Los Angeles still has a sea of foreclosed-on, bank-owned houses in shabby shape, so they've finally taken a step toward getting them cleaned up and sold off. The Los Angeles City Council has approved a program that would take these empty, rundown properties out of the hands of the banks that own them and put them into receivership—they'd be under the control of a person appointed by the court to outsource work for everything from fixing the place to eventually selling it. The expenses would be paid for by the proceeds from the house sales, so, as City Attorney Mike Feuer tells the LA Times, "This program costs nothing."
LA's dropped the ball in the past on dealing with blighted properties. The city's foreclosure registry was supposed to help zero in on problem houses and make it easier to fine the owners to incentivize them to clean up their nuisance residences. But LA never collected any fines at all on any of a host of problem properties. (The registry did create a list of more than 4,000 foreclosed-on properties, but it didn't do much to fix the problem.)
The City Attorney can ask that courts put a receiver in charge of a "nuisance" property, but he doesn't do it very often because the process "requires an attorney to petition a judge." Under the newly-adopted plan, the work can be doled out to private firms, meaning more houses can be put through the program more quickly.
The program will start with 25 empty, blighty houses owned by banks. The owners will be compelled by the court to sell the properties, and once the houses are sold, the owners will get whatever's left after legal and contractor costs are taken out. Now that the City Council's signed off on it, the program only needs the approval of Mayor Eric Garcetti to get started. Once it has that, the city attorney says he could begin working on securing the receiverships after a month.
· Los Angeles approves program to fix up and sell bank-owned nuisance properties [LAT]
· LA Hasn't Collected a Single Fine on Blighty Foreclosed Houses [Curbed LA]
· Mapping the 4,300 Homes in the LA Foreclosure Registry [Curbed LA]