State Initiatives

States have considerable latitude to enact legislation, dedicate funds, and take action to address the issue of vacant and foreclosed homes. Ideally, a vacant property will be reoccupied quickly, but in a weak housing market where properties may not be readily absorbed, they need to be properly maintained to remain viable as potential investments.

The following is adapted from the publication, Tackling the Mortgage Crisis: 10 Action Steps for State Government, created by the Metropolitan Studies Program at the Brookings Institution.

How States Can Take Action

  • Ensure responsibility on the part of property owners for proper maintenance
    • Grant themselves or local governments broad authority to enforce stringent codes
    • Allow local officials to take legal action and/or impose financial penalties on owners who neglect their properties
    • Place liens on the property to cover maintenance costs
    • Require servicers to bear the cost of maintaining properties
    • Take control of properties when necessary
  • Remove barriers that prevent properties from being put into the hands of responsible owners quickly. To do this, states need to:
    • Review their laws governing foreclosure and judicial sales to ensure they are efficient and cost-effective
    • Provide assistance to municipalities to remove backlogs in the courts and in sheriff’s offices
    • Enact statutes authorizing expedited tax foreclosure procedures for vacant properties, vesting title to foreclosed properties in the county or municipality
    • Enact statutes permitting “spot blight” eminent domain of vacant properties
       
  • Regulate the mortgage lending system so that abuses do not lead to further foreclosures and vacant or abandoned properties:
    • Provide adequate resources for overseeing the lending industry
    • Increase penalties for and/or ban abusive lending practices, being careful to differentiate between clearly abusive tactics (such as no-documentation underwriting) and those that are not necessarily abusive, but may be used in an abusive manner (such as adjustable rate mortgages)

 

 

Library

  • CalHFA Community Stabilization Home Loan Program
    California State Housing Finance Agency

    The Community Stabilization Home Loan Program makes owning a home more affordable for first-time homebuyers by offering a reduced interest rate on a 30-year fixed rate mortgage on selected REO properties in specified areas.
  • Foreclosure and Eviction Practices by State
    National Low Income Housing Coalition

    Prepared by the National Low Income Housing Coalition in summer 2008, this document provides a state-by-state listing of foreclosure and eviction practices.
  • Foreclosure to Homelessness: the Forgotten Victims of the Subprime Crisis
    National Coalition for the Homeless

    This report summarizes the findings of a national survey of state and local homeless coalitions conducted in winter 2008 to determine whether their communities were seeing an increase in homelessness due to the foreclosure crisis.   The report is critical of the response at the state and federal level and provides recommendations for federal strategies.
  • Genesee County Land Bank: Strategies for Transforming Vacant and Abandoned Properties from Liabilities to Assets
    Dan Kildee, Genesee County Land Bank

    Download the presentation from Dan Kildee, Genesee County Land Bank entitled "Strategies for Transforming Vacant and Abandoned Properties from Liabilities to Assets" made December 11, 2008 as part of the NeighborWorks forum, Put Your Action Plan to Work: How to Use HUD's Neighborhood Stabilization Program in Your Community.
  • Massachusetts Neighborhood Stabilization Loan Fund
    Massachusetts Housing Partnership

    The $20 million Neighborhood Stabilization Fund was created to acquire and rehabilitate properties in neighborhoods hardest hit by foreclosures.  The fund will help qualified buyers quickly purchase and hold property while financing is obtained for long-term stabilization.
  • Minnesota Foreclosure Partners Council
    City of Minneapolis

    The Minnesota Foreclosure Partners Council identifies, funds and implements coordinated, innovative policies and programs that address the recent surge in foreclosures.
  • State Summit on Foreclosures and Housing Solutions
    National Governors Association

    On May 28-29, 2008, the National Governors Association Center for Best Practices hosted the State Summit on Foreclosures and Housing Solutions.  The Summit offered state policymakers the opportunity to hear from national experts on actions states could take to mitigate the rising number of foreclosures, prevent future foreclosures, and sustain neighborhoods in a weakening economy.
  • Tackling the Mortgage Crisis: 10 Action Steps for State Government
    The Brooking Institute

    The Brookings Institute describes how the mortgage crisis came to be, and the damage it has so far inflicted. It then provides a set of concrete action steps that states can take to mitigate its impact on families and neighborhoods—and prevent a similar situation from occurring in the future.