1 Strategies to Deal with Vacant and Foreclosed Properties October 5, 2012

Building, Fire and Related Codes of Baltimore City: Definition. “Vacant structure” means an unoccupied structure that is unsafe or unfit for human habitation or other authorized use Determinations. A determination of vacancy and a determination of noncompliance with a notice or order issued under this section may be based on observation that a structure: 1) Is open to casual entry, 2) Has boarded windows or doors, or 3) Lacks intact window sashes, walls, or roof surfaces to repel weather entry. Vacant structures are NOT merely unoccupied buildings or units. HUD’s vacant unit account can be misleading. 2 Code Definition of a “Vacant Structure”

“Vacant Structure” Definition Applied It only requires a single board on one window for a property to be designated as a Vacant Structure and therefore “Unfit for Human Habitation.”

Baltimore City Overview Population: 620,961 Housing Units: 297,685 Open violation Notices: 32,278 Vacant Building Notices: 15,978 Property Maintenance Inspectors: 87 Inspections completed in FY’11: 252,320 Work Orders Closed in FY ’11: 40,581 4

Total of approximately 16,000 vacant properties. About 10,000 are concentrated in areas where there isn't enough demand to rehabilitate and reoccupy vacants now or in the near future. Scope of the Blight

Vacants to Value Strategy:  Cleaning, boarding, and demolition of blighted structures.  Community Development Clusters: forming partnerships with multiple non-profit and for-profit developers interested in investing in these areas. Scope of the Blight

The remaining 6,000 vacants are located in areas where the housing market can support revitalization. Vacants to Value Strategy:  Streamlined Code Enforcement  Citations ($900)  Injunctive Relief  Receivership Scope of the Blight

8

9 “Signs” of foreclosure

4004 Parkwood – Foreclosure Filed March 16, 2010; Photo taken June 23, 2010

11 Front and Rear of 2802 E. Fairmount Ave.

12 Front of 2801 Virginia Ave.

Building, Fire and Related Codes of Baltimore City: Responsibility of mortgagee. A person that acquires an interest in property by way of a mortgage or deed of trust (“lender”) is liable to the same extent as an owner/transferee for a violation or condemnation notice pertaining to a vacant unsafe structure, if: 1) the person with primary responsibility fails to comply with the notice, 2) the lender has been notified by certified mail of the violation or condemnation notice, and 3) within 180 days after the receipt of the notice: a. ratification of a foreclosure sale of the property has not occurred, or b. the lender has not released its mortgage or deed of trust During pendency of foreclosure. During the pendency of a foreclosure, the lender is responsible for maintaining the property free from high vegetation and from accumulation of trash and debris. 13 Who is responsible for foreclosed property?

Foreclosure Complications for Local Governments 14 Foreclosure filing does not always equal a sale (transfer).  Some filings get resolved without the need to foreclose  Need to watch out for the borrowers/lenders that have walked away based on a filing. A sale (auction) does not equal the transfer of the property. Identifying the parties involved. Getting in contact with a decision maker. Getting someone to take responsibility during the foreclosure. Deed recordation.

15 Unoccupied but not Vacant – Keep an eye on it.  Issue violation notice at first signs of decline.  Require a non-owner occupied property registration. Vacant property  Locate responsible party  Clean, Secure and Lien Property  Keep them on a short leash  Use Citation Authority  Litigate if necessary - Injunction vs. Receivership What to do in relation to vacant and abandoned foreclosures

What is a Receivership? A receivership action is a code enforcement tool that allows the City to request the appointment of a vacant building receiver to abate the public nuisance created by vacant and problem properties. All properties in receivership actions had been issued Vacant Building Notices by Baltimore City. If an owner of the property fails to comply with the notice, an attorney for Baltimore City’s housing department can request the District Court to appoint a Receiver to sell, rehabilitate or demolish the property. If a property is sold through a public auction or private sale, the Receiver oversees the transfer to the new owner and reports the progress to the District Court for approval. BUILDING, FIRE, AND RELATED CODES OF BALTIMORE CITY SECTION 121 VACANT BUILDING RECEIVER 16

17 How to Find a Responsible Party Create a checklist:  Property address  Mail-to address  Is the property registered?  Has the owner pulled any permits?  Do they own any other properties?  Are any of these properties registered? If so, repeat analysis.  Are the taxes paid?  Are there additional names listed on the deed? If so, repeat analysis.  To what address was the last water bill mailed?  Have they filed for bankruptcy?

18 Data Sources: Land Records (Online?) Property Registration Licensing Permits Prior Code Actions Investigator Files Tax payments Water bills Identify In-House Resources

19 Free Online Resources Phone book, Google Search (Web sites), Pipl, Facebook, Myspace, SS Death Index, Obituaryhttp://ssdi.rootsweb.ancestry.com FDIC (Banks), MD Register of Wills, Case Search, SDAT, National Registered agent link, Federal Inmate search, State Inmate Search, Short Sale Lender site, specialists.com/community_reports.shtml MERS, MD Land Records,

20 Mortgage Electronic Registration System (MERS)

21 Knock on doors and ask neighbors Motor Vehicle Records. Fee Based Internet Services, Accurint, CLEAR Other Resources

Recap of Foreclosure Reform in Maryland 2008 Foreclosure Process Reform Expanded the foreclosure timeline and required notice to homeowners Tightened lending standards 2009 Additional Foreclosure Process Reform Facilitated local government intervention Expanded list of parties entitled to notice 2010 Mediation Instituted mediation, including judicial and OAH procedures, to ensure meaningful loss mitigation evaluation along with a face to face meeting Established Maryland Housing Counseling Fund, capitalized by lender fees at foreclosure filing stage ($300) and homeowner mediation opt-in fee ($50) 2011 Mediation Refined Increased time for borrowers to opt-in to mediation from 15 days to 25 days Provided for changes to forms through regulation Made certain changes relating to OAH (rules, timing) 22

Maryland Foreclosure Task Force 2011 Governor O’Malley convened a Task Force in the fall of The charge to the Task Force was to: 1.Assess foreclosure trends and the impact of foreclosures on communities across Maryland; 2.Identify further innovative and effective strategies to enhance loss mitigation outcomes for homeowners; and 3.Identify innovative and effective strategies to strengthen Maryland neighborhoods impacted by foreclosure. 23

Maryland Foreclosure Task Force Create a centralized Foreclosed Property Registry  Create a “fast track” liquidation of vacant properties. 3.Enact a Neighborhood Conservation Tax Credit 4. Expand financing tools and incentives for reclamation of foreclosed properties 5.Encourage expanded partnerships between nonprofits, local governments, REO holders and other Foreclosure Purchasers 6.Encourage transition of distressed properties, including multi-family properties, to high quality affordable rental opportunities 7.Encourage the timely resale of distressed and REO properties to new homeowners.

Centralized Foreclosed Property Registry Effective October 1, 2012 Within 30 days after a foreclosure sale of residential property, a foreclosure purchaser shall submit an initial registration to the foreclosed property registry. The initial registration shall contain the following information: 1.The name, telephone number, and address of the foreclosure purchaser; 2.The street address of the property that is the subject of the foreclosure sale; 3.The date of the foreclosure sale; 4.Whether the property is a single–family or multifamily property; 5.The name and address of the person, including a substitute purchaser, who can is authorized to accept legal service for the foreclosure purchaser; 6.To the best of the foreclosure purchaser’s knowledge at the time of registration: a.Whether the residential property is vacant; and b.The name, telephone number, and street address of the person who is responsible for the maintenance of the property; and 7. Whether the foreclosure purchaser has possession of the property. 26

Expedited Foreclosed Process for Vacant Property Effective October 1, 2012 At the request of the Foreclosure Purchaser, a county or municipality must issue a certificate of vacancy if the local jurisdiction determines that the property is vacant or unfit for human habitation. A county or municipal corporation may charge a fee of up to $100 and establish procedures for the issuance of these certificates. If the certificate is valid at the time of filing an order to docket or complaint to foreclose, the bill authorizes a secured party to expedite the foreclosure process by skipping the requirement of a loss mitigation statement and proceeding to an order to docket the foreclosure proceeding. 27

Questions? Peter Dolkart, Legislative Director, DHCD