“ ‘Your property was fine,’ ” Ms. Huey recalls the client saying, “ ‘But that’s just trouble waiting to happen. I can’t bring my grandchildren down here.’ ”
Since September, Richmond has vowed to crack down on banks that have neglected to clean up foreclosed properties, which have become more of an issue since the housing crisis began in 2008.
Neglected houses are not just eyesores; Richmond residents said they increased the risk of crime, squatters and fires.
Yet city officials are being frustrated in their search for the financial institutions or people who are responsible for many of the city’s foreclosed and preforeclosure properties. Determining whom to hold accountable often takes so long that properties continue to decay and create problems in neighborhoods.
In September, Police Chief Chris Magnus said that banks often tried to conceal their ownership in less-affluent areas. Bank officials denied that, and after discussions with some of the financial institutions, the chief modified his comments, saying that there may have been anecdotal cases in which ownership was obscured.
Since 2008, when Richmond enacted an ordinance that fined banks $1,000 a day for foreclosed properties with code violations, the city has issued more than $1.8 million in fines to property owners of foreclosed houses. Yet only about $550,800 of that has been paid, according to the city’s finance department.
Mayor Gayle McLaughlin wants to make it easier for the city to seize blighted properties.
“It would show these banks that they can’t simply do whatever they want, that the city means business about taking care of its neighborhoods, and it doesn’t want these houses and these properties lying vacant and creating opportunities for blight and crime,” Ms. McLaughlin said.
In the case of the house facing Ms. Huey’s apartment, which was in preforeclosure as of September, city officers struggled for months to locate the owner. Tim Higares, the city’s code enforcement manager, said that in June code officers had contacted a lawyer for the estate of the house’s deceased owner, who referred them to another lawyer.
That lawyer referred code officers to Select Portfolio Servicing Inc., in Salt Lake City. A notice of sale filed with the county clerk’s office in September stated that the contact was the Quality Loan Service Corp. in San Diego.
Neither company responded to the city until the week of Oct. 23, when Quality Loan Service informed the city that the building had been sold to a company in Texas, according to Mr. Higares. Neither Select Portfolio Servicing nor Quality Loan Service returned calls for comment.
Billy Owens, president of the California Association of Code Enforcement Officers, said that financial institutions could be slow about putting their names on the title of a foreclosed property.
“After the owner gives up possession,” Mr. Owens said, “it can take up to six months, and sometimes even longer, for the new owner of record to get recorded.”
In the meantime, he added, “the banks and loan servicers are putting the responsibility of maintaining the house on the local jurisdiction.”
But it is difficult to determine whether a bank is responsible for the upkeep of a foreclosed property or a preforeclosure home.
The owners of at least 38 properties were fined the maximum $30,000 under the Richmond ordinance from 2009 to Oct. 13, 2011, city records show.
ReconTrust Company, a subsidiary of Bank of America, is listed as responsible for 10 of the 38 properties. Mr. Higares said that he was not certain whether ReconTrust owned the 10 properties, but that after searching property records, code enforcement officers had determined that the company was at least acting as the agent for the owners.
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