Should Banks Pay $20K Per Foreclosure? Assemblyman Says ‘Yes’

LOS ANGELES (CBS/AP) — A San Fernando Valley state assemblyman says banks should cough up $20,000 every time they decide to foreclose on a home in California.

Assemblyman Bob Blumenfield (D-San Fernando Valley) released a fact sheet on Wednesday that says the bill would help make up for costs associated with foreclosures, such as property tax losses.

The money collected would be used for school districts, police and fire departments, small-business loans and other applications.

Amy Schur, who directs advocacy group Alliance of Californians for Community Empowerment, which is supporting the bill, says its language is currently being vetted by the legislature’s legal staff.

Blumenfield spokesman Anthony Matthews did not return a phone call.

A message was left with Mortgage Bankers Association spokesman John Mechem.

(TM and © Copyright 2010 CBS Local Media, a division of CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

  • bounce

    We could also make up for the deficit by charging everyone $50 every time they cross the street. That’d be just as idiotic.

    What loss from property taxes is there on a foreclosure? The property is still owned by the banks, they would be responsible for the property tax. And why do politicians always look for new taxes, fees and penalties instead of curbing spending?

  • eric

    If this happens, the cost would just be passed on to borrowers when they get the loan. This won’t stop the foreclosures and it may even increase profits to the loan companies because not everyone defaults.

  • twalshiii

    …because the wealthy are paying a small fraction of the taxes they paid in Reagan’s times. Less money coming in while more money is needed for wars and tax rebates for oil companies

  • steve

    So the bank can tact more fees for customers eventually that 20grand is going to have to come from somewhere and its not going to come from bank exc. pockets

  • Realist

    How About Bob Blumenfield Coughing Up Some Common Sense?? Jeez…It’s Hard To Believe That These Morons Get Elected To Represent Anyone Or Anything!!

  • Lee S T

    Why not charge illegals $2,000 to cross the border
    It’s what they pay smugglers
    12 million x $2000 =
    deficit moves to surplus!

    • Karen

      Bravo! But remember they did not want to pay when that was an idea to make illegals – legal.

      • Gold

        Not to make them legal
        $2000 per each year
        $6000 per each kid born here penalty

  • Tax Payer

    Lets tax Politicans a flat $ 20,000.00 a year for being professional hacks.
    Moocher Tax

  • drozone69

    Banks should pay the annual property tax,since they do legaly own it up until you make your last payment and officially recieve the deed or title to the parcel.I never could understand the aspect of property tax bieng ther responsability of the tenant.That is what you are until you make your last payment.If you dont make your payments,you will be out on the strrets just like an apartment renter.All a house does is constantly make money for the title holders (Banks).The American dream is out the window as far as home ownership goes.We arent building homes.We are building muti tenant giant apartment complexes,with rents so exorbarant,one will never have money for a down payment morgage.

  • Lee Fox

    First, democrats in the federal government force banks to make home loans to people they know can never pay them back and now California democrats want to penalize banks 20,000 dollars for each foreclosure they execute.

    Nevermind the tens or hundreds of thousands of dollars the banks are loosing on properties they are having to foreclose on.

    Again, the left demonstrates their anti-capitalist agenda.

  • Deborah Palmer

    I’m all for making the big banks pay but I don’t think it’s a good idea to give incentive to the State to encourage foreclosure. Yes the fee would discourage banks from foreclosing but perhaps the counties should go after MERS for evading county filing fees instead.

  • Patricia Williams

    How about making the Banks accountable for their criminal actions in fraudulent foreclosures. Taking our tax dollars to foreclose on tax payers instead of working with the tax payer? Did you ever stop to think why are they not working with the people? Well it is because they get 80% of the original loan every time they foreclose. Yes the FDIC pays them with our tax dollars. Then they get paid again when they sell the home again. Funny that the tax payers dollars help the banks and not the very people that gave their tax dollars all their lives. Rotten homeowners who paid their tax dollars and then lost work in this economy. Shouldn’t our tax dollars help the people before the banks??? Something to think about.

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