LA looks to address US foreclosure problem

Property investors looking to pick up bargain distressed real estate in the US market will be pleased to hear that officials in Los Angeles are cracking down on owners who let their homes fall into a state of disrepair.

The move will mean that financial institutions such as banks and mortgage companies which often seize properties could face fines of up to USD 100,000 if their assets are found to have been neglected.

It represents the city's attempt to manage the 27,000 neglected foreclosed homes which are lowering neighbouring real estate values.

However, the move has been criticised by the California Mortgage Bankers Association, which believes that regulation is not the answer.

"Lenders and banks have a vested interest in keeping up homes because the better condition the house is in, the more money they are going to recover when they sell that house," Dustin Hobbs, spokesman for the company, said.

Individuals interested in Florida property may want to consider looking for distressed real estate, with foreclosed homes making up at least a third of all purchases, RealtyTrac has revealed.

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