A California lawmaker wants to stem the rate of home foreclosures in his state by requiring banks to pay $20,000 every time they seize a property.

 

Democratic Assemblyman Bob Blumenfield, author of the Foreclosure Mitigation Fee (AB 935), proposed $20,000 because that’s about the estimated cost of each foreclosed home on local governments, which lose valuable property taxes and have to cover property maintenance, inspections and increased police services when homes are reclaimed by the bank.

 

Proponents say the legislation would raise $12 billion over the next two years, which would go entirely to local communities now burdened with foreclosure costs.

 

It is estimated that more than 1.2 million Californians have lost their homes since 2008. That figure is expected to eclipse two million by the end of 2012.

-Noel Brinkerhoff

 

Banks Should Pay for Foreclosures (by Peter Dreier, Los Angeles Daily News)

To Deter Foreclosures, California Weighs New Fee (by Robbie Whelan, Wall Street Journal)