As the mortgage and capital markets continue to experience instability and re-adjust following a once-in-a-generation upheaval, many states and municipalities are enacting strenuous vacant property legislation that result in challenges for servicers and may chill the mortgage industry in these locations. Members of the mortgage industry are interested in maintaining a productive and ongoing partnership with states and municipalities to address ongoing challenges with increasing foreclosures.

MBA Opposes Vacant Property Registration Ordinances

Ordinances will further deteriorate the mortgage market by placing unreasonable requirements upon servicers. Mortgage market participants will have no choice but to respond to these unreasonable requirements by significantly reducing their current business or ceasing to make further investments in the communities with unreasonable registration ordinances. Mortgage Bankers Association (MBA) continues to oppose a patchwork of onerous ordinances requiring such things as database registration fees, capital improvements, securing doors and windows with steel, supplying electricity to vacant buildings which increases fire and break-in risk, and installing security systems that historically get stolen and do not stop illegal activity.

MBA, along with a large coalition of financial service companies and property preservation companies is committed to ensuring vacant properties are safe and secure. Our members perform monthly inspections and maintain vacant properties. MBA members cut the grass, secure doors and windows, take efforts to avoid new damage to the property, winterize (when necessary), shut off utilities to avoid hazardous conditions and address certain other safety conditions. Servicers, however, are financially unable to make capital improvements to properties damaged or substantially altered by homeowners or vandals. The industry’s goal is to quickly move these properties into the hands of owners who can repair or rehab these properties. Servicers also post contact information on these secured properties in the event problems arise.

Vacant Property Actions

In response to the Vacant Property Registration Ordinances being enacted nationwide, MBA is suggesting utilizing the Mortgage Electronic Registration System (MERS®) database (http://www.mersinc.org/). MERS maintains a list of property preservation contacts as well as a list of MERS® servicers ID database. In the near future, MBA will be launching a demonstration of an enhanced registration system using MERS® designed as an alternative to state registration systems.