Lenders Walking Away From Some Vacant Foreclosures, Sticking Taxpayers With Maintenance Bill

Bloomberg News reports:

• The public's bill for maintaining foreclosed properties abandoned by lenders and investors may reach as much as $50 billion this year, according to Peter Sepp, vice president of the National Taxpayers Union in Alexandria, Virginia. The U.S. Congress is considering various bills to help cover some of the costs to towns and cities for securing and policing the empty homes, Sepp said. "Housing is now infecting all corners of the economy, including our local governments,'' said Mark Zandi, chief economist of West Chester, Pennsylvania-based Moody's Economy.com, an economic forecasting agency and unit of Moody's Corp. Banks or mortgage companies typically hire people to care for repossessed properties. As foreclosures increase and the value of property drops, more companies are simply walking away, Zandi said.

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• Cleveland Housing Court Judge Ray Pianka is cracking down on banks and lenders that neglect the homes they seize. He posts a warrant list on his court's Web site of people and companies that have failed to answer a summons or pay a fine for building code violations. [...] "Our property values and our quality of life are being decided by people in Hong Kong and Germany who don't even know where Cleveland is,'' said Pianka, who lives on a street with five foreclosed properties, including a condemned home he says is owned by Deutsche Bank.

For more, see Morgan Stanley, Lone Star Stick Taxpayers With Default Costs.

For more on Housing Court Judge Ray Panka, see Cleveland Housing Court Judge Hammering Foreclosing Lenders With Fines, Code Violations.

Go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures I