When corporations were given the same rights as individuals, they should have also been given the same responsibilities. Things that citizens are required to do should now be a requirement of banks. Housing standards that are upheld by state law should include houses that are bank-owned.
The question really should be, why can't foreclosed properties be maintained properly after the bank forecloses? Owners of mortgages that foreclose have a "sell it as fast as your can" mentality, but that is often not the case, as less homes are being sold, nationwide. But, what do they care? If they can't sell the property, they still can put a lien on the original mortgage holder.
If a lender or another financial institution forecloses on a property that has sustained damage, or is hazardous in any other way, they should have to pay, because they have assumed all of the responsibilities of owning that property, just as it was the responsibility of whoever owned it before. Furthermore, repairs usually make a property more valuable and more salable.
As professional institutions, I do believe that lenders should be held to higher standards, when it comes to maintaining properties that they acquire through foreclosures.
These financial institutions had the opportunity to prevent this situation from even happening. But, in their greed, they chose to offer loans so that people could buy homes that they really could not afford. While I will not argue that homes that are damaged by those who are unhappy about their situation are the fault of the lenders, to some degree, these banks have only themselves to blame for having so many foreclosed properties on their hands, in the first place. Secondly, given the fact that they are finally making it more difficult to get a loan, they will find it more difficult to sell the homes they have. Unoccupied homes are prone to deteriorate and attract break-ins and damage from the homeless and others. They would seem to have a choice. And, if they want to recoup their lost money, they will need to repair the property, or else sell it as-is at a possible loss.
A person might buy a home because it is inexpensive. However, the house could be filled with hazards and damaged materials. Families with small children buy these homes thinking they are safe and they are not. I think banks should consider paying for repairs in foreclosed homes. I would rather see safe homes than cheap homes.
Lenders need to be responsible for the properties they own, rather than simply treating them as a commodity. These "commodities" are there for the purpose of housing businesses and families. They are not simply an asset. They affect the lives of people around them. As the owners, they should take the responsibility of caring for these properties.
Lenders and other financial institutions that end up owning mortgages should pay for repairs to dilapidated or hazardous foreclosed properties because they are the legal owners of those properties. They can choose to sell dilapidated properties at a reduced price, or repair those properties, because they are the legal owners.
Because various financial institutions recklessly loaned money to people who would not normally qualify for mortgage loans, they have a responsibility to fix what they created. If people are foreclosing on their homes, it is only because they were encouraged into making a "great investment" in the first place. Those who can afford to buy homes now should not have to pay the penalty of fixing up homes that have been allowed to run down.
Financial organizations have responsibilities that go along with their ownership. They approved the property when they assumed the mortgage and were more than happy to take it back. If I received property in need of repair I would be liable for repairs and could not bill the seller. Bankers always talk about their taking risks, let them pay the price of taking a risk just as normal citizens do.
People are very quick to stop paying their bills and don't expect to have any recourse against them. I work for a small Community Bank that is very conservative in it's lending practices but we have had very large hits to our bottom line when we have to take a property back. I think everyone likes to assume that we get properties back in perfect condition and with thousands of dollars in equity. Quite frankly, it is the complete opposite. The house has been left in conditions not suitable for wild animals to live in let alone a human. Guess what, the bank is left holding the bag on the damages or repairs required to sell the house. How is that helping the economy?
Mortgage lenders went to the extreme in granting loans to just about everyone a few years ago. They also got many people to get into variable rate loans that ended up increasing quickly, leaving some clients unable to pay for their loans. The lenders are somewhat at fault. But, overall, the responsibility lies in the person who purchased the loan and defaulted. There would be no criteria for when a person should get help, if lenders were forced to pay. There would also be no true responsibility when applying for a loan.