Posted by Kari on January 5, 2012 14:48
On January 3, Ohio Senator Sherrod Brown sent a letter to the Office of the Comptroller of the Currency asking the agency to review its rules about how banks should deal with homes abandoned before the foreclosure process begins.
In December, the OCC stated banks and lenders would be allowed to secure defaulted loans through liens, thus allowing them to hold onto the home and prevent the property from going into foreclosure.
However, Brown says this practice leaves abandoned homes in many neighborhoods, including in Ohio, in poor shape, in turn affecting an area's home values.
"This practice, also known as an 'abandoned foreclosure' or a 'bank walkaway,' has caused substantial harm to Ohio's communities and should not be supported by the federal government," Brown wrote in the letter.
He added that allowing these foreclosed properties to remain unattended to would likely be detrimental to the health of the housing markets and neighborhoods where the homes reside.
In 2010, the Government Accountability Office released a report stating many state and local governments were left to foot the maintenance bill of homes released of liens by banks and lenders. Some states have implemented laws that mandate banks and lenders maintain vacant homes.
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