The housing market collapse that bottomed out in 2009 led to thousands of properties in Duval County being in foreclosure.
The mortgage foreclosure crisis created a blight issue, since houses vacated by their owners often are not properly maintained. That can depress values for properties in the area and create safety, public health and crime issues.
The blight issue created a new business for a group of former mortgage bankers who were displaced from their careers when the real estate bubble burst.
They started a business that documents vacant properties as a way to ensure those in possession of the properties don’t ignore them.
Since December 2010, Melbourne-based Community Champions has documented more than 28,000 active foreclosures in Duval County for a fee of $150 per property. The firm shares 50 percent of the fee and has given $2.7 million to the city since the program began, said Tom Darnell, Community Champions managing director.
To date, $1.5 million from the fund has been spent, appropriated or is encumbered.
Municipal code says the funds can be used for code enforcement and mitigation related to blighted and deteriorating foreclosed properties that were owner-occupied. Other uses allowed under the code include housing counseling and foreclosure intervention, such as cash and mortgage modification assistance limited to owner-occupants who are in default.
Authority to collect the fee and contract for the registry was created in 2010 with the enactment of a city ordinance. The intent is to identify or locate owners or foreclosing parties who can correct negative impacts of abandoned property and address aesthetic and safety concerns.
The concept for Community Champions is based on similar vacant property registries of abandoned commercial buildings in Rust Belt states. The firm works with 61 communities in five states, Darnell said.
Each market is researched and foreclosure data is collected from lenders as well as municipal property appraisers and tax collectors. Each record is evaluated in order to provide accurate information about the foreclosures in each market.
“We’re very hands-on and we maintain a chain of evidence for property record,” said Darnell. “It’s not the end-all tool, but there’s nothing like having as good point of contact with the bank or the property manager to ensure a property is maintained.”
Educating lenders about the benefits of establishing vacant property registries was a challenge for Community Champions in the beginning, Darnell said, but when the programs went into operation, attitudes changed.
“At first, the banks looked at us as the bad guys,” said Darnell, “But within a year, they made a turnaround and now they recommend our services. All sides see us as a resource.”
Foreclosures also create opportunities for redevelopment. Community Champions, in partnership with Community Development Coalition Corp., has reinvested about $1 million to renovate six homes and a commercial property in Springfield.
Darnell said his firm provides financing at a nominal interest rate and forgives the loan until the property is sold.
He said opportunities for local redevelopment will continue to be available, despite the gradual recovery of the housing market.
“Jacksonville still has one of the largest vacant property issues in Florida,” he said.
@DRMaxDowntown
9904) 356-2466