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The law requires banks to post a $10,000 bond with the city if they foreclose on a property

Published: Mon, March 25, 2013 @ 6:57 p.m.

Letters to banks that have foreclosed on about 300 houses were recently sent

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The city today will start enforcing a new law requiring those who want to foreclose on properties, primarily banks, to post $10,000 bonds on each structure in an effort to making those lending institutions more accountable.

Local banks are supportive of the law, Mayor Charles Sammarone said.

“We hope to get those out-of-town banks to cooperate,” he said. “If you don’t follow the law, we will take you to court. We’d like for them to cooperate. We’re not attacking any banks. We may down the road if we don’t get compliance.”

The legislation is a result of a Mahoning Valley Organizing Collaborative campaign, and the bond can be used against mowing, boarding and demolition costs the city incurs, said Gary Davenport, organizing fellow for the agency.

The Youngstown legislation is based on laws in Springfield, Mass., and Canton, though the latter city doesn’t enforce it, Davenport said.

“This will keep banks accountable and help reduce blight in the city,” he said.

Letters to banks that have foreclosed on about 300 houses in the city were recently sent about the $10,000 bonds, said Maureen O’Neil, the city’s neighborhood improvement coordinator.

The city is working to determine how many houses in the city are in foreclosure. Between January 2004 and last month, 5,186 houses in Youngstown were in foreclosure, according to MVOC statistics.

One reoccurring problem is banks send letters to homeowners stating the lending institutions are going to foreclose, and after starting the proceedings, they drop it because the house isn’t worth their trouble, Davenport and O’Neil said.

But plenty of people leave their homes after getting the letter, not knowing the bank decided not to foreclose, they said. The property is left unattended and vacant, leading to vandalism and often times major deterioration, they said.

Anyone going through a foreclosure should stay in the home until the matter is resolved, O’Neil said. An owner isn’t required to move until a transfer takes place, she said.


1Ytownnative(1114 comments)posted 2 years, 6 months ago

So a bank lending money to anyone who wants to buy a house in the city will bear a potential increase of $10k for any house they finance in the city? I'm sure that will start the money flowing for people to buy houses in the city.

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2becky47(34 comments)posted 2 years, 6 months ago

Ytownnative maybe you should reread the article. The bond will only be required if the bank decides to forclose on a homeowner. The city spend hundreds of thousands of dollars every year just to do mowing on all of the empty lots and houses some of which have been forclosed on but the banks have chosen not to maintain. Why should the city residents be accountable for the blight that these banks have caused. It is time for them to suffer the consequences of their actions. Any bank that is compliant will not have to worry about the bond being used.

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3NilesOhio(883 comments)posted 2 years, 6 months ago

I guess that's how you tax a dead horse.

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4UNCOMMONSENSE(550 comments)posted 2 years, 6 months ago

becky47 the banks do not cause the blight they are simply left with the blighted remains when these individuals walk away (both residential and commercial.) The banks are being held responsible because they have the deep pockets. This is just an attempt by the city to have the $10,000 bond cover the cost of demolition.

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5u0052068(1 comment)posted 2 years, 6 months ago

Hey Becky, maybe you should wake up and smell the coffee. The blight was not caused by the banks. It was causedc by deadbeat individuals not paying for their American Dream home. Banks cannot discriminate on lending in certain areas as it is called red lining. So a "qualified" buyer gets a loan for a property in Youngstown, then gets to milk the system for two to three years during a foreclosure, followed by a Bankruptcy and other delay tactics. Everyone likes to blame the banks when people do not fulfull their obligations. Sheez. If payments were made, there would be no foreclosure, Hmmmmm. Smelling the coffee yet?

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6BruceBroyles(2 comments)posted 2 years, 6 months ago

The Banks will still send the letters and many people will leave their homes. The banks will only proceed against the nicer homes left in Youngstown, and the $10,000 bond will be added to the reinstatement cost or the modification agreement. This will make it even more difficult for Homeowners to keep their homes, as the Banks will be able to increase the costs these Homeowners are facing immediately.

The post immediately above by u0052068 demonstrates that the media has successfully brainwashed many to believe that all homeowners are deadbeats. Most homeowners would make their monthly payment if the Bank would accept the monthly payment. Unfortunately, once a homeowner misses just one payment due to losing a job, illness, divorce, or simply life, the Bank charges unreasonable fees and expenses and eventually the Homeowner has no chance of catching up.

The Banks will use this new law to make matters worse much more quickly.

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