Banker: 'What'd I Do Wrong, Officer?' Cop: 'You've Got Algae in the Pool, Sir'

[question everything]

MAY 1, 2009

Banker: 'What'd I Do Wrong, Officer?' Cop: 'You've Got Algae in the Pool, Sir'
Fearing Blight, a California Town Makes It a Crime to Neglect Foreclosed Homes

By NICHOLAS CASEY
WSJ

INDIO, Calif. -- Officials at a Citigroup Inc. office in St. Louis placed a call to this desert town recently. The bank had caught word that Indio was coming after the lending giant with fines and threats of criminal charges. The offense: an algae-infested swimming pool at 79760 Eagle Bend Court. Citigroup wound up in charge of the foreclosed home, one of thousands of such properties it was managing across the country. But last year, Indio passed a law that allowed it to charge banks with a criminal misdemeanor if they allowed a home to fall into disrepair.

"If I need to do it, I'll say, 'Mr. Bank President, if you don't come and take care of your property, we're going to come arrest you and take you to court in California,'" says Brad Ramos, Indio's long-serving police chief. The hard-line approach is part of this town's attempt to gain leverage over some of the nation's largest lenders. A couple of years ago, Indio was a real-estate bonanza. Old date farms were closing down, sprouting subdivisions in their places. Today it's a different scene with one in 10 houses either in default or foreclosure. The upshot is that faraway banks have become the de facto landlords of Indio, and people here say the absentee lenders are letting the whole valley fall apart. Houses "look like dust bowls," says Gene Gilbert, the mayor pro tem, who thinks a glut of run-down homes may depress his hometown's local market long after the recession ends.

(snip)

Mr. Ramos has organized his department to focus on this new type of crime. Uniformed officers make weekly sweeps through subdivisions, casting about for infractions like dead landscaping. Financial institutions from Seattle to New York are finding themselves providing new services that include pruning bushes and watering cactuses.

(snip)

Even before the mortgage crisis erupted in full, big cities like Cleveland and Buffalo had fashioned laws of their own to browbeat banks into taking care of urban blight. Now some small towns are also taking matters into their own hands. Indio's neighbors Palm Springs, Desert Hot Springs and Cathedral City each pushed ahead with laws much like Indio's. The town's own ordinance was fashioned off a 2007 law from Chula Vista, a city south of San Diego which began fining lenders up to $1,000 a day for unsightly or dangerous code violations such as broken windows.

(snip)

Countrywide, one of the biggest lenders in the area, initially just tried to make the problem go away by writing checks, say city officials. Instead of attending to the upkeep on the properties, they'd ask, "How big was the fine?" Mr. Anderson recalls. City officials say Countrywide has since become one of the most proactive lenders, contracting local real-estate agents to monitor properties and paying for gardeners to handle the upkeep. "There's considerable financial incentive for the bank" to maintain properties, a Countrywide spokesman said.

http://online.wsj.com/article/SB124112509277274533.html (subscription)

Printed in The Wall Street Journal, page A1

[dixiegrrrrl]

1. Great idea! I hope it spreads to every town in the country.

[Xithras]

2. The thing about Countrywide is interesting.

One of my investment properties is in preforeclosure right now (it's being sold, so I'm not terribly worried about it) and Countrywide holds the papers. At some point over the last month, they came over and started mowing the lawns and securing the property.

I don't know if it's a PR thing, but apparently they've recently become very proactive about keeping their properties up.

[nilram]

13. they've probably learned it's easier to sell a house

when it has all its copper piping intact, and that it stays intact if it doesn't look abandoned.

Good luck, hope the sale goes through and you get some cash out of it to boot.

[dembotoz]

3. someone could make money at this

pay me x dollars per month per house, i will maintain and keep your sorry as out of jail.

[question everything]

12. There were stories on TV showing business booming with companies

that go into houses where the former owners left only with their bare necessities and they round up everything and hauling to the landfill. And I was thinking of how many poor families could benefit from furnitures, and dishes, and TVs...

[eppur_se_muova]

14. AND you'll provide me with a place to live.

Great opportunity for those kicked out of their own homes!

[izquierdista]

4. Eventually....

At some point, it would be more cost effective to let the poor schlub who was foreclosed upon stay in the home. Then he would be called to task for a green pool and a brown lawn.

[truedelphi]

9. That's some pretty good thinking.

No more homeless camps, while those occupying such are fronting the banking class their twelve trillion dollars.

As are we all.

[malaise]

5. It's a great idea for several reasons

the most important of which is public health. Who needs Malaria or West Nile from all those mosquito infested ex-swimming pools.

Lock them up and throw away the keys particularly since they celebrated the Senate's decision not to allow home owners to reoccupy their homes.

I hope this spreads faster than Nafta flu.

[glitch]

8. gets someone back into their home, or helps local employment or adds to the cities coffers.

and annoys the bankers. All good.

[question everything]

11. Not to mention stealing the copper pipes

and, in some cases, let the gas explodes.

[Hoopla Phil]

6. Kudos to that police department. Great idea

[tridim]

7. Turn them into skate parks.

It's happened before. :)

[annabanana]

10. Not bad!. . .It'll keep banks from foreclosing too quickly without giving

the homeowner some options as to how to keep in their homes.. It will give banks incentive to sell the ones they take at reasonable prices AND help keep up the property values of the surrounding neighborhoods.

. . to say nothing of helping the coffers of stretched local budgets.

[Bigmack]

15. Keeps employment up, too.

Lots of landscaping and yard cleanup workers have been let go by the former owners of those foreclosed homes. If the banks re-employ those people, everybody wins. Well.... except for the poor schlubb who's out of his house.