Santa Clarita Real Estate

California bill requires lenders to maintain foreclosed homes.

A bill that passed the state Senate here on Monday April 28, 2008 would require lenders to maintain foreclosed properties or face fines of $1,000 a day.

California has one of the highest foreclosure rates in the nation. Many communities, particularly in the Central Valley, are riddled with homes that have been abandoned by buyers who could not afford their mortgage payments when they reset to higher rates.
The vacant properties become eyesores, overgrown with weeds, brown grass, green pools and some properties have become home to squatters.

Under the bill by Senate President Pro Tem Don Perata, local governments could impose the fines on lenders after giving them 14 days’ notice to fix the problems.

"Senator Perata’s bill not only tries to help those in danger of losing their homes, it tries to make sure property values don’t go down in neighborhoods where foreclosures already are problems," Perata spokeswoman Lynda Gledhill said.

The bill, supported by consumer groups and local governments, and was sent to the Assembly on a 28-10 vote. Because it is urgency legislation, it would take effect as soon as it is signed into law.

The hardest-hit counties are Merced, San Joaquin, Stanislaus, Sacramento and Yuba, all in the Central Valley. The report showed one of every 737 Merced County residents and one of every 1,003 Sacramento County residents lost their home to foreclosure in March.
Source: Associated Press