First Am Looks to Manage Vacant Property Registrations
A complex and emerging set of local vacant property ordinances have become a real problem for servicers nationwide, as municipalities have turned towards vacant property registration policies as a way to both track vacant homes within a city's bounds and to levy additional fees and fines on lenders. The fines are often designed to prevent neighborhood blight, or in some cases, HW's sources say that additional fees are one way local governments are looking to offset lost property tax revenues. "More than a few cities charge a hundred bucks or more just for us to tell them that there is a vacant property out there," said one servicing manager that spoke with HW Thursday morning. "And if we don't register and pay on time, all sorts of nasty things can happen." First American Field Services and First American Real Estate Tax Service, both subsidiaries of title insurance giant The First American Corporation (FAF), said Thursday that their companies have rolled out a jointly-managed vacant property registration service that manages, tracks and maintains the registration process for lenders and servicers. Properties in a lender's servicing or REO portfolio requiring vacant-property registration are identified and then the registration process, including the disbursement of fees to local jurisdictions, is managed for the client. "As new ordinances are passed in various jurisdictions, our vacant-property registration database is updated and we are able to revise the registration information on behalf of our clients as needed," said Paul Dauterive, president of First American Field Services. "Our service eliminates the need for servicers to dedicate resources to registration." Implementation of vacant property ordinances can vary widely; in Chula Vista, Calif., for example, a 2007 vacant property ordinance requires a local field servicer to inspect vacant properties weekly, and the name and 24-hour contact information of a responsible party must be visibly posted on the building. Wilmington, Delaware enacted a vacant property registration ordinance with a sliding annual fee scale; the longer the property remains vacant, the greater the fee. The ordinance allows up to a maximum of $5,000 if the property has been vacant 10 years or more. And in Cincinnati, an ordinance requires evidence of general liability insurance, with a minimum of $300,000 for residential properties, and $1,000,000 for commercial or industrial properties. Vacant property ordinances are a big issue for servicers, although one that tends to be an operational concern that lives outside of media focus. Safeguard Properties, one of the nation's larger field service providers, maintains a publicly-available list of known local ordinances. For more information, visit http://www.firstam.com. Disclosure: The author held no positions in FAF when this story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.