Bank-owned homes cost city time, money

Nearly 1,000 homes in Richmond are bank-owned, but many banks have failed to keep them maintained. So city code enforcers are spending big bucks and countless hours securing vacant properties and chasing down the banks that own them.

“I got hit the hardest,” said David Rogowski, a code enforcement officer at the Richmond Police Department responsible for the most blighted area in the city – the Iron Triangle.

Rogowski has been dealing with a sharp rise in foreclosures this year. He said that embarrassed and uninformed residents often flee their homes in a hurry, leaving behind furniture, trash and overgrown grass.

“When I come there in the morning, the door is wide open, the lights are still on and there’s wind blowing through that house,” he said.

When Rogowski discovers deserted houses, he has to notify the property owner, a task which he said is difficult. He has found two owners’ phone numbers of his dozens of cases this year.

Finding an address for the property owner is slightly easier, but still does not often yield successful results. Rogowski said he has mailed between 15 and 30 letters this year to banks and other property owners advising them to maintain and secure a property within 10 to 30 days. In the meantime, the owner is fined $1,000 a day, while the property usually serves as an eyesore and a danger to its neighborhood because it attracts drug users and other squatters.

“Very, very few” property owners, including banks, respond to the letters, besides signing to receive them, Rogowski said.

Jack Burns Jr., president of Security Pacific Real Estate Brokerage in Richmond, said nobody is responding to the city because banks are not delivering these code-compliancy notices to their servicers, the people who are hired to handle the sale, marketing and cleaning of a property.

“Now, we’re talking about Bank of America, Wells Fargo, Chase,” Burns said. “One end of the bank doesn’t know what the other end of the bank is doing,” probably because the institutions are overwhelmed with this year’s spike in foreclosures, he said.

The problem, Burns said, is that Richmond’s code enforcement officers have no idea who these service companies are. Nobody knows except realtors, he said, like the ones who work for Burns at Security Pacific.

The problem would be eased if officers would ask realtors to contact the servicers, Burns said. Realtors put signs with their contact information on vacant properties within a week of foreclosure.

Officers contact realtors if they can, Rogowski said. However, a lot of times the realtor’s information is not posted. The signs get torn off, they are not posted on houses with occupants, and they are not usually posted on houses in pre-foreclosure or auction.

More than 20 percent of Richmond’s homes – almost 1,600 – are in foreclosure and pre-foreclosure, based on information from RealtyTrac.com and the 2005-2007 American Community Survey on the city’s Web site. Another 644 homes are up for auction.

Rogowski said he often gets the runaround when contacting banks to try to pin down a property owner.

“It’s kind of like they put you in a round room and tell you to sit in the corner,” he said.

Sometimes Rogowski is forced to start his paperwork process over and over again because he said some banks will sell a house every 30 days to pass on the responsibility.

“So how do you hit a moving target?” he said.

Other banks, Rogowski said, will leave the property in the former owner’s name to avoid being held accountable.

“They’re doing whatever they can to squirm out of this,” he said.

Although Rogowski acknowledged that some property owners are receptive, he said he has only issued two compliance certificates this year.

Burns, at Security Pacific, said officers sometimes send code-compliancy notices to old owners for another reason as well. The city gets property-owner contact information from the Contra Costa County Assessor’s Office, which Burns said cannot update records fast enough because of budget cuts.

Code enforcement officers reach another dead end when they send notices to a property owner who moved out of his or her home and is illegally renting the house to people who don’t know the house is in foreclosure.

“I think the city of Richmond is doing the right thing, but their hands are being tied,” Burns said.

The city’s foreclosure ordinance says properties must be maintained and secured. Therefore, when a property owner doesn’t secure a home, the city sometimes requests a warrant and pays for the boarding, locks, abatement crews, permits, court costs and dumping fees associated with clearing and securing the property. That cost ranges from $3,000 to $7,000 per property, according to Tim Higares, a manager in the Code Enforcement Unit.

The city then requests a lien be put on the property in hopes of eventually getting paid back. The home then cannot be sold until its owner pays the legal fines and fees.

In addition to the city, Burns’ company is also affected because its home sales are held up when a title company – the last ones involved in the sale transaction – finds a lien on a property.

“The buyer’s not going to pay for it. The bank’s not going to pay for it. So then there’s this big dispute,” Burns said.

The dispute usually results in the city reducing the fines, costing the city and its taxpayers in the end.