City Controller Ron Galperin issued an audit today detailing the ineffectiveness of the City’s current foreclosure tracking program — along with recommendations for a more targeted GeoRegistry of foreclosed homes and a plan to improve the inspection and enforcement process for foreclosed and blighted properties.
Galperin’s office audited the City’s Foreclosure Registry Program, which was established in 2010, and required lenders to register properties and to pay a registration fee when they initiated a residential foreclosure. The intent was to track foreclosures, to prevent neighborhood degradation, and to impose fines and penalties on blighted properties.
Auditors found that although the Housing and Community Investment Department, which manages the program, received $5 million in registration fees from July 2010 through March 2014, no penalties for blighted, abandoned properties were collected during this period.
“The City created this program with the best of intentions–to preserve our neighborhoods and mitigate blight,” said Galperin. “But it isn’t performing up to our expectations or giving us a good return on our investment, which is why I’ve laid out an Action Plan to fix it.”
The Action Plan calls for:
● The creation of a self-populating GeoRegistry to track properties and their legal owners in the foreclosure process more efficiently.
● Inspection of homes when lenders have taken legal ownership of the property and can be held accountable for its condition.
● Streamlining the collection of registration and inspection fees to fund a robust blight mitigation and code enforcement program.
● Providing detailed information to City departments and decision makers about distressed properties–allowing them to more easily coordinate and target enforcement.
“This plan will allow us to improve the condition of our blighted properties–and our neighborhoods,” said Galperin.
Councilman Gil Cedillo, Chairman of the City Council’s Housing Committee, has also convened a working group that has been evaluating the foreclosure ordinance. Cedillo praised Controller Galperin’s audit and approach: “The Controller is offering solutions to reduce blight in LA neighborhoods,” said Cedillo. “Since being elected into office, cleaning up our neighborhoods and reducing blight has been my number one priority. I want to make sure we are doing all we can with the laws that are on the books,” he added. “I welcome Controller Galperin’s findings and recommendations as I continue to work on legislation that will strengthen our foreclosure ordinance, hold banks accountable and more efficiently curtail neighborhood blight.”
One group particularly interested in preventing neighborhood blight is SEIU 721, many of whose members’ families live in neighborhoods severely affected by the foreclosure crisis. “For years SEIU Local 721, ACCE and our other community partners in the FixLA Coalition have been pressing the City to hold banks accountable for failing to maintain foreclosed houses,” said SEIU 721 President Bob Schoonover. “We are pleased today to see that the audit by Controller Ron Galperin demonstrates clearly that the current ordinance has not been enforced. The initiative taken by Controller Galperin will undoubtedly have a huge impact in forcing the banks to clean up the blighted homes they have left all over our city.”
An extended description of Galperin’s Action Plan can be found in Appendix II of the audit.
