for sale, transfer, or other alienation. This requirement allows for the performance of a cursory visual inspection of the property and an inspection report by the code enforcement officer to provide a disclosure of any noncompliance with property maintenance codes, outstanding County liens and/or special assessments encumbering the property and to also identify any outstanding building permits. Steps taken to address issues with foreclosures As the federal, state, and local governments look for ways to assist distressed homeowner's in keeping their homes in order to assist purchaser's and investors to acquire foreclosed homes to get them repaired, maintained and occupied, the banks also have focused on addressing the concerns of local governments in regards to the problems associated with vacant and abandoned properties. Mortgagees may well utilize their own staff or obtain the services of companies such as asset managers or mortgage servicers to handle several functions and responsibilities related to foreclosed properties from pre-foreclosure thru property preservation ultimately to sale or send to a new owner. The companies employ a variety of staff to handle such broad areas such as property management, real estate and even title services and have started to place a greater emphasis on property preservation and code compliance. These companies employed by the bankers that utilize their services have recently focused their attention on the ordinance requirements for properties under their own management, at the same time, promoting a partnership with local jurisdiction code enforcement staff to help alleviate the problems with vacant and abandoned properties and create a better method of communication when problems are not being addressed with property upkeep issues. According to information provided on the website for The Mortgage Bankers Association, this organization promotes the utilization of the MERS ® Mortgage Electronic Registration System database to obtain a list of property preservation contacts to assist local jurisdictions in their efforts, certainly in the case of securing open and unguarded, vacant properties. Conclusion Properties that continue to be abandoned, neglected, and unsecured to get extended period of times, which may include years, work against the mortgagees, as these conditions continue to force property principles continue to decline, costs for repairs to increase due to vandalism and deterioration and liability for the mortgagees remain since squatters and children get access inside unsecured residences. In order for code enforcement to be truly proactive, it ought to take steps to prevent problems not address them after the fact. Even though most jurisdictions charge a fee for process these properties, the fees are usually intended to offset the operating costs for the program which includes all administrative job involved, as well as the increased field investigations work that these vacant and abandoned properties require. The proactive nature these programs to seek out the responsible property preservation and servicers work to reduce the costs for the mortgagees as well as the local legal system. Fines and liens that are placed on these properties due to daily running penalties and costs for abatement operate such as performing board-ups, stagnant pool abatement, lot mowing, and junk, trash removal may reach in the scores and even thousands. Because many of these properties remain in the name of the previous owner until the property is transferred along with the new owner is properly recorded in the county records, most jurisdictions are only required to cite the owner shown on the tax assessor's records or deeds in order to address violations. The property registration programs have accomplished numerous goals such as increased responsibility and accountability by the mortgagees in regards to these assets, adherence to local property maintenance and protection building codes, and increased attention towards making these properties viable again for ownership and heightened measures toward re-occupancy. The more properties remain occupied and less are bank owned or abandoned, the less for any need for these types of vacant property ordinances and registration programs.
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