Protesters rally against foreclosures on Puerto Rican families affected by Hurricane Maria, outside the offices of TPG Capital, Dec. 20, 2017 in New York City. The activists claims that TPG Capital's mortgage service companies are aggressively foreclosing on families in Puerto Rico after many people were displaced from their homes following Hurricane Maria. Drew Angerer/Getty Images
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Listener Timothy Tyckoson from Deltona, Florida asked Marketplace this question:
With the news of thousands of people leaving their homes in Puerto Rico, I was wondering what really legally happens to their abandoned homes? Do they retain their ownership or is it forfeited?
By the end of November, more than 208,000 people made their way from the Hurricane-ravaged island of Puerto Rico to Florida. As many as 750,000 people are expected to leave Puerto Rico over the next four years. Many of them left— and will leave— their homes behind.
What will happen to the houses left behind depends on whether the house has been paid off or whether the owners are still making mortgage payments. If the house still has a mortgage and payments on that mortgage are not being made, then the home will be foreclosed on, according to Ricardo Ramos-González, coordinator of a consumer legal aid clinic at the University of Puerto Rico School of Law.
“Any abandoned property that has a mortgage will be subject to a judicial foreclosure process. Until then, the ownership will be retained by its lawful owners,” he said. “Then if they are finally foreclosed, it will become a real estate owned (REO) property of the particular bank. There is no special process to deal with that situation.”
The real fall out from Hurricane Maria, which made landfall on Sept. 20, has yet to be determined. After the Hurricane passed, banks and the federal government imposed a three-month moratorium during which foreclosures, late fees and credit scores reporting was suspended. While banks have ended their moratorium this month, the federal government has extended its moratorium until March.
Even before some of the moratoriums came to an end, there was widespread confusion about who qualified. Some homeowners assumed that moratoriums were extended to everyone. They were not.
More than 20,500 people who received moratoriums from Bank Popular— Puerto Rico’s largest bank— saw them expire in December and January. The bank is now ready to start collecting payments again, even if some parts of the island are still without power, thousands of people have lost their jobs and about 30 percent of small- and medium-sized businesses are still closed.
“Those clients that truly are not responding to the bank’s letters are those who really will be at risk of facing a foreclosure,” Jose Teruel, first vice president of the consumer credit services division at Banco Popular, told the Associated Press.
Threat of foreclosure is nothing new for many Puerto Ricans.
Even before Hurricane Maria made landfall, Puerto Rico was facing a foreclosure crisis. The island had a mortgage delinquency rate that was three times the national average. About 33,000 homes were foreclosed from 2009 to 2016. In 2016, a record high of 5,424 homes were foreclosed, according to NBC. On an island with 3.4 million people, an average of 14 families were losing their home every day to foreclosures.
“The foreclosure problem that Puerto Rico has experienced over the past few years is actually worse than what we saw during the height of the foreclosure crisis nationwide,” Daren Blomquist, senior vice president with Attom Data solutions, a U.S. housing data provider, told NBC in June.
Then came Hurricane Maria.
Hurricane Maria was not the only storm to leave a wake of damaged and abandoned properties in its wake last year. By the end of 2017, there were 142,700 severely delinquent loans linked to last year’s storms— 102,500 in Florida and Georgia are attributed to Hurricane Irma while another 40,200 in Texas are said to be result of Hurricane Harvey, according to Black Knight, a financial data firm that collects and monitors monthly mortgage data. These delinquent loans represent 20 percent of all such delinquencies nationwide.
These numbers have been climbing every month since the storms hit. That should not be a surprise considering that according to Black Knight as many as 4.8 million mortgaged properties were in the path of Hurricanes Harvey, Irma and Maria. Their unpaid principal balance was nearly $746 billion, CNN reported in November.
However, not all homes that have been left behind come with a mortgage. Some have already been paid off. In that case, its owners would still be required to pay local property taxes even if the home sits empty. What happens when owners do not pay their property taxes can differ from state to state.
The most relevant case study here would be what happened in Louisiana after Hurricane Katrina. It’s been over 12 years since the storm hit, yet many homes remain abandoned and damaged. These houses are often referred to as “blighted.” One of the reasons why the local government struggled to deal with these properties is because it actually cannot just seize themand sell them off.
“Before the city can sell a tax-delinquent property, state law requires the public and all owners to be notified and mandates waiting periods of up to three years. During that time, an owner could get back in the game by making a minimal tax payment,” according to aReuters’ 2015 reporton the 10 anniversary of the storm.
If the house is not tax-delinquent, the officials would have to track down the owner and try to purchase the house. Many of the blighted houses in New Orleans that had been paid off were passed down from generation to generation. Some of them are now owned by multiple heirs. The New Orleans Redevelopment Authority has been tracking down owners in an effort to purchase the homes from them and sell them at auctions or to neighbors interested in expanding their property.
It is too early to tell if a similar situation might occur in Puerto Rico.
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There is undoubtedly a history of what is commonly referred to as “illegal” home building, although known as “rescuing” land by those who have engaged in the practice. Because of their lack of resources, many Puerto Ricans in the past have taken to building homes on vacant land—whether they own it or not.What will happen to an abandoned house? ›
Local governments will seize properties that have been vacated and left unoccupied for a long time and tend to attract undesirable attention. There are two terms when it comes to abandoned properties: Distressed property, this is a home in a bad condition due to financial problems, or just plain neglect.Is Puerto Rico rebuilt yet? ›
Again. Puerto Rico's infrastructure, like the hospital on Vieques, was never fully rebuilt after Hurricane Maria. Though more than $20 billion was committed to Puerto Rico's recovery, only a fraction of that has been spent on actual recovery projects. This program aired on October 26, 2022.Why are people buying property in Puerto Rico? ›
Why is it so attractive for US mainlanders to buy property in Puerto Rico? Act 20 and Act 22 (now collectively known as Act 60) are tax incentives for U.S. mainlanders to lure them into investing in and taking residency in Puerto Rico.What is the poorest place in Puerto Rico? ›
Puerto Rico municipalities ranked by per capita income.
|Per capita income (2017)||$24,264|
|Median household income (2017)||$34,060|
America's island territories are shrinking.
|U.S. Virgin Islands||−18.1% −18.1% −18.1%|
|Puerto Rico||−11.8% −11.8% −11.8%|
|American Samoa||−10.5% −10.5% −10.5%|
The answer is yes, you can. However, purchasing an unoccupied and abandoned property may not be as straight forward as purchasing an occupied residential or commercial property.Is Buying Abandoned property worth it? ›
The major draw to an abandoned home is buying the home well below market value. Whether you're buying the property to flip or to live in, you'll likely be able to save a substantial amount of money buying an abandoned home compared to a standard home on the market.Can you claim empty property? ›
If your property has been empty for two years or over you will be able to claim a VAT reduction on the cost of returning it to residential use.Why is Puerto Rico so run down? ›
The debate over Puerto Rico's statehood remains as relevant as ever, as the island struggles with the combined effects of economic depression, shrinking population, debt crisis and bankruptcy, natural disasters, the COVID-19 pandemic, and government mismanagement.
A subsequent nonbinding referendum was held on November 3, 2020, to decide whether Puerto Rico should become a state. Statehood won the vote 52.52%–47.48%. On December 15, 2022, H.R. 8393 (the Puerto Rico Status Act) passed the House of Representatives in a 233-191 vote with 11 absences.Are Puerto Ricans moving back to Puerto Rico? ›
But recently, there's been a wave of younger Puerto Ricans, including many who are second generation, repatriating. Throughout history, families and individuals who are seeking job opportunities or wish to reunite with loved ones have moved stateside.Why are houses so cheap in Puerto Rico? ›
Right now Puerto Rico is in a debt crisis which has caused real estate prices to fall. In some cases, they are 25% to 30% lower than they have been in over a decade!Why would the US want Puerto Rico? ›
The strategic value of Puerto Rico for the United States at the end of the nineteenth century centered in economic and military interests. The island's value to US policy makers was as an outlet for excess manufactured goods, as well as a key naval station in the Caribbean.Why do the rich move to Puerto Rico? ›
Bitcoin millionaires are moving to Puerto Rico for lower taxes and island living. Bitcoin enthusiasts are flocking to Puerto Rico, thanks to tax breaks and an island lifestyle. As the community grows, it's attracting more newcomers from the states as well as curious locals. But not everybody's happy about the influx.What is the blackest part of Puerto Rico? ›
Loíza is Puerto Rico's center for African-inspired traditions and it retains one of the largest Black populations on the island; more than 60 percent of its 30,000 residents identify as Black.What is the safest place in Puerto Rico? ›
San Juan is the safest city for tourists in Puerto Rico. Although there are some dangerous areas, it features extensive public transportation, some of the best attractions in Puerto Rico, and beautiful beaches. Taking common precautions should be enough to stay safe.Is Puerto Rico in a crisis? ›
Puerto Rico and its more than 3.5 million residents are in crisis.Does Puerto Rico want to be its own country? ›
The following table summarizes the results of Puerto Rico's plebiscites so far. In the 2012 Puerto Rican status referendum, 54.0% of voters indicated "No" to maintaining the current political status. A full 61.1% of voters chose statehood, 33.3% chose free association, and 5.6% chose independence.How many Puerto Ricans are left? ›
|Puerto Rico (2019)||3,193,694|
|United States (2019)||5,828,706|
|U.S. Virgin Islands (2010)||10,981|
|Dominican Republic (2015)||6,083|
|Vacant Homes ( (% of total homes)||13.6%|
The study by LendingTree ranked the nation's 50 states by their shares of unoccupied homes. The highest vacancy rates were found in Vermont, Maine and Alaska. Each state has between 20% and 22% of its housing stock vacant. The three states combined are home to more than 315,000 unoccupied units.What is Puerto Rico struggling with? ›
The debate over Puerto Rico's statehood remains as relevant as ever, as the island struggles with the combined effects of economic depression, shrinking population, debt crisis and bankruptcy, natural disasters, the COVID-19 pandemic, and government mismanagement.Why does Puerto Rico have so many natural disasters? ›
Rapid urbanization that occurred during past decades has drastically covered Puerto Rico's watersheds with impervious surfaces. As a result, there are thousands of people living in flood-prone areas. Landslide hazards are also a growing concern in Puerto Rico.Who owns the abandoned Titanic mansion? ›
At 33.85 acres (13.70 ha) according to Montgomery County Board of Assessment data, Lynnewood Hall is owned by the First Korean Church of New York which acquired the property in 1996.Where is America's largest abandoned city? ›
California City is the largest abandoned city in America.What US city has the most abandoned houses? ›
The three most vacant cities in the U.S. are all in Florida: Orlando, Miami, and Tampa. These cities are known for tourism and vacation homes, which means houses sit vacant for much of the year. More than 16 million housing units in the U.S. are vacant, bringing the overall vacancy rate to 11.6%.