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Focus on Foreclosures

Focus on Foreclosures. 22 nd Annual Fair Lending Conference Friday, October 26, 2012 Sally Martin, Housing Manager, City of South Euclid smartin@seuclid.com www.cityofsoutheuclid.com. Throughout the county, the number of rental properties is increasing at a rapid pace.

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Focus on Foreclosures

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  1. Focus on Foreclosures 22nd Annual Fair Lending Conference Friday, October 26, 2012 Sally Martin, Housing Manager, City of South Euclid smartin@seuclid.com www.cityofsoutheuclid.com

  2. Throughout the county, the number of rental properties is increasing at a rapid pace. Foreclosures have taken many families out of homeownership. Other qualified buyers are choosing to delay buying a home due to lack of confidence in the housing market. Demand for rental property is high, and is expected to remain high.

  3. It was the best of times… Investors view the housing crisis as an incredible opportunity. Homes are available in suburban communities for under $30,000. For a small investment in improvements, these homes can be rented for up to $1,200 per month, providing cash flow and a quick return on investment.

  4. And the worst of times… Many homeowners who find themselves forced to sell are becoming reluctant landlords with neither the experience nor the funding to make needed repairs and upgrades. City code enforcement departments must be prepared to manage the increase in rental properties by aggressively enforcing property maintenance codes that ensure the life, health, and safety of tenants.

  5. In South Euclid, there has been close to a 10% increase in the number of single family rental homes since the housing crisis began. Nearly 50% of vacant homes are becoming rental homes once they are reoccupied. 16% of South Euclid’s homes are now in the rental market.

  6. For more than a decade South Euclid has maintained a strong rental inspection program: Rental properties are registered annually for a $200 fee, and inspected inside and out every three years. Zero tolerance for late registration or failure to register: - $100 penalty for late registration. - $100 penalty for non-disclosure of rental status. - $100 if prosecution is required to force registration. - $500 to reinstate occupancy if revoked due to non-registration. Strong partnerships with CMHA, Parma Public Housing and the local school district to ensure registration and code compliance. Hotline for public to call to report suspected rental property.

  7. In March of 2010, South Euclid City Council passed legislation mandating the registration and inspection of vacant buildings. All vacant structures must be: - Registered - Inspected inside & out - Fully brought up to code before being reoccupied The process is similar to point of sale, but applies exclusively to vacant structures. Required escrow must be placed and violations assumed prior to property transfer. Prior to this ordinance, many vacant homes were becoming rentals with little or no improvements being made.

  8. This practice has stopped Since the implementation of the vacant building ordinance there has been a 63% increase in the valuation of residential construction projects.Close to half of all formerly vacant homes become rental homes. With the passage of this ordinance, we are confident that those new rental homes are safe for their occupants.

  9. Focus on Foreclosures 22nd Annual Fair Lending Conference Friday, October 26, 2012 Sally Martin, Housing Manager, City of South Euclid smartin@seuclid.com www.cityofsoutheuclid.com

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