Wall Street Journal (07/29/08) P. A3; Simon, Ruth
Mortgage lenders, already struggling to manage a jump in foreclosures, are being hit by fees and penalties from municipalities for maintenance of vacant properties. Fitch Inc. managing director Diane Pendley says the fees--which are intended to minimize blight--can be as high as $500 for each registered foreclosure and sometimes more than $700 per year, with some penalties set as high as $1,000 per day. As a result of the added costs, investors in mortgage-backed securities are seeing a drop in returns. While some local government officials say it is difficult for them to get lenders to take responsibility for vacant homes, the Mortgage Bankers Association insists that lenders are committed to handling maintenance tasks.
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