How to deal with banks that won’t officially foreclose on subprime houses

In more and more metropolitan subprime-loan ground zeros in America, stuff like this is happening.

With individual subprime loans resliced and rediced three or four times on their way “upstream” to the ultimate securitization spawning grounds of a multibillion dollar CDO, cities can’t even find the bank, or other fiscal agency, actually holding the note when a person or family defaults on a mortgage.

It’s very interesting, though, that somebody knows exactly when to notify the mortgage holder, even if that same “somebody” is mysteriously absent when it comes time to take legal possession of the property.

My solution?

Cities should start being as aggressive as hell on condemnation proceedings. On houses with pools, there’s multiple health and safety grounds for doing so — mosquito breeding sites, potentials for children drowning, etc. Even in houses without pools, child safety of neighbor children getting hurt, plus the broader public safety issue of long-vacated houses being potential crack houses or other crime shacks, make condemnation a readily viable option.

So, here’s what all our major cities and suburbs should do.

Pass an ordinance, per city codes and various state laws, that say a house abandoned for threat of foreclosure, or appearance of imminent foreclosure, or other dotting of i's and crossing of t’s, which is not actually foreclosed upon in 60 days, and suitably maintained after that, automatically becomes subject to condemnation proceedings.

Banks, mortgage brokers, etc., know that even 1/3 a loaf is better than none. They’ll get their asses in gear.

Especially if there’s any way to combine that with extra fines against egregious repeat violators.