By Post Staff
The Oakland City Council this week passed a law that expands the ordinance that fines Big Banks $1,000 per day for not maintaining their blighted foreclosed properties, as well as expanded registration requirements.
Under the previous ordinance, the has collected over $1.6 million in fees and penalties as well as getting banks to actually clean up their vacant and blighted properties. But at the same time, notices of defaults issued by banks have led to properties left in limbo, abandoned and left in blighted and deteriorating conditions.
The expanded ordinance closes this loophole following the lead taken by other cities across the state. The new ordinance will now require banks to register and inspect vacant and occupied properties that are in “default” and maintain vacant “notice of default” properties.
“These are necessary amendments. We want to make sure that we keep banks accountable for the mess they made with the foreclosures,” said Councilmember Desley Brooks.
After a homeowner receives a “notice of default,” the property often ends up in a “gray area” where no one is living in it, but “banks were saying nobody owned it” and that they were not responsible for maintaining the property, said Brooks. “We want to keep our neighborhoods stabilized.”
The new ordinance will require banks to make monthly inspections of “notice of default” and foreclosed properties, including using a local certified property management firm for occupied properties. The banks will also have to keep utilities turned on for legally occupied properties.
Penalty funds will be used for foreclosure prevention.
Bank objections to the ordinance stem from the requirement that they have to determine if mortgage holders move out after receiving a notice of default from the lender, according to Paul Junge, vice president and director of public policy at the Oakland Metropolitan Chamber of Commerce.
The process from notice of default to foreclosure by the bank can take as long as a year and a half, said Junge.
“They don’t object to maintaining the property,” he said. “They just don’t want to be solely responsible for deciding whether the property is abandoned or not.”
Community groups that worked on passing the expanded city ordinance included members of the ReFund CA coalition, led by Alliance of Californians for Community Empowerment (ACCE), Oakland Community Organizations (OCO) and Service Employees International Union Local 1021.