DS News

18 VACANT AND ABANDONED PROPERTIES: AN 'ISSUE OF NATIONAL CONCERN' Five Star Institute President and CEO Ed Delgado recently met with HUD Secretary Julián Castro to ask the Secretary to consider issuing a mortgagee letter to set the definition and criteria for identifying vacant and abandoned properties and then accelerating those properties to foreclosure. e problem of so-called "zombie properties," or those that have been vacated but have not completed the foreclosure process, has become an "issue of national concern," according to Delgado. When these properties stay vacant for an extended period of time—as long as two or three years or more in some cases—they can potentially have devastating effects on their surrounding communities because they not only lead to lower property values, but they often become magnets for vandalism, squatting, and violent crime. In their recent meeting, Delgado asked Castro to consider opening up a dialogue with the servicing industry to talk about vacant and abandoned properties. "I have a decent perspective on what you're talking about, because I used to be a city councilman and then the mayor (of San Antonio)," Castro told Delgado. "So we saw it not just from an individual perspective, but from the perspective that concerns neighborhood associations and community associations and folks that have to deal with the impact of vacant houses on their block, and what it does to everyone and not just the individual." Castro said of the proposal, "Send it our way, and we'll make sure it gets to my desk. I'd love to take a look at it." Trying to foster a dialogue on vacant and abandoned properties has been a project of Delgado's and many leaders in the mortgage servicing industry for four years. In November 2015, Delgado delivered opening remarks and moderated two panels—one on transforming blighted communities—at the National Property Preservation Conference (NPPC) in Washington, D.C. In his opening remarks at the NPPC, Delgado called for national solutions for the vacant and abandoned properties issue and praised Ohio State Bill H.B. 134, a "fast-track foreclosure bill" aimed at expediting the foreclosure process, which had passed in the Ohio State House of Representatives by a unanimous vote earlier in November. Delgado called Ohio State Bill H.B. 134 "an important template toward the introduction of a national course of solution for vacant and abandoned properties." e Ohio fast-track foreclosure bill has become a template for several other states to use when drafting similar legislation. e bill, which in its second incarnation after a similar bill failed to pass in 2014, is currently awaiting a vote in the Ohio Senate. "We are very hopeful," said Ohio State Rep. Cheryl Grossman, the bill's co-sponsor. "e discussions are ongoing and we hope to see some action soon." Subsequent to his meeting with the secretary, Delgado moderated an important industry panel on community blight and the devastating effect that it has on homeowners. e panel moderated by Delgado included Robert Klein, chairman and co- founder of SecureView and chairman of Safeguard Properties; Richard Monocchio, executive director, Cook County Housing Authority; Gina Metrakas, director of urban revitalization, Rock Ventures; and James F. Taylor, SVP, asset management and preservation, Wells Fargo Home Mortgage. e panel discussed such topics as the extent of the blight problem in the country and what threat blighted properties pose to the communities in which they are located; the problems with using plywood to board windows in vacant and abandoned homes and whether servicers are on board with using clear board; what states and local municipalities are doing to address the blight issue; and what progress can be expected on eliminating blight in neighborhoods nationwide. Editor's note: e Five Star Institute is the parent company of DS News and DSNews.com. HUD Secretary Julián Castro (left) meets with Five Star President and CEO Ed Delgado.

• Cover