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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 48 April 2024 F E A T U R E S T O R Y THE IMPORTANCE OF VACANT PROPERTY REGISTRATIONS Jeff Connell of MCS explains how tracking vacant properties can help owners avoid the nuisance and expense of violations, while keeping their properties maintained and up to community standards. B y J E F F C O N N E L L W hen a property is unoccu- pied, many municipalities require that the owners register the address. Known as Vacant Property Registration (VPR), these lists are a way for local governments to keep track of potentially problematic properties. The VPR process arose in response to the rise in deteriorating vacant buildings following the foreclosure crisis in 2008. Local governments began enacting VPR ordinances to discourage vacancies, identify the owners of vacant properties and ensure those owners maintain them to community standards. The VPR list identifies and accounts for unoccupied properties throughout a municipality and ensures owners actively maintain, preserve and manage the property to ensure it does not become a blight to the community. Property owners, as well as mortgage servicers, have a never-ending list of responsibilities and the VPR process is one aspect of property preservation that may seem insignificant at first glance. Tracking enacted registration ordinanc- es by municipality, understanding the related registration (and deregistration) requirements and completing the actual property registration process can be a time-consuming and potentially expen- sive undertaking. In addition, overburdened local municipalities may not have the time or proper staffing to constantly monitor VPRs and remind owners they must stay in compliance. But just because a local VPR list is not being constantly checked does not mean owners are exempt from penalties once the administrative board verifies which owners are—and which are not— in full VPR compliance. In fact, it is the complete opposite. VPRs can cause major challenges, with small fines compounding into major penalties for those not in compliance, as well as liens that could prevent a servicer from selling a property. Some local governments can even impose fees that increase over time or may require owners or servicers to have a plan for the proper- ty before it can be de-registered. Depending on where the property is located, registration may be required after a certain period of time or after a foreclosure. Some municipalities charge heavy fees by the day that can quick- ly become a significant liability. The other risk to consider is the registration requirements change frequently, neces- sitating constant monitoring to ensure compliance. In fact, the term "vacant property registration" is actually a misnomer, because although many are required due to vacancy there are other situations where registration is required, such as delinquency, foreclosure start or sale, REO, or a combination of these charac- teristics. In some cases, there might not J E F F C O N N E L L is Senior VP of Mortgage Services at MCS, overseeing compliance, risk, and property registration for the organization. Jeff has an extensive record of accomplishments working in the mortgage servicing industry for more than 30 years at places such as Chase, GMAC, Mr. Cooper, and Pacific Union Financial.