City Collects Bonds on Vacant Properties
Industry Update
October 5, 2015
WARREN – The city has collected an estimated $610,000 in bonds and another $12,950 in registration fees from banks and other mortgage holders that have local properties in foreclosure.
The bonds and registration fees are being collected as a result of a 2013 law passed by city council that requires companies filing foreclosures to pay registration fees of $100 for each vacant property and a $10,000 bond.
There have been 129 residential properties registered at $100 and one at $50, according to David Griffing, city auditor. There have been 61 bonds paid at $10,000 each.
The goal of the program has been to encourage owners of vacant properties in foreclosure to maintain them, according to Councilman Eddie Colbert, D-7th Ward. Maintenance of the properties includes basic landscaping, making sure all of the doors and windows are secured, and making necessary repairs.
“My goal in introducing this legislation was to prevent properties from falling into disrepair, lowering their value and the value of properties around them,” said Colbert, who pushed to get the law passed. “We are trying to save neighborhoods.”
Safety Service Director Enzo Cantalamessa said the city’s program is working because it has a good working relationship with the Trumbull County Clerk of Courts.
“Whenever a new foreclosure is filed, we are notified,” Cantalamessa said. “I notify the health department, which identifies whether the property is vacant or occupied.”
The property owner and/or the company holding the mortgage is contacted and informed about the law.
While the city has collected hundreds of thousands of dollars in bonds, Deputy Health Commissioner Bob Pinti said it has not been forced to use any of the bond money to make repairs or to do lawn maintenance.
“Banks and other lending institutions, especially the national ones, have been very responsive and responsible,” Pinti said. “The national companies are more accustomed to this type of law than are local banks.”
Companies like U.S. Bank, PNC, Bank of America and others have not had to be coaxed to follow the law.
“They have representatives to check local ordinances and laws,” he said. “If we contact them, they’ve generally been apologetic.
“Most of these financial institutions contract with property preservation companies to safeguard their properties. Decals are placed on houses where people can see them and call if problems are identified.”
Generally, the companies have been quick to do whatever is necessary to make repairs or take care of maintenance issues, he said.
“They would rather have their contracted companies do the upkeep, than force the city to become involved,” Pinti said. “If the city does it, we may not get the most cost efficient contractor or, if one of our workers does the grass cutting, the costs may be higher than it costs them to have the work done.”
Pinti said there has be a marked improvement in care of foreclosed properties since council passed the legislation.
“The registration of the properties has given us specific people to contact if there are problems,” Pinti said. “We did not have that prior to the passage of this law.”
The health department is working on amendments to recommend to council to strengthen the law and to close possible loopholes discovered during the law’s implementation.
Warren Mayor Doug Franklin said the program is showing signs of effectiveness.
“It has been a good program,” he said.
Matt Martin, executive director of Trumbull Neighborhood Partnership, said he is pleased to hear Warren has been able to collect on some bonds because of the 2013 legislation.
Youngstown passed similar legislation in 2013.
“As I understand it, Youngstown has collected more than $2 million in bonds through its program,” Martin said.
There are more than 500 Trumbull County homes in some phase of foreclosure, Martin said.
“I am not aware which are the ones that have been registered,” he said. “I think that for tools like the foreclosure bond to be the most effective, they need to be used in tandem with other tools like targeted code enforcement, strategic demolition and blight remediation, and land banking.”
Martin would like to see the creation of a vacant properties task force that would allow the city, the county landbank, TNP and other interested organizations to share information and resources to address the problem of vacant foreclosed properties in a coordinated fashion.
“What is lacking is a streamlined approach in vacant property management,” he said.
Source: TribTODAY.com
