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Law will help reduce blight, Youngstown officials say



Published: Wed, March 27, 2013 @ 12:06 a.m.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

City and Mahoning Valley Organizing Collaborative officials say enforcing a new foreclosure law will help reduce the city’s blight problems.

The law requires those filing foreclosures on vacant homes or houses that are soon to be vacant to post a $10,000 cash bond with the city for each property.

“It’s designed to hold banks responsible,” said city Law Director Anthony Farris.

If a bank maintains the property, it would receive all but $200 of the $10,000 back once it’s sold under most circumstances.

The $200 covers administrative costs, Farris said.

The bond money could be used for required maintenance or demolition if either is needed.

“As long as it doesn’t fall into disrepair, that bond won’t be touched” except for the $200 fee, Farris said.

“Because several of the big banks don’t want to maintain properties that they chase people out of, it costs the city dearly,” said Maureen O’Neil, the city’s neighborhood- improvement coordinator. “I’m excited to begin collection of the bond because it will hold these banks accountable for the blight they create and save the city and taxpayers money.”

Vacant houses are easy targets for vandals and thieves who can take a nice home and turn it into one in need of demolition in a short period of time, city and MVOC officials say.

The legislation, approved in January by city council, is based on laws in Springfield, Mass., and Canton, though the Ohio city doesn’t enforce it, said Gary Davenport, MVOC’s organizing fellow.

Through its vacant- property registration program, Youngstown has information on 954 houses currently vacant — several more exist — with about 735 of them either in the process of being foreclosed by a bank or foreclosed, O’Neil said.

The city recently sent letters to several of those banks informing them of the $10,000 bond on each structure.

Between January 2004 and last month, 5,186 houses in Youngstown were in foreclosure, according to the MVOC.

JPMorgan Chase has foreclosed on about 200 properties in Youngstown since 2010, according to the MVOC.

Local banks are cooperating with the city, and efforts to get out-of-town banks involved are ongoing, said Mayor Charles Sammarone.

The goal is to make sure that foreclosed houses or those in that process are properly maintained, Sammarone said.

“Blight is the No. 1 issue in the city,” said Councilman John R. Swierz, D-7th.

If banks don’t comply, the city will prosecute, Farris said.

One problem is homeowners who receive foreclosure letters from banks will leave their houses thinking they’ve lost their home, Farris said.

But banks can dismiss foreclosure proceedings, which returns ownership of the property back to the homeowner, he said.

Anyone going through a foreclosure should stay in the home until the matter is resolved, O’Neil said.

Claudia Sturtz, who’s lived in her South Hazelwood Avenue home on the city’s West Side for the past 19 years, is fighting foreclosure from her bank after losing her job in 2009.

Sturtz requested her monthly mortgage payment be reduced in order to keep her house.

She said it took nearly three years to get her mortgage payments reduced, but her bank refuses to lower her 6.8 percent interest rate.

Also, Sturtz said the bank will lower her $56,000 mortgage to $42,000 if she makes timely monthly payments for the next three years. The house isn’t worth $25,000, she said.

“My savings are completely tapped out fighting a foreclosure that never should have happened,” Sturtz said. “The city is tapped out, too. The banks abuse foreclosure and destroy lives and communities. We need accountability to stop this from happening again and again and again.”


Comments

1Photoman(1018 comments)posted 1 year, 8 months ago

This action follows current trends in blaming the banking industry. Perhaps our officials have forgotten a now illegal practice called redlining where lenders refused to approve loans in areas with a high foreclosure rate. I suspect this practice will be brought to bear, not because of borrowers but because of our politicians, in our area. Of course, it wil have a different name and will utilize legal parameters, but it will reduce the number of home loans in this area.

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2retiredfella(31 comments)posted 1 year, 8 months ago

There are no home loans in this area, it is almost impossible to refinance your home. The banks caused so many problems they should be part of the clean up of their problems.

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3georgejeanie(887 comments)posted 1 year, 8 months ago

Redlining was put in place for a reason, the banks are in business to make money, and they were well aware of the pitfalls to lending money to people with no interest of paying loaned money back. Free housing for years, ruin the house, then leave and leave the bank holding the empty bag. If I was the bank I would do the demolishing in this wreck of a city and they would be money ahead instead of trying to maintain a house in this area.

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4One_Who_Stayed(237 comments)posted 1 year, 8 months ago

@georgejeanie

What they are doing here is much worse than Redlining.

They will not loan money to perfectly credit-worthy people. People with good jobs and credit history cant borrow money to buy a house here. Why would that be? I have no problem with banks not loaning money to people without means and people who don't pay their bills, but in this situation, they are simply not loaning money to anyone - regardless. I have seen this happen on several occasions (myself being one of them).

I head it said once that "Bankers are people who will give you an umbrella when it's sunny and take it back when it starts raining." Never has this been more true than the home financing situation in this city.

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