Getting written up for munipal property code violations is a risk that should not be dismissed lightly. Image: Fotolia.
Getting written up for munipal property code violations is a risk that should not be dismissed lightly. Image: Fotolia.

Code violations are a slippery slope. If not careful your property might descend into lien oblivion, racking up enormous fines that create unwanted risk for investors.

In today’s environment the municipal wolves are circling properties in distress, seeking out the overgrown grass and unmaintained yard. Those municipalities whose financial woes have pushed them to the precipice of financial ruin regularly target the mortgage servicing industry.

Although little is done to sway these activities by the industry as a whole, investors are holding preservation companies more and more accountable. From large urban cities such as Chicago to small towns like Zanesville, Ohio, it is our civic leader’s responsibility to protect their constituency and uphold property values.

This unfortunately leads to heavy fines on bank owned properties that can cripple an assets value beyond reconciliation.

Community leaders are unconcerned over who the responsible entity is. Whether the prior mortgagor, the loan servicer or the bank, someone needs to accept responsibility and take action. Despite including all parties on legal notices, all too often over the past few years none of those parties have stepped forward.

This unfortunately portrays the mortgage servicing industry as a significant cause of neighborhood blight.

There are ways to minimize the types of risks associated with code violations. Investors must be aware of the pitfalls and use their preservation vendors as a resource towards prevention rather then reaction. The days of a vendor simply cutting the grass and completing a trash removal at the property are over. Today, investors must leverage the full resources of their preservation vendors to develop a new paradigm based on grass roots civic engagement.

Preventing violations from occurring and more importantly, quickly resolving those that do will build the necessary foundation for collaborative relationships with our community leaders.

The mortgage servicing industry, through their preservation vendors, can impact communities on a much greater scale, reduce liability and experience greater profits if the focus shifts towards this end. A favorable outlook from the local code boards on a national scale will help assuage millions of dollars of fines annually.

As professionals and neighbors we must always seek out what is best for the community and our business. Oftentimes these paths intertwine.

Perhaps I approach this matter with some naivete. Perhaps I believe in an industry where distressed properties can add value to a community. After all, we are not dealing with assets, we are not dealing with properties, these are homes and the sooner we figure that out, the sooner we can rebuild our communities.

Reid Schermer is a code compliance professional in the default servicing Industry.