New San Diego Ordinances Hold Banks Accountable

The San Diego City Council recently unanimously approved two out of the three ordinances designed to hold banks more accountable for distressed loans. The two ordinances will aim to give the city more tools to hold property owners responsible for abandoned properties and require the banks that do the business with the city to provide the confidential data about their lending, foreclosures and service to minority communities. The third ordinance, and the ordinance with the most attention on it, would require banks to register with the city when they foreclose on a property, and be fined $1,000 a day if the bank doesn't keep up the home. The Abandoned Property Ordinance that was approved would require owners to file a notice with the police of an abandoned property and fine them if they do not make a good-faith effort to keep up the property. These new rules are meant to keep neighborhoods cleaner and safer. 

Government Affairs Chairman for the San Diego County Association of Realtors, Ed Smith, says this will cause hurdles for the property owners that just want to sell. "While we are in absolute opposition to homes in blight, this is something that has good intentions but could have consequences." The council has been discussing an ordinance such as this since 2007 and finally with changes to the council and convincing the code compliance department the rules were necessary made it possible to finally pass the measure. 

The second measure requiring banks doing business with the city to provide lending and foreclosure information was aimed at encouraging good bank behavior. "It makes a lot of sense if you're going to compete for city business and taxpayer dollars that we want to see how you act with the public," City Council President, Tony Young said. Young sponsored the rule change after attending a conference in March in Washington D.C., where he heard other cities, such as Los Angeles and New York were enacting similar ordinances. 

Concern about foreclosures and their impact on communities remains high, even if the trend is improving. Real Estate tracking from DataQuick showed the number of foreclosures throughout San Diego County has dropped year over year for 22 straight months as of July 2012. There were 452 foreclosures in July. The council's action comes at a time when foreclosures are at their lowest levels for a July in six years and far below the peak of 2,004 foreclosures in a single month in 2008. 

No comments yet.

Leave a Reply