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