San Diego policy group: Fine banks for unkempt foreclosures

San Diego Union-Tribune, 6/24/11 | Read the original article |

A San Diego policy group that advocates for working families proposes fining banks for nuisance properties, documenting distressed homes in a registry and other solutions to address the foreclosure crisis in San Diego.

The Center on Policy Initiatives, in a report released Thursday, shared six recommendations to stem the impact of foreclosures on neighborhoods and local governments.

More than 48,000 foreclosures have been recorded in the county since 2008, DataQuick figures show. The group’s report, written by the center’s lead researcher Corinne Wilson, projects foreclosures will increase to more than 56,000 by 2012, citing figures from RealtyTrac, another real estate tracker.

The report recommends:

  • Creating a registry of local foreclosures to help government officials direct resources to the hotspots.
  • Fining banks for improperly maintaining foreclosures they own because of the properties’ effect on the financial well-being of residents and cities.
  • Recovering local government spending on maintaining distressed homes from those banks.
  • Requiring banks to accept loan modifications that include principal reductions.
  • Strengthening federal regulation and oversight through the Consumer Finance Protection Bureau, a newly formed federal agency.
  • Create and protect quality jobs.

The policy group estimates one foreclosure can cost government officials $5,000 to $34,000 to maintain, inspect and other tasks. The total financial impact in San Diego city, from 2008 to 2012, is estimated at $134 million to $855 million, the report said.

To read the report, go here.