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Banks, lenders face Aurora rule

Foreclosed, vacant properties must be maintained

By April M. Washington, Rocky Mountain News (Contact)

Published January 27, 2009 at 12:05 a.m.

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Banks and lenders will be required to maintain foreclosed and abandoned properties in Aurora or face fines under a measure passed by the City Council on Monday.

The ordinance, approved on a 5-3 vote, is aimed at addressing the growing number of foreclosed and vacant homes. Aurora has been hit hard by the housing crisis, reporting 6,400 foreclosures last year. That number is expected to grow.

"The homes sit vacant month after month, and either the lender or owner is not taking care of them," said Councilman Brad Pierce.

But it's unclear how much in fines or fees lenders eventually will pay if they fail to comply with the city's property standards.

The measure requires lenders to pay a yet-to-be-determined fee to register foreclosed properties. Lenders also must place foreclosed and abandoned properties on a monthly inspection list to ensure compliance with the city's property codes and standards.

Failure to register foreclosed homes with the city could result in a lien against the property and a fine of $200, but that amount is still up for debate.

Councilwoman Molly Markert cast a no vote. She argued it may cost the city more in resources and time to track down the actual owners of vacant and foreclosed properties because most loans have been sold off to investors.

Credit Union Association of Colorado spokesman Peter Kirchhof said the measure would force lenders to enter a home in foreclosure while someone is still living there, increasing banks' legal and financial exposure.

Councilman Bob FitzGerald, the measure's chief sponsor, insisted that the deed of trust allows lenders to enter a home to make sure it's not being damaged in any way while in foreclosure.

In other action, the City Council delayed action on a measure that would extend health care benefits to same-sex couples until Feb. 23.