Sunday, May 03, 2009
The foreclosure of thousands of homes during the economic crisis has left bank headquarters across the country confronted by the long arm of the law from the West Coast. In Indio, CA, local law enforcement has threatened Citigroup officials in St. Louis, MO, with fines and jail time if they don’t take care of the many repossessed homes scattered across the desert town of 81,000. The housing crash has been especially hard on Indio, which saw its population balloon from 49,000 in just a few years because of easy lending by banks. Now, approximately 10% of Indio’s homes are either in default or foreclosure.
City officials say they had to go after banks to keep neighborhoods from becoming “dust bowls,” as vacant homes fell into disrepair, which only further depresses local housing markets.
Indio isn’t the only California town taking a hard line with out-of-state banks. Chula Vista, Palm Springs, Desert Hot Springs and Cathedral City have adopted ordinances requiring lenders to maintain homes and landscaping or else face fines, some as much as $1,000 a day. “These lenders speak one language—money,” Doug Leeper, Chula Vista’s code-enforcement manager, told the Wall Street Journal. The town so far has issued $1.4 million in fines against banks, collecting about half.
-Noel Brinkerhoff
Banker: 'What'd I Do Wrong, Officer?' Cop: 'You've Got Algae in the Pool, Sir' (by Nicholas Casely, Wall Street Journal)
America's Most Foreclosure-Ridden Towns (by Matt Woolsey, Forbes)
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