(NMSA) has issued a report calling on all federal agencies to work together in conjunction with the mortgage servicing community to institute policies that standardize the procedures, definitions, and best practices surrounding the treatment of vacant and abandoned residential properties, which, according to the report, “hurt communities and families.”
The NMSA issued a report on Thursday, calling for an industry-wide discussion policies that would standardize procedures, definitions, and industry best practices for vacant and abandoned properties. Under current law, many abandoned properties are subject to the same lengthy foreclosure process as occupied ones, resulting in extended vacancy and other considerable problems. The report was in part developed with input from several NMSA member organizations including Wells Fargo, Bank of America, BankUnited, Selene Finance, and others.
“The concerns presented by the proliferation of vacant and abandoned residential properties are, at their core, consumer protection issues,” said Ed Delgado, President and CEO of the Five Star Institute and Ex-Officio of the NMSA. “These properties can potentially have a devastating effect on surrounding communities because they often become magnets for vandalism, squatting, and violent crime. In extreme cases, these properties have even led to the tragic loss of life. Surrounding properties can expect to experience a loss of value—a significant detriment to the primary source of wealth for many American families.”
“Vacant and abandoned properties is a complex and difficult issue that is detrimental to surrounding homeowners and communities,” said BankUnited EVP and NMSA Chairman Ray Barbone. “The issue is evidenced by recent legislation in Ohio and Maryland. However, the industry remains challenged in protecting those impacted due to inconsistent and disparate definitions and guidelines relative to such properties. The NMSA hopes that this proposal for standardization of procedure, definition and best practices is a catalyst for dialogue that leads to the development of an effective approach to dealing with the issue of vacant and abandoned properties across the country.”
Though some individual states have proposed solutions to remedy the blight caused by vacant and abandoned housing, these have yet to be effective. “There is a disconnect between state and local governments that prevents clear lines of communication and a mutual understanding of the depth and breadth of the issue, thereby causing uneven treatment and disparate results,” the report argues. “In the end, consumers and the communities are the ones who suffer.”
Delgado outlined the problem in a letter addressed to the leadership of HUD, CFPB, the U.S. Department of the Treasury, OCC, Fannie Mae, and Freddie Mac. Delgado hopes the report will spur inter-agency dialogue to address the ever-growing problems that vacant and abandoned properties pose.
“The NMSA is ready to partner with all federal agencies in the development of common sense solutions that alleviate the tremendous strain that vacant and abandoned properties place on our communities,” he wrote.
The National Mortgage Servicing Association is a nonpartisan organization driven by top level executive representation from the nation’s leading mortgage servicing organizations for the purpose of effecting progress and change on the key challenges that face the mortgage servicing industry. By bringing together decision making executives from across the nation, the NMSA drives the conversation on shaping the American housing industry for the benefit of homeowners.