'Green lien' plan would keep water flowing at foreclosed homes

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An inland California water district is hoping a "green lien" will help it combat the blight caused by abandoned and repossessed homes.Elsinore Valley Municipal Water District's proposed "green lien" program would allow lenders and owners of repossessed properties to agree to a tax lien on the homes to keep the water meters turned on. This would allow the property owners to continue to water the lawns until the home is sold.The lien would be voluntary, and the district would recoup the cost of the water before the home is sold.The district will discuss the proposal at a meeting later this month.Elsinore Valley, regional and state water-agency officials said the program is unprecedented."We understand the impact of the foreclosure crisis. The city, the water district and the lenders are all trying to address the issue," Elsinore Valley spokesman Greg Morrison said. "This is a way we thought we could help."Other area agencies are exploring ways to ensure the homes are maintained. The cities of Lake Elsinore, Temecula and Murrieta all have ordinances that require lenders to register abandoned properties.Lake Elsinore is considering using its water truck to douse brown lawns in the city limits. Elsinore Valley would supply the city with the recycled water.Elsinore Valley's proposal comes at a time when more than 1,000 homes in the district's boundaries are in the process of foreclosure, according to foreclosure-tracking company RealtyTrac. Hundreds of homes are already vacant and have the telltale signs of a foreclosed property -- dying lawns.A cluster of brown lawns can lower property values in a neighborhood, be a magnet for crime and make homes harder to sell, local real-estate officials said."Those brown lawns are a big sign that says 'Nobody's here, do what you want,' " said Gene Wunderlich, chairman of the Southwest Riverside County Association of Realtors.Wunderlich said he had never heard of the "green lien" concept, but said he thinks it would be applauded by people with a vested interest in the homes, such as real-estate agents and neighbors."The bank that owns it may be in Vermont; they may not care what goes on," Wunderlich said. "But if you have a neighbor who doesn't want his property value to drop, or a real-estate agent who has the listing, these people may want to just pull out a hose and keep that lawn from dying."Water agencies statewide have been negatively affected by the record number of foreclosures, regional and state water officials said.Most water agencies finance major system improvements by selling bonds that are paid by homeowners through a community facilities district tax. When homeowners default on mortgage payments, they also default on the tax.This can lower the district's creditworthiness and result in higher interest rates for future borrowing, leading to more costly projects, the cost of which is borne by the ratepayers. Elsinore Valley avoided this by buying back and reissuing its bonds.Metropolitan Water District of Southern California and the Association of California Water Agencies officials said they had not heard of any water agencies using "green liens" during the foreclosure crisis."It sounds very interesting; I'm intrigued," said Krista Clark, the water agencies' director of regulatory affairs.Elsinore Valley board member Phil Williams is credited with coming up with the idea about six months ago. He said district officials wanted to make sure it was a legal method before they brought it to the board for discussion.Morrison said he expects most real-estate agents and lenders would be in favor of the program."A pleasing-looking home will sell much quicker," he said.(E-mail Aaron Burgin at aburgin(at)PE.com.)(Distributed by Scripps Howard News Service, www.scrippsnews.com.)