The National Mortgage Servicing Association (NMSA) yesterday 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. The report was developed with input from several NMSA member organizations including Wells Fargo, Bank of America, BankUnited, Selene Finance and others.

The report draws attention to the problems that vacant and abandoned properties cause for communities and proposes specific policy changes that the group said will benefit the consumer. Under the current laws, many of these properties are forced to go through the same extensive foreclosure process as occupied homes, resulting in a lengthy period of vacancy, during which the home may fall into disrepair, attract crime and bring down property values in the surrounding area.

Ed Delgado, president and CEO of the Five Star Institute and ex-officio of the NMSA, 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.

“The concerns presented by the proliferation of vacant and abandoned residential properties are, at their core, consumer protection issues,” Delgado wrote in the letter. “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.”

Though some individual states have proposed solutions to remedy the blight caused by vacant and abandoned housing, these have yet to be effective, according to the report.

“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.”

Click here to read the report in full.

NMSA Calls For Standardized Treatment Of Vacant Properties

by Banker & Tradesman time to read: 1 min