Home foreclosures aren’t as common as they were at the height of the banking crisis in 2010, but they haven’t gone away entirely. The national foreclosure rate has dropped almost to what it was before the 2008 market crash, according to CoreLogic, a company that monitors the mortgage industry.
The foreclosure rate, which is the share of all loans in the foreclosure process, fell to 1 percent in December 2016, down from a high of 3.6 percent recorded in January 2011. The December 2016 foreclosure rate is just slightly above the pre-housing-crisis average foreclosure rate of 0.6 percent between 2000 and 2006, CoreLogic reports.
The real estate website Zillow.com shows eight foreclosed homes in Agoura Hills, Westlake Village, Calabasas and Oak Park. In the same four cities, however, there are 75 homes in pre-foreclosure, meaning notices have been issued to the owners that if payments are not made the lender will foreclose on the property.
The process can be drawn out, with families still living in homes they don’t own while legal notices shuffle between banks and courts. In the meantime, homes and properties can fall into disrepair. And with no clear owner to keep up on maintenance, some homes become neighborhood eyesores.
One foreclosed home in Agoura Hills remains a problem child. Ken Handler, who lives on Vista del Arroyo, has spent two years trying to get city and county officials to do something about the deteriorating condition of a single-family home three doors down from him.
“I was inside the house a few months ago, just to see what was going on. It was just horrible. You have a terribly rotting house, inside and out. It’s weed-infested,” Handler said. “The trees are overgrown, but the main problem as I see it is we’re in the middle of a huge fire hazard area. We’re in kind of a high-end area; the homes are $2 (million) to $3 million, so there’s a lot at stake, that’s why I’m upset.”
Handler said the house was occupied by a family that didn’t pay its mortgage and was eventually evicted by the sheriff.
The Joiner Group, a mortgage lender, holds the deed to the house. Bill Joiner, a group agent, said he’s aware of the issue Handler has been raising but has no real authority to do anything about it.
“It’s a judicial foreclosure, so the title doesn’t pass to us as the lender for 12 months, so it’s in abeyance currently, whereby we don’t have formal title until that one-year period expires,” Joiner said. “We want to be . . . neighborly to the neighbors, but on the other side we don’t really have the full legal ability to just go in and do what we ordinarily would do in our best interest, which is improve the property and put it up for sale.”
In California, lenders have two options: a judicial foreclosure and a nonjudicial foreclosure away from courts in which the property can immediately be sold off to pay off the balance of the loan. Joiner said his company is only three months into the one-year redemption period, meaning that if in the next nine months the previous owners pay off the amount they were delinquent, the home will return to them. Joiner said it’s because of this that he’s declined to invest any money in improving the property.
“If we were to put $100,000 into the property to improve it, we still can’t resell it (yet),” Joiner said. “If the previous owner pays their debt, they’d get the property with all the improvements we made and we’d have no way to recapture the money we spent. It’s not an unreasonable argument that the property looks like it hasn’t been kept up—it hasn’t, but the law doesn’t allow us that luxury right now.”
Steven Frasher, who works for the Los Angeles County Department of Public Works, said properties are expected to be maintained and secured to a minimum standard, meaning they shouldn’t be overcome by garbage and unruly landscape. In instances where homes are not up to the county standard, a notice is issued for the responsible party to take care of the matter.
“It doesn’t have to be nicely landscaped, but it can’t be completely overgrown and littered, things like that,” Frasher said. “In the event that a property owner or responsible party fails to abide by a directive to clean up, then the county would clean it up for them or secure the property, and the cost is billed to the owner.”
The previous tenant can waive their right to redemption, an option Joiner is pursuing, but if the tenant declines, Joiner and Handler alike will have to wait the better part of a year before steps can be taken to fix up the property.