Q: I have worked on helping my community in the past on the issue of blight as an involved resident. I have brought to my association’s board articles that state that liens can be placed on properties to enforce our rules. And, when we place a lien on a property, the lien can make the lender or home owner or investor take care of issues that affect blight, such as replacement of laws, painting a home, and other issues that affect a community.
I frequently make calls to code enforcement officials about problems with properties and with my association when rules are violated. The association then works to fine the owner and place a lien on that property. The lien prevents the homeowner from refinancing or selling the property until compliance has been achieved.
I even work with cities and towns to assist them in their actions against homeowners and to have liens placed on their homes as well. Some cities aren’t even aware that they have this right.
I believe that compliance before a sale will preserve property values better since that will increase the sale price and better support tax contributions. I have also found that offering a neighbor assistance to work with their property goes a long way to helping the community. But if the assistance isn’t accepted, then you have to call in to code compliance.
The trick is to work with others in the neighborhood to put pressure on those that are not caring for their properties. Once neighbors are motivated, there is momentum in the community to get things cleaned up. When you call a government code compliance officer, they don’t disclose the source of the call. That anonymity helps gets things done. I think this is one of the best ways to keep our home values up.
A: It’s always nice to hear that someone is getting involved for the greater good of the community. I commend you your attempts to try to keep your community looking good and trying to maintain everybody’s property values. You are correct that some municipalities have made greater attempts to force property owners and their lenders to keep up their properties.
Unfortunately, it’s an uphill battle. With many homeowners losing their homes to foreclosure, some lenders may pay fees to the government for their property violations, but those properties may still be sold for far less than if the properties had been maintained and lived in by the homeowners.
Some homeowners abandon their properties even before the bank takes control. In these situations, some municipalities have gone after the lenders to maintain these properties but the lenders counter that they don’t have a legal right to take control of the homes and make repairs or keep them up.
The real problem is that the housing market is still in trouble. Without a decrease in the unemployment numbers and an increase in the number of people employed in jobs that pay enough to carry a mortgage, taxes and insurance, the housing market will continue to suffer.
Each person’s efforts to work to keep the housing market up can help and a community as a whole can work together to keep up their neighborhood and actually make a difference. But you still need to have a system that helps homeowners avoid foreclosure or assist them through with the short sale of their homes if they can’t afford their homes at all.
If the employments numbers improve and the housing market becomes more stable, then the government can find a way to assist those homeowners that are underwater – where they owe more on their homes than their homes are worth – with a refinance program that allows these people to refinance their homes based on their creditworthiness and not based on the value of their home.
Being underwater is, for many homeowners, the only issue preventing them from refinancing. These homeowners can afford the payments, but don’t have the cash to pay down their debt to a level where a new mortgage is possible.
The homes referenced in your letter tend to be properties where homeowners have either walked away (in a strategic default), lost their jobs and the ability to make mortgage payments, or are somewhere in the foreclosure process.
None of these scenarios is good for the remaining homeowners. And every home that goes into default, just makes it harder for everyone else.
Finally, while pressure from communities and municipalities to have homeowners or the lenders maintain theses homes is a great goal, it seems that market forces will ultimately cause neighborhoods to improve or deteriorate as the housing market either improves or deteriorates in the coming months and years.
I’m not saying you’re wasting your time, but an improving economy should help your efforts.