Council reforms foreclosure process
The City Council passed a long overdue reform to city foreclosure process Wednesday that should allow it move more efficiently against 'zombie homes' and other derelict properties.
The council voted 4-0 with Commissioner Jo Ann Hardesty absent to remove the City Auditor's Office from the process. The ordinance, which was introduced by City Auditor Mary Hull Caballero, had been recommended in a 2012 performance audit of city's liens, collections, and foreclosure process.
The audit found too many agencies were involved in citing owners of problem properties and compelling them to either fix the up or face foreclosures.
The ordinance approved by the council transfers the existing foreclose staff in the auditor's office to the to the Revenue Division of the Bureau of Revenue of Financial Services, which currently collects late liens and fees on noncomplying properties, and processes foreclosures approved by the council.
Mayor Ted Wheeler and Commissioner Chloe Eudaly both said the city takes foreclosures very seriously and gives property owners many opportinity to fix them up before threatening foreclosure as a last resort.
""I know foreclosure is a hot button term, but it is a very rare action taken by the city. It's really used against property owners who are absentee or large institutions that are not taking responsibility for them," said Eudaly, who explained that neglected and abandoned properties are more than eyesores, but can be dangerous.
A multi-part investigation undertaken by the Portland Tribune in 2016 documented the problems caused by neglected and abandoned properties in Portland neighborhoods. It also highlighted the overly complex process for compelling owners to fix their properties or, in cases where they are abandoned, seizing them through foreclosing and selling them to more responsible owners.
The series prompted former Mayor Charlie Hales to convince the council to adopt some reforms in June 2016. But he did not propose removing the auditor's office from the process, despite the 2012 performance audit.
Even with the limited reach of Hales' reforms, the city significantly increased the number of foreclosures after they were enacted. No homes had been foreclosed on in previous decades, regardless of how many problems they were causing. But by last August, 68 properties had been proposed for foreclosure, and 17 had been approved by the council. The city had recovered $1.96 million on 44 of the properties, and many had been fixed up or replaced with new homes.
Hull Caballero predicts her proposed reforms will result in even more action.
"For the city, a streamlined process ensures that the broad expertise that exists in the Bureau of Revenue and Financial Services can benefit this program as well," said Hull Caballero.
The transfer could take several months to fully complete.
You can read a previous Portland Tribune story on the issue here.