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Foreclosure bond fights blight in Youngstown



Published: Sat, October 19, 2013 @ 12:08 a.m.

By Peter H. Milliken

milliken@vindy.com

YOUNGSTOWN

In its new foreclosure bond legislation, the city has an effective tool to fight urban blight, city law department officials said.

The city has $870,000 in foreclosure bond money on hand, having accumulated that sum since it began collecting such payments in April, city Law Director Anthony Farris said at a Friday news conference at Mahoning Valley Organizing Collaborative’s offices, 25 E. Boardman St., downtown.

That doesn’t include the $50,000 to $60,000 the city has refunded in cases where foreclosure proceedings have ended.

Under an amendment to the vacant-property registry, which city council unanimously passed in January, those filing foreclosures on vacant homes or homes that become vacant, must post a $10,000 cash bond.

Failure to pay the bond is a first-degree misdemeanor criminal offense, but the city hasn’t prosecuted anyone yet for this offense.

“The bond only applies if the property is vacant or becomes vacant during the foreclosure,” Farris said.

The bond is somewhat similar to the security deposit a tenant pays to a landlord before renting an apartment.

The foreclosure bond can be used to pay any grass-cutting, boarding or demolition costs the city might incur.

Farris said, however, “Using the money ourselves is an option of last resort.”

It would be cumbersome for the city to regularly do this work itself, he said, adding that the city would rather have the property owner take care of the property and comply with maintenance requirements.

“If you have the money sitting there, that puts you in a better bargaining position. If they don’t comply, we’re just going to take it,” he said of the bond money.

As is the case with a renter’s security deposit, the party filing the foreclosure gets back whatever money the city doesn’t spend from the $10,000 when the foreclosure proceeding ends. The city does retain a $200 administrative fee from the foreclosure bond.

“If you’re going to file a foreclosure in the city of Youngstown, you better be serious about it because it’s going to cost you a $10,000 bond to do that,” said Robert Rohrbaugh, an assistant city law director who prosecutes housing-code violations.

“Foreclosure, as we’ve seen historically, causes people to leave their homes. When they leave their homes, you have vacant structures. Vacant structures, historically, have resulted in blight,” he added. “The goal is to keep people in their homes.”

According to its website, the MVOC, founded in 2008, is an innovative community organization that brings together neighborhood, faith-based and labor groups in Trumbull, Mahoning, and Columbiana counties to build the capacity necessary to create sustainable change in those communities.

Farris and Rohrbaugh spoke as MVOC volunteers stuffed envelopes informing people faced with foreclosure concerning local housing counseling and other agencies that may be able to help them keep their homes.

Since 2004, there have been more than 5,200 foreclosures in the city, according to MVOC, which urged city officials to enact the foreclosure bond.

MVOC is promoting a 6:30 p.m. Oct. 29 forum on vacant properties, foreclosure, demolition, blight, land banking and neighborhood stabilization at First Presbyterian Church, 201 Wick Ave. The forum’s theme is “Banking on Change.”


Comments

1UticaShale(850 comments)posted 9 months, 2 weeks ago

Nice resolution, what the MVOC community organizing has successfully accomplished, is now anything worth less than $10K and the mortgage note, will not be foreclosed on and left to ROT. It forces creditors to Cherry pick only the valuable properties and leave the delapidated ones for the City to tear down.
"You must be smart enough to know when you do not know." Jasper-the-cat

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2city_resident(509 comments)posted 9 months, 2 weeks ago

Most of the homes in Youngstown's stable neighborhoods are worth more than $10 k, so this legislation will help to keep them stable.

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3Ianacek(891 comments)posted 9 months, 2 weeks ago

The Bond is just another cash grab by a financially desperate & near bankrupt City. Only 1 other City in the country enforces such an Ordinance.

How many really think the possibility of a $10,000 bond or jail time makes it more likely that banks will lend on Youngstown properties , rather than go elsewhere ?

Youngstown unemployment has increased significantly since the Bond was introduced , although it has fallen everywhere else in the Valley. Youngstown residents may be voting next month , but banks , entrepreneurs & skilled workers have already voted with their feet .

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4southsidedave(4777 comments)posted 9 months, 2 weeks ago

YTown has to get its money from somewhere...I agree with "lanacek" in the above comment

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5UticaShale(850 comments)posted 9 months, 2 weeks ago

@City resident,
So majority of the South Side, East side , North side, and half of the West side are not stable.
The MVOC and City wins, 70% of the housing stock is crap and it cannot be denied by Yins, do a drive by.

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6One_Who_Stayed(236 comments)posted 9 months, 1 week ago

@Ianacek

Banks have been red-lining this city for many more years than the recession/depression of 2010. Actually they have been red-lining it since the just after steel mills closed in 77.

In that time they have been allowed to profit from the good loans that they made - and they have been able to walk away from and not maintain the bad ones. When a loan goes bad, rather than maintaining the property and attempting to re-sell it, they have simply leave it to rot, which has accounted for a large majority of the blight in this city.

Why should they be allowed to profit when things go well and walk away with no responsibility when they don't? Are they to be treated like a wall street "Too Big to Fail" institution? Answer is they cant when they have to post this bond first. Many of these will be left to rot anyhow, but it will cost them less to tear them down. Problem solved.

Either way - whining about the city not being "fair" to banks is a joke. Banks have not been even remotely fair to this town or the people in it for 30 years now.

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7UticaShale(850 comments)posted 9 months, 1 week ago

Amazing how ignorant and uneduated many here are as they pretend to know what they don't know. The banks walk away from nothing , simple financing, they own nothing unless they buy the damn things fools. The real culprit is the OWNER of record and they are responsible for the property always. Blaming the banks even though I stay away from them, is a cowardly act, pure socialism and jealousy.

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8One_Who_Stayed(236 comments)posted 9 months, 1 week ago

"The banks walk away from nothing , simple financing, they own nothing unless they buy the damn things"

Ron if you had the first clue you wouldn't have any idea what to do with it.

The bank owns the property until the mortgagee pays it off. The OWNER of record IS the bank you dip$hit. And they do not have to buy anything back to own it, they simply foreclose on it, which is the basis of this problem. They foreclose, write them off their books as a loss (making them more money) and then leave them to rot - all while the folks who live across the street from it get to look at it rot every day.

No more.

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9UticaShale(850 comments)posted 9 months, 1 week ago

"The owner of record is the bank you dip$hit"

Folks what more proof do you want than the braindrained occupants of Youngstown. This "one-left-behind" is an example of low information. He believes without question that a bank has a mortgage on a house they have "title." ROTFLMAO :')

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1076Ytown(1213 comments)posted 9 months, 1 week ago

Read the article carefully...keywords "those filing foreclosures"::

"Under an amendment to the vacant-property registry, which city council unanimously passed in January, those filing foreclosures on vacant homes or homes that become vacant, must post a $10,000 cash bond."

“The bond only applies if the property is vacant or becomes vacant during the foreclosure,” Farris said."

The borrower owns the home UNTIL foreclosure proceedings are complete. They can sell their property during a short sale or walk away. Once foreclosure proceedings are COMPLETE the lender owns the home.

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11UticaShale(850 comments)posted 9 months, 1 week ago

Wrong again 76YTown, when will you people learn to be smart enough to know that you do not know?

"Once the foreclosure is complete the lender owns the home" Bullcrap again, whoever WINS THE BID AT THE SHERIFF SALE OWNS THE HOME, kapish?

Since 2005, my associates with my management have foreclosed and forfieted more parcels than even Lien Forward.

Again, the only thing you community organizers have successfully done here is create more blight, because NO one, I mean NO one will invest in YTown housing as investments again. Not with all these regulations against the investor. The real culprit is the tenant who the City protects because of their vote. Ask anyone who invested in Youngstown housing, they will school YOU, the tenant 90% of the time.

The low income tenant moves into your rental, up to code, signs a lease, pays first then stops paying, you threaten eviction, the tenant tears your house up, call the City and the City hauls you the investor to housing court and if you do not fix the tenant's damage, you go to jail. And the tenant goes to the next up to code house. Sounds like a great City to invest in :')

And now the community organizers concoct this plan, brilliant, I'll watch this reality TV show further create blight.

Do the math brilliant ones, $800K the City is bragging about, that is only 80 houses that have value enough to try to save by a LENDER (not owner fools). 80 houses, there are 2000 that need demo'd... brilliance!

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1276Ytown(1213 comments)posted 9 months, 1 week ago

UticaShale: "Since 2005, my associates with my management have foreclosed and forfieted more parcels than even Lien Forward."

The purpose of the bond is to require those filing a foreclosure to post a $10,000 bond to assure that said vacant property is maintained while the foreclosure process takes place. It only applies if the property is vacant or becomes vacant during the foreclosure process. "The foreclosure bond can be used to pay any grass-cutting, boarding or demolition costs the city might incur. The party filing the foreclosure gets back whatever money the city doesn’t spend from the $10,000 when the foreclosure proceeding ends. The city does retain a $200 administrative fee from the foreclosure bond."

Utica...
Once foreclosure proceedings are COMPLETE the lender owns the home The foreclosure process must be complete before they can sell the property in a sheriff's sale. If the property sells at the sale, whoever bought it from the lender is the owner.

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13UticaShale(850 comments)posted 9 months, 1 week ago

76YTown, you need to get a lawyer to explain it to you, I give up. You know, you are getting to become dangerous with what you think you know. I'm glad sane people don't read and believe most of you guys.
One more time, the foreclosure is due process for the title holder to realize equity if any, thus an "Auction." It would be unfair if the bank now has a right to forfeit property without a "market sale." The lender will add on all cost to it's debt. The BANK only owns the property if it is the sucessful bidder.
Now I'm not even a lawyer and I understand this basic principle of real estate. You're getting close though.

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1476Ytown(1213 comments)posted 9 months ago

Hey UticaShale, as long as you post the $10K bond with the city to assure upkeep of the property while you proceed with your many foreclosures, I'm happy!

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15UticaShale(850 comments)posted 9 months ago

There is no bond on land, you need to go back to school, you step in it all the time :')

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1676Ytown(1213 comments)posted 9 months ago

Read the article. You might learn something.

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17One_Who_Stayed(236 comments)posted 9 months ago

No point 76.

Ron Eiselstein (Utica-Shale - google his real name) this cities biggest "Know it all" is simply going to keep spilling his "I know better" and "you uneducated people" and "brain drain" crap until he's tired of talking. Unfortunately he never seems to get tired of hearing himself talk - God knows I do.

His pseudo-intelectual BS not withstanding, he clearly is the one who knows nothing. From his Shrimp Farm to his illegal Timbering to his portfolio of unpaid taxes to whatever his latest snake-oil campaign is, he just talks and talks and talks. . . . never listens - never takes his own advice and educates himself.

Sure wastes a ton of bandwidth here giving bad advice and idiot ass opinions to anyone who will listen (both of them).

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1876Ytown(1213 comments)posted 9 months ago

LOL! For all we know, it may have been his foreclosures that prompted the legislation!

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19One_Who_Stayed(236 comments)posted 9 months ago

I'm sure you're right.

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20UticaShale(850 comments)posted 9 months ago

@One left behind, I googled his name and found him to be the top blogger on GoMarcellusshale.com , with thousands of hits (1 hit per minute) you cowards can't even stand up with your real name. Please tell me they foreclosed on this guy and took all those shrimp lands you talk about before they discoverd the oil. Please tell me this guy is banished to the Gulag.
Hell, this guy has done more productive projects in a few years than you two in a lifetime. Why don't you two show us your resume and be proud who you claim to be. You two are fleas on an elephants ass.

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