Andrew Taylor has lived in his two-story home in Clinton for more than 30 years and always makes his mortgage payments on time.
Taylor enjoys his Boniwood neighborhood with several cul-de-sacs, well-kept lawns and homes painted in various colors, but he didn’t realize three houses within three blocks of his home, including one across the street, have been foreclosed.
“It impacts my property value, no doubt,” Taylor said standing outside his house Friday, April 21. “Did the property owner do what [they] was supposed to do in terms of paying the mortgage? I don’t know the situation, but [foreclosures] affect not only the property owner, but everyone in the neighborhood.”
Subsequently, Prince George’s County Councilman Mel Franklin (D-District 9) of Upper Marlboro has introduced three pieces of legislation to combat foreclosures in the jurisdiction, which ranked in the top five in the state in foreclosure rates.
One of the bills would allow the county’s Department of Permitting, Inspections and Enforcement to create a vacant and abandoned program to require financial institutions to register a foreclosed property with the county.
For example, a property would require a vacancy notice and must be secured and maintained. If not, a fine up to $1,000 would be enforced for each infraction per day.
The other two foreclosure bills, if approved this year, include: banks and other property owners to pay a $1,000 fine if they don’t register the property with the state; and require financial institutions to promptly record ownership and pay transfer and recordation taxes within 15 days after a foreclosure purchase.
“I think if we adopt and fully implement all three pieces of legislation … it certainly would be one of the most aggressive local legislative efforts to combat the blight created by vacant and foreclosed properties,” said Franklin, who’s contemplating a run for county executive or one of the two at-large council seats next year.
Ron Cooper, president with the National Association of Real Estate Brokers, agrees with Franklin’s foreclosure legislation and the fine structure. However, he said during a telephone interview Monday, April 24 from Los Angeles, the legislation should be stronger.
For instance, incorporate language to ensure banks and property owners not only repair and maintain the land, but also make them responsible to stabilize the neighborhood.
“You own the house, then you need to figure out what to do with it,” he said. “If you can’t sell it, then you have to be a responsible landlord. You can’t just hit and run. You have a responsibility to stabilize that community. Desolate neighborhoods have the same effect on value as blight.”
In neighboring Montgomery County, its council unanimously passed similar legislation April 18 to impose civil penalties against those who don’t register a foreclosed property. Officials said in a press release the county lost $6,000 in revenue when banks and out-of-state investors record a deed on a property after it’s resold to another buyer.
A 2012 state law allows jurisdictions to impose a fine if a foreclosed property isn’t registered within 30 days.
One problem: those who purchase foreclosed properties, mainly banks and other financial institutions, often take between nine and 18 months to transfer the title, which makes it harder to determine who owns the property. In addition, officials say it creates vacant properties that become eyesores and counties lose money in transfer and other taxes.
Meanwhile, a report released last week by ATTOM Data Solutions shows that foreclosure data in the first quarter of 2017 was at its lowest level in 11 years. In March, about 83,415 housing units had a foreclosure filing, a decrease of 24 percent from the same time last year.
However, Maryland ranked second in the nation in March with its foreclosure rate at one in every 820 housing units. The real estate firm RealtyTrac lists Prince George’s as having the fifth-highest rate in the state last month at one in every 598 units.
Franklin admitted residents have expressed frustration on the county foreclosure crisis, but it took time to understand the intricacies of the foreclosure process.
“As a local government, we have to be doing everything in our authority to hold the banks, outside investors accountable for properties that are their responsibility,” he said. “This is about investing local. None of that is going to be successful if we don’t have strong property standards in our existing communities.”