The lust for more money is the bane of both state and local governments. During the boom times they added every perk they could to make themselves re-electable. Now that tax revenue is down, they are looking under every rock and crevice to find new revenue to pay for all the pork and excess they have created.

California is a great example. The target is properties that have been foreclosed upon. The taxpayers can vote da bums out of office, so they can not be hit up for more taxes in an obvious way, so the cities are going after the mortgage companies. Every one hates them, right?

In June, California Gov. Arnold Schwarzenegger signed a bill that lets local governments in the state impose a $1,000-a-day fine on financial institutions that fail to maintain vacant properties if problems aren’t fixed within 14 days. The new law allows cities “to go in, abate the problem and tack [the cost] on to the tax bill” without having to enact a local ordinance, said California state Sen. Don Perata, the bill’s sponsor.

Chula Vista, Calif., went a step further last fall by requiring that mortgage companies register and take responsibility for vacant homes even if a property hasn’t yet been the subject of a foreclosure action. The program is designed to keep vacant homes from falling into “a black hole” between delinquency and foreclosure, said Chula Vista’s code-enforcement manager, Doug Leeper, who drafted the measure.

Under the program, property owners can face fines as high as $1,000 a day if a vacant home is improperly maintained; unpaid levies are tacked on to the lender’s property-tax bill. Chula Vista already has imposed $296,000 in fines and penalties, Mr. Leeper said. He said he has fielded inquiries about the program from about 250 communities in Arizona, California, Colorado Florida, Illinois, Missouri, Oregon and Tennessee. via  WSJ.com

So now the mortgaged companies have to understand a myriad of local laws that can add some significant costs to maintaining the foreclosure, and that will be tacked on to the tax bill. It is not even as if the cities have to chase down the money. If the money is not there, they sell the home for failure to pay taxes, not failure to pay excessive fees.

My question is will the cities take care of the properties they own as well as they expect the mortgage companies to take care of foreclosures? I doubt it.

Related posts:

1. Half Of Housing Grant Money Goes Towards Foreclosure Purchases
2. Ford Foundations Creates New 50 Million Dollar Forclosure Fund
3. South Carolina Blocks Foreclosures Until Housing Plan Enacted
4. “Making Home Affordable” Website Now Live – Governments Initiative To Help Homeowners in Trouble
5. Mortimer Zuckerman Loses 165 Million On 3 Rental Properties – And You Think You Have It Tough