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Trenton’s failure to pursue foreclosures costing city hundreds of thousands in … – The Times of Trenton

TRENTON — The city has been missing out on hundreds of thousands of dollars in potential revenue because it has failed to pursue foreclosure cases against delinquent taxpayers for the past three years, city officials said.

In addition to depriving cash-strapped Trenton of badly needed funds, in at least one case the city’s failure to complete a foreclosure has held up the sale of a commercial property, according to bankruptcy attorney Andrea Dobin.

Dobin is overseeing the bankruptcy proceeding for Jet Wines and Liquors, a bar on a North Willow Street block that has seen a number of gang-related violent incidents over the years.

The owner has gone more than 10 years without paying property taxes, according to bankruptcy records.

Jet Wines, which is no longer in business, owes Trenton more than $120,000 in back taxes, according to city records.

The city moved to foreclose on the property in 2010, but it appears that the proceedings were never concluded, Dobin said. As a result, city attorneys were confused about the status of the case and have been unresponsive to Dobin’s request that they approve a sale of the property, she said.

“I will have the ability to pay them over $50,000,” Dobin said.

“They are not doing anything. This is not a priority for them.”

She said she was mystified by the city’s failure to conclude the foreclosure.

“I don’t know what happened to it,” she said.

Jet Wines owner Cynthia Taylor filed to dissolve or reorganize the business under Chapter 7 bankruptcy laws after the state tax audit found the company owed $161,000 in unpaid sales taxes, Dobin said. The total owed to the state, including interest and other taxes, comes to $236,000, and the company owes the IRS more than $115,000, she said.

She said she has never before seen a situation where the city would not go after unpaid taxes.

“If you didn’t pay your mortgage for 10 years, you wouldn’t have your house,” Dobin said. “They don’t generally let it get this bad.”

Calls to the city’s law department were not returned. Business Administrator Sam Hutchinson said he had no information about the Jet Wines property.

But officials admitted they have been letting some property owners who owe large sums avoid the consequences.

“We haven’t done any foreclosures for a while,” said Edward Kirkendoll, the municipal tax collector.

Hutchinson said the city stopped processing foreclosures after it laid off staff in recent years. The city previously had a real estate department that oversaw foreclosures, he said.

“Part of it has been a lack of staffing,” Hutchinson said.

Kirkendoll said that when a taxpayer misses a quarterly payment, a delinquent notice goes out.

Municipalities are required to have a tax sale every year to sell liens on properties with delinquent payments.

If the lien is not purchased by a third party, such as an investor, the city purchases it. Trenton pursues foreclosure after an owner accrues seven quarters of unpaid taxes, Kirkendoll said.

The foreclosure process starts six months after the most recent tax sale, he said.

Hutchinson said he was concerned that, because the city has not been processing foreclosures, property owners have less incentive to pay their taxes on time, and the city has been missing out on revenue.

He noted that the city has contracted with an outside tax collection firm, Revenue Services LLC.

The Connecticut company pursues delinquent taxpayers and can help manage litigation, but is not itself a law firm, according to its website.

“Our aim is really on entities that are commercial, that have the ability to pay,” Hutchinson said. “Our intent is to first go after the most egregious offenders.”

Contact Jenna Pizzi at jpizzi@njtimes.com or (609) 989-5717.


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Article source: http://www.nj.com/mercer/index.ssf/2013/09/trentons_failure_to_finish_foreclosures_is_costing_the_city_thousands.html

Foreclosure relief helps few keep homes – Tribune

When five giant mortgage firms signed a landmark $25 billion mortgage settlement last year, officials hailed debt forgiveness as the primary strategy to preserve homeownership.

The banks hoped to avoid further enforcement action over widespread foreclosure abuses; federal regulators and state attorneys general aimed to prevent even more foreclosures.

“This isn’t just about punishing banks for their irresponsible behavior,â€� Housing and Urban Development Secretary Shaun Donovan said. “It’s also about requiring them to help homeowners stay in their homes.â€�

Advocates for borrowers took such comments to mean that the banks would prioritize debt write-downs on first mortgages, which banks resisted before the settlement. Now, with nearly all the promised relief handed out, it is clear that the banks had other ideas.

The vast majority of the aid to borrowers, it turns out, came in the form of short sales and forgiveness of second mortgages. Just 20 percent of the aid doled out under the national settlement went to forgiveness of first-mortgage principal, the kind of help most likely to keep troubled borrowers in their homes. In terms of borrowers helped, just 15 percent of the total received first-mortgage forgiveness.

The five banks collectively delivered twice as much aid using short sales, in which owners sell their homes for less than the amount owed and move out, with the shortfall forgiven.

In all, the lenders sought credit for nearly $21 billion related to short sales and $15 billion related to second mortgages. That compares with $10.4 billion in write-downs on first mortgages.

Bank officials said the high volume of short sales in part reflected an enormous backlog of borrowers who, before the settlement was announced, already had failed to qualify for various loan modification programs. Other borrowers decided not to keep their homes, they said, for such reasons as divorce or a job offer in another city.

“The decision to pursue a short sale versus a retention option rests with the homeowner and not with the servicer,� Wells Fargo said in a statement released by Tom Goyda, a bank mortgage spokesman.

Some foreclosure-prevention counselors and officials at advocacy groups nonetheless expressed disappointment that more first-mortgage debt was not eliminated.

“We all wish there had been more principal reduction, which is what is most helpful in keeping people in homes,� said Kevin Stein, associate director of the California Reinvestment Coalition, a 300-member alliance that lobbies on behalf of low-income and minority neighborhoods.

Still, Stein said, the program set a good precedent, demonstrating that debt forgiveness can benefit lenders and borrowers alike without causing a wave of intentional defaults, as critics had warned.

Bruce Marks, founder of Neighborhood Assistance Corp. of America, a major housing counseling group, had a harsher assessment.

“It just shows you that the banks are running the government,â€� Marks said. “There’s virtually no benefit to borrowers, and yet you give the banks credit for short sales and getting second liens wiped out — something they were going to have to do anyway.â€�

The housing crash made second liens almost worthless in foreclosure sales. Second-mortgage holders don’t get a dime until first mortgages are paid in full. With housing values deflated, that left banks unlikely ever to collect.

Government and banking officials say borrowers nonetheless benefit when second mortgages are wiped out, which removes a major blemish from credit reports and clears away a common obstacle to first-mortgage principal reduction or short sales. What’s more, they said, forgiving second liens makes borrowers more likely to continue paying first mortgages because they believe that they can recover their home equity.

Bank of America alone has forgiven nearly $10 billion in second liens, winning praise from California’s settlement monitor, University of California-Irvine law professor Katherine M. Porter, along with other observers. The Bank of America program automatically wiped out 150,000 underwater second mortgages that had gone delinquent unless the borrowers, for tax reasons, opted out.

More than a third of those customers had equity in the homes restored, Bank of America mortgage spokesman Rick Simon said, and more than half wound up with a loan-to-value ratio of less than 120 percent.

Simon said the bank doesn’t know how many of the borrowers retained their homes after second mortgages were erased, or how many wound up in short sales or foreclosures.

Porter, national mortgage settlement monitor Joseph A. Smith Jr. and Department of Housing and Urban Development officials said they had no idea how often wiping out a second mortgage led to home retention.

In any case, the banks appear to have fulfilled their pledges of relief, although that won’t be official until Smith, a former North Carolina banking commissioner, finishes auditing the banks’ reports, expected by year’s end.

Article source: http://triblive.com/business/headlines/4777414-74/mortgage-borrowers-banks

Pittsburgh’s August Wilson Center facing foreclosure

A local bank is moving to foreclose on the August Wilson Center for African American Culture, the latest and biggest blow to a facility that has struggled to stay afloat almost since the day it opened four years ago.

In a complaint filed Thursday in Allegheny County Common Pleas Court, Dollar Bank is seeking to have the Downtown property with the distinctive sailboat feature sold at sheriff sale in a bid to recover $7 million owed on the center’s mortgage.

The bank also is asking the court to appoint a receiver — the Baker Young Corp. — to manage and maintain the property, which includes exhibition spaces and a performing arts auditorium and is home to the nationally recognized August Wilson Dance Ensemble.

The court action comes four months after the $40 million August Wilson Center laid off staff members to try to keep the Liberty Avenue facility operating amid a nonexistent revenue stream, fundraising shortfalls and budget deficits.

In its complaint, Dollar Bank stated that the center failed to make a monthly mortgage payment of $53,639 in February and has not made a payment since, resulting in a default under the loan.

The bank also said that it learned in August that the insurance required under the mortgage — 100 percent of the full replacement cost and comprehensive general liability coverage of at least $1 million — had lapsed, triggering another default.

Without coverage, the center “risked substantial loss to the mortgaged property, injury to any persons which may have been involved in such loss and injury to value of the lender’s liens and security interests therein, all without recourse because the defendant is insolvent,” the bank stated in its petition for the expedited appointment of a receiver.

According to the complaint, the bank spent $35,812 to obtain insurance and included that amount in the $7 million it is trying to recover on the mortgage.

Oliver Byrd, the center’s interim president and CEO, did not return phone calls Friday. Dollar Bank officials could not be reached for comment.

No date has been scheduled for a sheriff sale and there is a chance, given the center’s prominence, that a resolution could be reached short of that.

If a judge grants the bank’s request, a date would be set for a sheriff sale, at which point anyone interested in the property would be able to bid on it. In such situations, the real estate typically is awarded to the highest bidder, although it is not unusual for the bank holding the mortgage to end up in possession of the property.

The August Wilson Center also has the ability up to the last minute to pay the “upset price,” which includes the mortgage amount plus taxes, insurance and other costs, to stave off a sale. It also could file for bankruptcy protection to prevent a sale.

The possible foreclosure was not the only problem the August Wilson Center was facing Friday.

It also is in default of a $574,000 Urban Redevelopment Authority loan issued last year, after the center missed interest-only payments of $2,153 a month in August and September, URA acting executive director Robert Rubinstein said.

The loan was awarded as part of a debt restructuring and reorganization of management operations put in place about 18 months ago, but the action plan “was never really implemented,” he said.

Asked if he knew why that plan wasn’t put in place, Mr. Rubinstein said, “No, I don’t. That’s what kind of led to where we are today, I think.”

Even if the center hadn’t missed any payments, it automatically would have defaulted on the URA loan when it defaulted on the Dollar Bank mortgage, he said.

Mr. Rubinstein said the possible foreclosure could be “the wake-up call for restructuring of the management and operation of the facility perhaps and, hopefully, a beacon for more community support, including the corporate community.”

The URA has been involved with the center since its conception, assembling the land for the building and helping in the construction of the facility.

Mr. Rubinstein said the center’s problems “started with cost overruns and operational and management issues, programming issues and lack of widespread support from the greater Pittsburgh community and the corporate community.”

He added there have been “a couple of disjointed efforts and initiatives” aimed at addressing the facility’s woes but nothing “has coalesced into a strong action plan.”

The August Wilson Center is an independent organization with ties to local arts groups like the Pittsburgh Cultural Trust and the Pittsburgh Ballet Theatre. Local donors and foundations also have poured millions of dollars into the center to support programming, although the Pittsburgh Post-Gazette reported in May that some of those relationships were in a holding pattern because the facility had not provided required financial information to the charitable institutions.

In a statement Friday, Robert Vagt, president of the Heinz Endowments, said, “The August Wilson Center is a vital cultural asset of this region. Since the center’s inception, the Endowments has provided $9 million in support, and we stand ready to be a part of any comprehensive plan that reasonably provides for the center’s future activities and is supported by the community.”

One organization that has been holding back money to the August Wilson Center is the Allegheny Regional Asset District.

David Donahoe, RAD’s executive director, said the center’s $300,000 operating grant this year has been under suspension for several months because the facility has yet to produce a 2012 financial audit.

The center received a $75,000 payment from RAD in March as part of its grant allocation, but did not receive additional $75,000 allocations in June or September because of the suspension.

Mr. Donahoe said he has been told that audit has been completed and is on its way to RAD. Once it is received, it will be reviewed and the RAD board will have to decide whether to release the withheld funds.

The center has requested $425,000 in operating support and a $65,500 capital grant from RAD for 2014. Mr. Donahoe said the center was expecting to run a $1.7 million deficit for the fiscal year ending this past June 30. In its 990 tax form last year, the center reported deficits of $1.6 million and $390,000 in the 2010 and 2011 fiscal years, respectively.

Opened in 2009, the performing arts, exhibition and educational center was designed to celebrate African-American culture in Pittsburgh and throughout the country and to pay homage to August Wilson, the late Pulitzer Prize-winning playwright who grew up in the Hill District and who set his 10-play cycle there. Much of the money raised for the $40 million construction came from public and private foundation sources.

Article source: http://www.post-gazette.com/stories/business/news/pittsburghs-august-wilson-center-facing-foreclosure-705227/

Long Island foreclosure cases

Long Island’s upward trend of foreclosure filings buck the national trend of declining rates for the 12-month period to July 2013, shown in the map below. Foreclosure rates for earlier periods are shown in the table below the map.

Foreclosure rates represent the number of filings per 100 one- or two-family homes in each ZIP code. Four clusters of ZIP codes were grouped: Great Neck (11020-11024), Oceanside and Rockville Centre (11570-11572), Valley Stream (11580-11582) and Hicksville, Plainview and Old Bethpage (11801-11803). Click on each area for more details.

Source: Long Island Profiles

Article source: http://data.newsday.com/long-island/data/foreclosures/2012-2013/

Rising foreclosures hurt Island as nation recovers


Originally published: September 28, 2013 6:31 PM
Updated: September 28, 2013 6:57 PM

By MAURA MCDERMOTT
 maura.mcdermott@newsday.com

Keys sit atop a mortgage foreclosure form.

Photo credit: iStock | Keys sit atop a mortgage foreclosure form.

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New foreclosure cases on Long Island are spiking, even as the mortgage crisis fades in the rest of the United States.

Despite rising home values that suggest a housing rebound on the Island, lenders filed 12,271 initial foreclosure cases here in the first eight months of this year, a nearly 53 percent surge compared with the same period in 2012, according to data from real estate information firm LI Profiles, based in Brightwaters.

Nationwide the number of initial filings dropped 34 percent during the same period, national data provider RealtyTrac reported.


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“We’re definitely seeing the Long Island area buck the national trend when it comes to foreclosure activity,” said Daren Blomquist, vice president of RealtyTrac, based in Irvine, Calif.

The share of Island mortgages in distress is more than double the national average, according to national data provider Lender Processing Services, of Jacksonville, Fla. In July, 8.2 percent of all homes with mortgages in Suffolk County and 6.1 percent of homes with mortgages in Nassau County were in the foreclosure pipeline, compared with 2.8 percent of homes with mortgages nationwide, LPS reported. LPS collects data from mortgage servicers. Its definition of foreclosure includes cases that have been referred to bank attorneys but not yet filed in court, as well as those making their way through the court system.

Experts say Long Island continues to struggle with foreclosures for a complex set of reasons. They range from New York’s almost three-year foreclosure process — tied with New Jersey for the longest in the nation — to Long Island’s riskier-than-average mortgage loans before the collapse of the housing market in 2008. Another factor: the region’s difficulties in bringing back high-paying jobs. Nassau’s median household income was $93,214 last year, a decline of nearly 7 percent since 2008, according to census data. In Suffolk, median income has dropped nearly 5.7 percent over the same period, to $86,334.

 

Loan modification problems

Long Islanders facing foreclosure also encounter the same troubles as distressed homeowners nationwide, such as difficulties negotiating with banks over loan modifications. In a $25 billion settlement reached last year with federal and state agencies, five major lenders agreed to overhaul their foreclosure practices and offer more help to homeowners.

Four out of the five banks — Bank of America, Citibank, JPMorgan Chase and Wells Fargo — have violated terms of the settlement, most often by failing to quickly notify homeowners of missing documents, according to a June report by the settlement’s monitor, Joseph Smith. The banks have said they are working to fix the problems.

The high rate of foreclosures on Long Island poses problems for all homeowners, not just those at risk of losing their residences, housing experts said. A large backlog of distressed homes — there were 6,070 pending foreclosures in Nassau and 12,693 in Suffolk in August, according to the state Office of Court Administration — is weighing down the Island’s housing market amid a recovery in the rest of the country.

Suffolk home prices have risen 19 percent as of August since hitting a post-housing crash low in January 2012, according to data from the Multiple Listing Service of Long Island. In Nassau, prices have risen 22 percent since their post-crisis low in March 2012. Nationally in August, home values had rebounded 37 percent since bottoming out in January 2012, according to the National Association of Realtors.

 

Negative impact on region

A glut of foreclosures typically “puts downward price pressure” on a region’s housing market because many foreclosed homes fall into disrepair, causing their values and those of surrounding properties to drop, said Jaison Abel, a senior economist with the Federal Reserve Bank of New York.

The people hit hardest, of course, are the families at risk of losing their homes in foreclosure. There were 43,385 Long Island households in July that either were in foreclosure or had been referred to bank attorneys, according to Lender Processing Services, down nearly 8 percent from a year before, but still more than twice the number in July 2008. The national housing rebound — and the more modest uptick in values here — is leaving them behind.

Victor Alexander Osorio is among the Long Island homeowners in distress.

Osorio lives with his wife and their two daughters in a Baldwin home they bought in 2002 for $305,000; they took out a mortgage of $289,750, according to Osorio and public records. He lost his six-figure job as a Bronx-based district manager at a fitness chain in 2009. He got a lower-paying job as a store manager for a wireless company, but he lost that job in a downsizing in 2011, he said. Now the family relies on his wife’s income as a registered nurse.

He said he requested a loan modification from his lender, Citibank, in 2009, but he never got approved for a permanent modification. He borrowed money from relatives to make partial payments on the roughly $3,200 monthly mortgage, but in 2010, he said a Citibank phone representative told him that his partial payments were not being applied to his mortgage. Frustrated by his inability to get a permanent loan modification and believing his payments were going “nowhere,” he said, he stopped making payments.

 

Exploring options

A spokesman for Citibank said, “We take these matters very seriously and are taking another look at this case to explore any potential options for the borrower.” The spokesman said partial payments are kept in a separate account until enough money accrues to make a full payment; at that point, the full payment is applied to the mortgage.

When Citibank foreclosed in 2011, the outstanding balance was $352,000, public records show. Osorio confirmed that figure, saying he had refinanced in 2005. After the bank started foreclosure proceedings, Osorio hired a lawyer. The bank offered him a trial modification in March 2013, with a monthly payment of $2,608, he said, which he has not accepted because he says he and his wife cannot afford it.

Banks also experience losses in the foreclosure process, said Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based mortgage information website.

“A lender taking a home back for a loan that was originated with very little down payment in 2005 or 2006 faces a substantial loss,” due to the decline in home values, legal fees and the cost of preparing the home for sale and selling it, Gumbinger said.

In states such as New York, where courts oversee foreclosures, he said, many homeowners “haven’t made a mortgage payment in years and are still living in their homes . . . These are legal obligations and if you fail to meet your obligations, the lender has recourse, which is the foreclosure process.”

 

Island’s risky loans

One key reason for the Island’s distress precedes the financial crisis, foreclosure experts say. Long Island homeowners had more risky mortgage loans than the nation at large back in 2006, before the housing bubble burst, and the low quality of those loans made them more likely to slide into foreclosure, the Fed’s Abel said. In 2006, 74 of every 1,000 homes on Long Island had a mortgage that was considered “risky” — classified as either subprime or a borderline category known as “Alt-A” — compared with 56 out of 1,000 homes across the country, Abel said.

“It’s not the banks’ fault that the value of the homes decreased,” said Gale Berg, director of pro bono attorney activities for the Nassau County Bar Association. “But what is the banks’ fault is that they may have given more money than the people were eligible to pay.”

Another critical factor: the Island’s struggle to recapture high-paying jobs makes it hard for families to emerge from financial troubles, advocates for homeowners say.

And New York’s court protections for homeowners have extended the time it is taking for the state to recover from the foreclosure crisis, said RealtyTrac’s Blomquist. New York and New Jersey are the slowest states in the nation to process foreclosures, with an average delay of 1,033 days, according to RealtyTrac. Florida is next, at 907 days.

Across New York State, 5.7 percent of homes with mortgages were in foreclosure or had been referred to bank attorneys as of July, according to Lender Processing Services.

“Most of the country has a much quicker, unencumbered foreclosure process, and as a result the majority of the country is already healing and getting back to normalcy while we’re still dealing with the collateral damage of the financial meltdown,” said Todd Yovino, owner of Island Advantage Realty, which has offices in Island Park and Hauppauge.

Besides those three key reasons for the crisis, other factors contribute to the problem.

The Island’s high property taxes mean that even those who can get their mortgages modified still face high housing costs. “Sometimes it just can’t be done, even if the bank comes to the table with a 2 percent modification,” said Carol Yopp, foreclosure prevention manager at the Long Island Housing Partnership, referring to the lowest mortgage interest rate homeowners can get under guidelines for the federal Home Affordable Modification Program, which offers incentives to lenders for modifying loans. “Even with a magic wand, you couldn’t create an affordable payment.”

Harvey Sorid, a Uniondale attorney who counsels homeowners in distress, said at least half his foreclosure clients have dealt with job loss and about one-fourth have gone through divorce. Almost all his clients have sought loan modifications from banks, but decided to hire an attorney when they were unsuccessful, he said.

“It’s not personal extravagance,” Sorid said. “People want to work and have a good life.”

Superstorm Sandy could also be a factor. It is still unclear whether storm damage will cause a significant spike in foreclosures, but the cost of rebuilding puts more homeowners at risk of losing their residences, housing experts said.

After the Oct. 29 storm, many homeowners got temporary reprieves from their mortgage lenders, which allowed them to skip payments.

“What a lot of people didn’t understand is that at the end of it, they’d have to catch up,” said Marianne Garvin, chief executive of Community Development Corp. of Long Island, which counsels homeowners in distress and buys and rehabilitates blighted residences.

 

Impact of firm’s collapse

New York is also experiencing the delayed impact of the 2011 collapse of the law firm of Steven Baum, located in Westbury and upstate Amherst. Baum’s firm announced it would close after a federal investigation into its foreclosure practices that resulted in a $2 million fine, and a scandal over photos of employees dressed up for Halloween as families in foreclosure. Some experts estimated that Baum handled 40 percent of New York’s foreclosures before the firm closed. Many of those cases are now being refiled by new lawyers after further review, said Kirsten Keefe, a senior staff attorney with the Empire Justice Center in Albany, which provides legal assistance and advocacy.

And while more local homes are sliding into foreclosure, fewer are coming out. In Nassau from June through August, just 12 homes were sold in foreclosure auctions, and lenders repossessed 49 homes, court officials said. Put together, that’s down 73 percent from the same three-month period in 2010 — before the robo-signing scandal broke and banks put the brakes on foreclosure sales and repossessions — when 53 homes were sold at auction and lenders repossessed 177 homes. Suffolk does not track the number of foreclosure sales and repossessions, a court official said.

“The banks are letting this stuff linger,” said Susan Vincennie, president of LI Profiles, which collects real estate data from Nassau and Suffolk. As for the low number of foreclosure auctions over the past two years or so, she said: “The banks started wanting top dollar for the properties, and the investors were walking away.”

Across New York State, lenders filed 26,754 new foreclosure cases in the first eight months of this year, almost 66 percent more than in the same period last year, RealtyTrac reported. That includes cases that were refiled; foreclosure cases still in the system after three years must be filed again. Almost 23 percent of all foreclosure starts on Long Island this year were refiles of cases from 2010 or before, with a few dating to 2003, according to data supplied by LI Profiles.

Mortgage lenders and homeowners alike contribute to the delays, said Garvin of Community Development Corp.

Although New York’s court rules have slowed the foreclosure process, they also have prevented improper foreclosures, advocates said. “By taking it to a judge, you have an opportunity to make sure mistakes aren’t being made,” Garvin said.

Even so, many homeowners who received loan modifications during foreclosure proceedings ended up in default again, said Vincent Cuocci, an attorney in Sayville.

If homeowners cannot afford even a modified payment, he said, they may be better off filing for bankruptcy protection, which allows them to restructure their debts.

Foreclosure Percentages by newsday

Article source: http://www.newsday.com/classifieds/real-estate/rising-foreclosures-hurt-island-as-nation-recovers-1.6159638

Developing Detroit: Lone buyer nabs almost all of North Corktown’s auction …

A look at development stories from around Metro Detroit this week

Single buyer nabs nearly every county auction property in Detroit’s North Corktown neighborhood
A single buyer, listed as Joseph Cella, has bought 21 of the 22 available properties in the North Corktown neighborhood for a mere $183,000 in the Wayne County tax foreclosure auction. Cella would not comment on the buy beyond saying he represents a private Canadian investor group. Judging by what has been happening in Detroit real estate and development in the last few years, the Daniel Plainview-esque purchase seems like a fairly solid investment.

Detroit’s Packard Plant heads to second round of auction with starting bid of just $21,000
In that same county auction, the Packard Plant did not receive the same love that properties in North Corktown did. It finished round one with no bids, and heads to a second round next month, when its starting bid will be just $21,000. At the same time, an Illinois developer so far has not come through with the money needed to pull it off the auction block.

Detroit is number one market in the country to buy rather than rent, report says
It is 65 percent cheaper to buy a house in Detroit than it is to rent an apartment, according to Trulia. That rate put the Motor City at the no. 1 spot on the real estate tracking and listing website’s “Rent vs. Buy: Which is Cheaper for You?” report this week.

Detroit’s Grand Circus among seven North American tech hubs adopted by Google
Detroit is getting a stop along technology giant Google’s seven-city networking route that aims to connect entrepreneurs and start-ups in North America. The Google For Entrepreneurs program is launching in Grand Circus, a tech training venture that opened in the Broderick Tower last month.

28 business leaders come together to tout Detroit’s $250 billion ‘bright future’
Prominent Detroit business leaders representing 28 companies and organizations, which in turn represent a market capitalization of $250 billion, have come together and signed an ad that debuted Sunday in the New York Times, Washington Post, Detroit Free Press and Detroit News. The full-page ad declares, “Here’s $250 billion that says the city of Detroit has a very bright future,” and then argues why the city is far from dead.

Photos: New company launches in bank vault after designing prominent Detroit office buildings
At its new home in the 129-year-old vault beneath downtown Detroit’s Chrysler House – formerly the Dime Building – dPOP!’s designers have scavenged for items to repurpose alongside its new neon furniture and other bric-a-brac brought in from the outside (see photos).

State to announce $100,000 in grants for Detroit food programs
The Michigan Economic Development Corporation (MEDC) will announce $100,000 in grant money for Detroit’s local food system at a press conference at Eastern Market on Tuesday, Oct. 1.

Video: Metro Detroit-based ePrize’s in-house band competing in finals of international ‘Battle of the Corporate Bands’ this weekend
ePrize’s loose-knit but evidently apt in-house band, Toybox, is among the final eight to compete this weekend in Cleveland at the Rock and Roll Hall of Fame on Saturday.

David Muller is the business reporter for MLive Media Group in Detroit. Email him at dmuller@mlive.com or follow him on Twitter or Facebook.

Article source: http://www.mlive.com/business/detroit/index.ssf/2013/09/developing_detroit_lone_buyer.html

Banks recruited to stop scams on seniors

Just one year ago, the U.S. Government Accountability Office reported that it could not find any federal requirements for banks to train tellers and others to spot or report elder financial exploitation.

To be sure, many banks and credit unions try to prevent such fraud through various efforts. But increasingly, banks are being told that their employees are part of the solution on the front lines to stopping financial abuse.

Federal regulators joined forces Tuesday to issue guidance to clarify that privacy rules don’t trump common sense for reporting suspected elder abuse to law enforcement officials or state adult protective services agencies.

“Older Americans are all too often victims of financial exploitation,” said Richard Cordray, director of the Consumer Financial Protection Bureau. “They make attractive targets because they often have higher household wealth — whether it is in retirement savings or home equity.”

Families caring for older relatives know too well about the constant fear that some outsider, or maybe even a relative up to no good, might find a way to get a senior’s ATM card and PIN.

Or maybe a friendly-sounding con artist can convince an older adult to wire $4,000 to cover taxes for his or her so-called winnings on a big sweepstakes. And maybe those calls about a big sweepstakes win just keep coming and coming — and the senior keeps on sending money.

Ann Langford, program manager for the Area Agency on Aging 1-B, a non-profit that supports services for older and disabled adults in metro Detroit, said in the tough economic times some family members have sought to fix their own finances by coercing an older relative to hand over cash.

“They may have a loved one who has money,” Langford said.

She noted that banks often want to protect their customers, but she said it may help to have the privacy regulations clarified so some tellers know what’s allowed.

A “No Excuse for Elder Abuse” campaign was launched last March in the metro Detroit area and included a tip that involved asking a bank manager to train tellers on how to detect elder financial abuse.

“It’s a stealth crime that just needs to have a spotlight on it,” Langford said.

SIGNS TO WATCH FOR

What are some signs that might trigger a suspicious-activity report at a financial institution? Regulators said it could be lots of stops at the ATM for withdrawals that hit the daily maximum allowed on that account. Or a sudden onslaught of bounced checks, which might indicate an unexpected loss of money.

Are there debit transactions that don’t seem to make sense for an older adult? Is the older adult wiring large sums of money out of the blue? Did the elderly customer show up at the bank window and close a certificate of deposit, even though a large penalty would be paid for early withdrawal before that CD matured?

Why the guidance now? Cordray and other regulators said financial institutions had expressed concern that they couldn’t take action without violating the Gramm-Leach-Bliley Act, which establishes how and when a financial institution can disclose non-public personal information to third parties not affiliated with the institution.

Richard Riese, senior vice president of the American Bankers Association’s Center for Regulatory Compliance, said the guidance helps confirm privacy rule interpretations that banks have been relying on to report elder financial abuse.

Some other possible signs of abuse include when the bank is unable to speak directly with the older adult, despite repeated attempts to contact him or her. Maybe a new friend suddenly begins handling the money for a senior without proper documentation.

Financial exploitation is defined as illegally or improperly using an older adult’s money, property or other assets. Older adults can lose money through exploitation by relatives, caregivers, scam artists, financial advisers, home-repair contractors, guardians and others.

SUCCESS STORIES

But sometimes, there’s a little hope that not every scam out there will successfully tarnish a senior’s golden years. Debbie Matz, board chair of the National Credit Union Administration, said some credit unions have had success at being watchdogs for their customers’ money and prevented elder financial fraud.

One credit union in Colorado, for example, stopped an 85-year-old from losing $50,000 to one financial exploitation trap.

Stopping the money from ever being handed over to an abusive relative or a con artist is essential. Some seniors are too upset or frail or just too embarrassed to take legal action. And the scammers — whether they’re down-on-their-luck relatives or con artists overseas — know that one too well.

TIPS FOR AVOIDING SCAMS AND WHERE TO FIND HELP

• The National Center on Elder Abuse lists government agencies in individual states that can help.

• Some seniors have lost money to the “Grandparents Scam” where someone phones or e-mails and pretends to be a grandchild in trouble in Canada or overseas. The elderly person might be convinced and may wire money or send a prepaid debit card to help.

• Seniors need to beware of “freebies.” The Better Business Bureau serving eastern Michigan reports that scammers now are offering seniors $3,000 in “free groceries savings certificates” along with a free medical alert bracelet. The scam may lure people to give away bank account information.

• Con artists also may attend the funeral service of a stranger claiming that the deceased had an outstanding debt with them, according to Better Business Bureau reports.

• Seniors may be targets of reverse mortgage scams. The Federal Bureau of Investigation’s website noted that victims are offered free homes, investment opportunities and foreclosure or refinance assistance. They are also used as straw buyers in property-flipping scams. Seniors are frequently targeted through local churches and investment seminars, as well as television, radio, billboard and mailer advertisements.

Source: Detroit Free Press research

Article source: http://www.usatoday.com/story/money/columnist/tompor/2013/09/28/senior-scams-banks-abuse-retirement/2870605/

St. Paul housing issues dominate Ward 1 council race

More than 100 vacant lots dot St. Paul’s Frogtown, and to the chagrin of neighborhood activists, many of them are owned by the city.

The situation isn’t much better next door in the Aurora- St. Anthony and Summit-University neighborhoods, where some residents have rallied — with mixed results — to get the city to fill empty plots of land or rehabilitate rather than demolish eyesore properties.

St. Paul is studying a $13 million, four-prong strategy for selling or building on vacant lots and fixing up foreclosed properties in Frogtown, Payne-Phalen, Railroad Island, Dayton’s Bluff and West Seventh Street.

The seven candidates for the Ward 1 seat on the St. Paul City Council have taken notice of the empty spaces and have proposed a bevy of their own strategies for filling them. The ward spans Frogtown and Summit-University, as well as parts of surrounding neighborhoods.

There is no incumbent running. Ward 1 council member Melvin Carter III resigned in July to take a state position. Interim council member Nathaniel Khaliq is not seeking election. The council election will be held in November.

Here’s a look at the candidates:

MARK VOERDING

“The city needs to stop its tear-down-at-any-cost policy,” said Mark Voerding, a longtime district council organizer who is taking aim at the city’s so-called “Bostrom ordinance.” Under the ordinance, Category 3 homes — those in the worst condition — cannot be sold until brought up to code.

When the housing market was hot, the goal was to prevent speculators from snatching up broken-down homes at a pittance, covering them with fresh paint and unloading them to unsuspecting buyers at inflated prices. In a sluggish housing market, the ordinance has created a glut of dilapidated housing that cannot be sold, leaving the city with few choices but to condemn and demolish, he said.

Voerding hopes to modify the ordinance so Category 3 homes can be put on the market. Under existing city policy, “the Ramsey Hill neighborhood and the Irvine Park area would have been leveled, because those houses couldn’t be sold. People in Ramsey Hill and Irvine Park bought those properties … and they rehabbed the homes.”

He’d like to see more historic districts within the ward, but with modified rules allowing vinyl siding and other modern improvements that a typical historic district might not allow.

NOEL NIX

Noel Nix, a legislative aide to Carter, acknowledges that Frogtown and Aurora-St. Anthony were hit hard by the foreclosure crisis. He’s working on the new Frogtown-Rondo Home Fund, a collaboration between the city and housing nonprofits to take a targeted approach to filling vacant, city-owned lots.

He said the goal is to “work smarter, not harder” by focusing resources.

The fund, modeled after the Northside Home Fund in North Minneapolis, aims to create new home-ownership and rental opportunities for working families by pooling existing redevelopment efforts in six-to-eight-block areas around key locations, such as a park or school. The current “cluster strategy” would focus on blocks around the Church of St. Agnes on Thomas Avenue, Jackson Elementary School on Edmund Avenue and Maxfield Magnet School on Victoria Street.

Nix, a former property manager who holds a master’s degree in urban planning from the University of Minnesota, said it would be cheaper to rehab some homes than demolish them and build anew on the same plot, but not every circumstance is so cut and dried.

JOHNNY HOWARD

Johnny Howard, a longtime community organizer, believes the city is labeling too many homes as Category 3. That makes borrowing money for improvements even more difficult, he said.

“We’ve got houses that are 70 to 80 years old,” Howard said. “Bringing them up to today’s code is nearly impossible. We don’t want to take away people’s ability to rehab them.

“If you want to sell a (Category 3) property, you should be able to sell it, but if I buy it, I should know ‘you can’t sit on this property,’ ” he said. The buyer should be given a timeframe to plan repairs, he said.

He’d also like to see programs offer low-cost improvements to surrounding homeowners.

“I think we’ve been condemnation and demolition happy,” he said. “We need to revisit the whole process of what we’re condemning, and what that means.”

He said he supports a city strategy to sell “sliver” lots that are too small to develop to community organizations or neighboring property owners for gardens or green space.

He says the ward is becoming top heavy with new rental properties, and the city should take care to make sure its vacant lots are occupied by a better balance of owner-occupied homes.

KAZOUA KONG-THAO

Kazoua Kong-Thao, former chair of the St. Paul school board, doesn’t buy arguments that Ward 1 has too much rental housing.

“If families can’t afford to purchase a home, what are they going to do?” she said. “Of course they’re going to rent.”

Pointing to the popularity of the Frogtown Square/King’s Crossing senior development at University Avenue and Dale Street, she said she’d like the city to focus more effort on bringing a wider range of housing types to the ward.

“We have a large baby-boomer population, and we need to accommodate them,” she said. “I don’t think there’s enough affordable housing, especially in this area. We have a growing population of seniors who want to downsize.”

Kazoua Kong-Thao said the city needs to step up enforcement of homes owned by absentee landlords, but she did not agree that too many homes have been demolished by the city.

“A lot of the homes in Ward 1 are old,” she said.

“Most of the foreclosures in St. Paul have been concentrated in four main areas, and Frogtown is one of them,” she said, calling job creation key to housing stability. “Many of the residents have the highest levels of unemployment and the lowest levels of education.”

DAI THAO

Dai Thao, an information technology specialist, said the city has not gone overboard with demolishing vacant and condemned properties.

The former organizer with the interfaith housing advocacy group ISAIAH said the city should focus on job creation and other prevention strategies to keep homes from being vacated in the first place. Among them, St. Paul should buy houses from homeowners facing foreclosure.

“I’d like to see a ‘buy-back, sell-back’ program where we look at underwater houses. The city would buy the houses and sell them back to the owner at a different (mortgage interest) rate,” Dai Thao said. “We can use eminent domain to do that. … When you have families moving around, that destabilizes a community. We have to do everything we can to keep residents in their homes.”

He would also like the city to do “a more thorough job of connecting residents to existing programs that can save energy costs and (provide) wheelchair accessibility.”

Dai Thao praised the city’s efforts to build affordable senior housing connected to retail shops at Frogtown Square/King’s Crossing. “That way, we’re helping the small businesses. It’s self-sustaining.”

PAUL HOLMGREN

Paul Holmgren, an Office Max sales associate, says the city’s best bet on housing issues would be to butt out.

“The city should not own or manage any residential property” or residentially zoned property, he said. “Those lots should be sold back to the private market.”

He points out that the seven members of the St. Paul City Council also convene as the city’s Housing and Redevelopment Authority, which makes key decisions about how public money is distributed to developers. “Why isn’t there a housing board that votes on those issues?”

Holmgren, however, isn’t quick to blame the city for demolishing condemned houses. “Yes, they’re tearing down a lot of housing, but there’s certainly a logic to it,” he said, noting that they are problem properties, some with pest-control issues.

“There was one house where they took 100 cats from the home,” he said. “Nobody could live there, so they had to tear the house down.”

He took a dim view of the city’s efforts to build affordable housing. “My concern is we’re going to have so much housing, we’re not going to know what to do with it, and it’s going to drive the value of the single-family home down,” Holmgren said.

DEBBIE MONTGOMERY

Montgomery could not be reached for comment.

Frederick Melo can be reached at 651-228-2172. Follow him at twitter.com/FrederickMelo.

Article source: http://www.twincities.com/stpaul/ci_24191402/st-paul-housing-issues-dominate-ward-1-council

What did the White House promise to Detroit? Here are the details

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Article source: http://www.freep.com/article/20130927/NEWS01/309270133/white-house-detroit-revitalization-blight-public-safety

Help On The Way For Marylanders Facing Foreclosures

Fighting a foreclosure? You’re not alone.  And a new program is on the scene to offer help. 

Marylanders who already have been through HAMP, HARP and the HOPE hotline—state and federal programs to try to stave off foreclosure– got some good news Friday.   A Massachusetts non-profit that has helped hundreds in that state avoid foreclosure is setting up shop here.

Boston Community Capital announced it will bring its SUN initiative—Saving Urban Neighborhoods—to Maryland.

SUN’s Elyse Cherry said they try to buy homes from foreclosing lenders at the current market price, which often is substantially lower than the original price, but “frankly, it’s the only amount of money anyone will pay the lender.”

“So, we buy for that price and we turn around and sell it to the homeowner,” she said.

She said that reduces the homeowner’s principal by almost 40 percent on average and makes the monthly payment lower. It’s a technique housing advocates and activists have been pushing for years, but lenders and investors have resisted.

Cherry said SUN decided to come to Maryland because the state has seen a spike in foreclosures and state officials were receptive to the idea.

The program started with money borrowed from high net worth individuals, philanthropic organizations like the MacArthur Foundation, and some government money. 

“We initially raised $50 million to do this work,” Cherry said. “But now we have taken the income – the principal and interest payments that each homeowner makes every month –and have re-capitalized the undertaking so that we have more funds.  So what we think is that we have an evergreen source of capital.”

SUN has had an occasional customer who pays late, she said, but they have had to foreclose only once in three and a half years.

In addition, SUN has streamlined its process by hiring employees they trust to see things through and who won’t lose paperwork.

“It does require a significant effort to what we call manually underwriting people, meaning you can’t just put folks through some automated process,” Cherry said. “It can be a labor intensive undertaking.  We’ve been able to build up a set of systems to get people through the process efficiently.  We don’t lose their paperwork – it tends to be a borrower friendly process.”

With 15 employees, Cherry said she expects to do $50 million worth of lending in Maryland in the next year.  And then she’d like to expand to other states like Florida, Nevada, California, and Illinois, which are among those hardest hit by the foreclosure crisis.

Foreclosures in Maryland have spiked over the last year. According to RealtyTrac, about 12,000 properties were foreclosed upon from January through August last year, compared to more than 28,000 properties during the same period this year.

So, though many greeted SUN with open arms, the initiative’s track record in Massachusetts–400 homes in 3 and a half years—won’t be nearly enough.

Marceline White, executive director of the Maryland Consumer Rights Coalition, said she’s happy to see another non-profit on the scene, but questioned why the lenders aren’t making principal reduction loans. 

“What you’re seeing is the private and non-profit sector basically playing the role the banks should be playing” she said. “And you’re not seeing the government playing the role that it should – in terms of enforcing the actions of the banks and having consequences that are meaningful enough to make the banks change their course of action.”

Maryland received $1.3 billion from the Attorneys-General National Mortgage Settlement.

White said she’d like to see more done with the money to keep homeowners in their homes and more of a push from Maryland Attorney General Doug Gansler to get the banks to offer principal reductions and refinancing, like she’s seen in other states such as New York and Florida.

Article source: http://news.wypr.org/post/help-way-marylanders-facing-foreclosures