Foreclosure bond fights blight in Youngstown

By Peter H. Milliken


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.”

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