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» VISIT US ONLINE @ DSNEWS.COM FROM THE FIELD W took an average of 382 days to complete. Needless to say, many things can happen to a property and a neighborhood during that period of time. ithout question, 2012 has been a very challenging year for the REO market. In the third quarter of 2012, RealtyTrac reported that the standard foreclosure in the United States due to default have increased throughout the country at an alarming rate. Homeowners and tenants have been abandoning their homes and leaving communities in a state of blight. To add insult to injury, communities have also been victims to an unprecedented number of home evictions. Consequently, these vacant properties are often left in a state of disrepair and they have devastated community after community. You don't have to watch an episode of Ghost Throughout the past few years, vacancies Hunters to identify an area that was once an occupied and flourishing neighborhood but now resembles a "Ghost Town." Wayne County, Michigan, is a good example of this Ghost Town phenomenon. At the height of the foreclosure crisis, values in cities like Wayne County's Detroit were hit so hard and the abandonment of property was such an issue, that the closing cost to buy a home often outweighed the actual purchase price. A simple walk through the streets of Detroit back then resembled deserted towns from the wild, wild West. Unfortunately, home prices have been so adversely impacted in Michigan that in a recent article in the 24/7 Wall St. Morning Newsletter, it was reported that it's more expensive to purchase a car than a home in places like Dearborn Heights, Michigan. No Vacancy? As a result of the vacancy issue, foreclosed and abandoned properties have become more than an unsightly eyesore; these properties represent a significant safety concern to the public. The risk was so clear and immediate that local governments took notice and took swift and decisive actions to safeguard their communities. Now, they're rallying for the backing of their Fed counterparts to launch joint counter-measures that would undoubtedly have a tremendous impact on the business of default servicing—property preservation in particular. Prior to the foreclosure crisis, this topic was virtually non-existent. However, today's "in-phrase" for real estate professionals is vacant property registration (VPR). Property owners who fail to register or maintain vacant properties can be hit with significant penalties or even worse, loss of the property. The challenge for real estate professionals needed public services. Since vacant properties bring a number of issues to the neighborhood, municipalities have acted quickly and implemented ordinances to address the vacancy issue and the baggage that comes with it. There is a secondary consideration; due to the lower tax-based revenue streams, municipalities were prompted to impose very stiff fees and penalties. One industry criticism is that some of these ordinances may have been established to drum up revenue for some of these struggling municipalities. A city where the extreme has come to is that there is no national VPR standard. It is difficult, at best, to try and establish a general VPR rule that could apply across-the-board for every property throughout the country. As it relates to REO, the owners are fruition is in Minneapolis, Minnesota (Chapter 249 of the Minneapolis Code of Ordinances). The Vacant Building Registration Application calls for an application fee of $ 6,948 and the registration fee will increase on a yearly basis. However, in all fairness to the Minneapolis Inspections Division, there are provisions within their ordinance that may allow the fee to be waived. Leaving Dodge As hard as lenders have been hit, there is often lenders who took the property back at a foreclosure sale. It is fairly common for these owners to contract through a servicer or real estate agent once the foreclosure has been processed. More often than not, between the foreclosure process and the actual assignment to the real estate professional, vacant properties fly under the radar before their representative has had an opportunity to determine if the property has been vacated, vandalized, or worse. Areas with a high number of abandoned another down side of the foreclosure crisis to consider, and it's one that impacts responsible homeowners who make their mortgage payments on time and elect to stay in their homes. The most frustrating aspect of the Ghost properties have been adversely impacted by declining property values and increased crime; these factors have contributed to a much lower tax-based revenue stream for local governments. Communities throughout the country rely on these revenues for the funding of a variety of Town phenomenon is the devaluation of property values. There are far too many neighborhoods throughout the country littered with foreclosed and pre-foreclosure homes, reducing property values by significant percentages. The abandonment issue, specifically when it is embodied as a strategic move by a borrower who actually has the ability to pay, only adds fuel to the fire. While their neighbors are meeting their mortgage obligations, others are defaulting on purpose to take advantage of loan modification programs or to simply wait out the 61

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