With foreclosures climbing in the city, the Baltimore City Council wants to hold lenders responsible for maintaining the growing number of vacant and deteriorating properties.
“When the bank forecloses, it doesn?t usually transfer the title until after the property is sold again, so most of time we don?t know who the owner is,” said Councilman Robert Curran, D-District 3, sponsor of a bill that will be introduced at tonight?s City Council meeting.
The measure would require all lenders to notify the Department of Public Works within 30 days after a property has been foreclosed on. The lender?s contact information then would be added to a database maintained by the city within 45 days listing the lender as the owner of the property, even if the title is not transferred.
Curran said most banks do not transfer titles after they take possession of the home, resulting in the housing department citing the former owner for housing code violations if the property is not properly maintained.
“After the bank takes over and the grass grows, we cite the property, and notice goes to the owner who was foreclosed,” Curran said.
“This is a way to keep track of the bank.”
The problem of poorly maintained foreclosed properties has hit Curran?s 3rd District hard, he said, adding to the woes of a city that has been wracked with mounting foreclosures.
A recently issued report on the foreclosure rate in jurisdictions throughout Maryland showed Baltimore City had 3,349 mortgages enter arrears in 2007 ? a 793 percent increase from 2006.
The sagging real estate market is costing the city millions in lost tax revenues, according to preliminary estimates.
Halfway through the current fiscal year, budget analysts are predicting a $20 million to $30 million shortfall in receipts from recordation and transfer taxes ? revenues that played a key role in past city surpluses when the real estate market was booming.
The new bill is the latest move by the city to combat the foreclosure crisis by taking aim at banks and lenders.
City officials filed a lawsuit in federal court on Jan. 7, claiming mortgage lender Wells Fargo engaged in a practice called “reverse redlining,” in which neighborhoods of predominantly minority homeowners are targeted with high-price loans.
Attorneys for the city attribute to this practice a foreclosure rate four times higher for Wells Fargo mortgages in predominantly black neighborhoods than majority-white neighborhoods.
Last week Baltimore City Solicitor George Nilson said he was considering filing more lawsuits against lenders, though he declined to say which lenders would be targeted.
In addition to holding lenders more accountable, Curran also wants to give owners of vacant lots a bit of a break by introducing a separate measure today that would do away with a $25 annual registration fee for all vacant-lot owners.
“They already pay property taxes on vacant lots, sometimes up to $200 or $300 a month,” he said. “They don?t need an extra tax.”
