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Posted on Fri, Oct 21, 2011 : 5:58 a.m.

Ypsilanti Township takes aim at national banks neglecting local homes

By Tom Perkins


1240 Davis St.

Tom Perkins | For

Banks neglecting homes they own through foreclosure is is an increasingly challenging issue Ypsilanti Township and other communities across the country face, officials say.

On Tuesday, animal cruelty investigators from the Humane Society of Huron Valley checked live traps for the last of more than 30 cats they hoped to capture that were living at 1240 Davis St. in Ypsilanti Township.

The home had been foreclosed on in April and was now owned by Nationstar Mortgage. NationStar enlisted the services of Equator, a brokerage firm that finds local real estate companies to market foreclosed homes for national banks and companies.

The local real estate company, The Drake Team, discovered the cats, dogs and other animals living in the home and contacted the HSHV, which in turn contacted the township's office of community standards to inspect the home for code violations.

Township officials discovered cats living in the walls and ceilings, and there were several inches of animal feces covering the floor. Officials say Nationstar is responsible for the home, but, like numerous other bank or mortgage company-owned properties in the township, it went neglected.

The house likely will have to be demolished, and officials from Nationstar will not respond to the township’s requests to clean up or demolish the home, officials say.

“Here we are and the taxpayers are going to have to foot the bill to abate the nuisance for good of community,” said Mike Radzik, director of the office of community standards.

In the last several weeks alone, township officials have requested the Board of Trustees approve legal action on four bank-owned homes that are in various states of decay.

“It’s almost every day that there’s another one here, another one there,” Radzik said. “Some aren’t too bad, some are terrible.”

Township Attorney Doug Winters took aim at the banks that accepted taxpayer bailout money but have failed to care for local homes they own.

"It's outrageous that they don’t deal with these properties," he said. "We’re going to need some help from the federal level because the issue keeps growing, and these companies are so incompetent when it comes to tracking their own inventory. There has to be some accountability for these banks, and they need to quit dropping all the responsibility on local municipalities."

Several weeks ago the township began dealing with a home at 1416 Blossom St., which is owned by the Bank of New York Mellon based out of Plano, Texas. The issues there include rotting food left in the kitchen, a mold problem that made it impossible for neighbors to sit outside during the summer and a cockroach infestation that spilled over onto neighboring properties.

The real estate agent and township’s attempt to contact NY Mellon to have them send out a crew to address the issues received no response.

A home at 7331 Essex St. owned by Wells Fargo Bank presented township officials with a typical story. The home had been foreclosed on, its occupants left, but the water remained on. When pipes froze and burst in the winter or the sump pump quit working and the basement filled with water, mold began to grow.

Neighbors complained about the home, which is six years old, and, according to a verified petition filed in Washtenaw County Circuit Court, township building inspectors are finding water levels rising and mold growth accelerating. The home was left unsecured, and wild and dead animals were found inside.

The township is asking a judge to declare the property a public nuisance and order it to be cleaned and cleared of mold. The township also is asking the judge for permission to complete the project if Wells Fargo fails to respond to the order. In such a scenario, Wells Fargo can be billed and a lien placed on the property if the bill goes ignored.

Kevin Heine, a spokesman for Bank of New York Mellon, said his company is only the trustee on a bundle of mortgages called securitizations. Investors buy these bundles, and the Bank of New York Mellon distributes monthly payments to the investors and only acts in an administrative role.

Heine said the bank has no powers or duties related to the actual home. So while the foreclosure action may be brought in the trustee's name, Heine said, the responsibility of managing the home lies with the servicer, which is usually a different large bank, in this case Bank of America.

Bank of America did not return calls for comment.

In some cases, banks walk away from properties and the homes go into tax foreclosure, Radzik said. That extinguishes the lien on the property, and taxpayers are never reimbursed for the bill.

There are other costs associated with the efforts. Officials often don’t know who owns the home and must pay several hundred dollars for a title search, and securing vacant homes also costs several hundred dollars. There are also the legal costs.

One tactic many banks use to avoid responsibility is to claim their homes are still in a redemption period and say they don’t have the legal authority to enter the house. That leaves the township with no options except legal action, though Radzik said some banks will address issues even if the homes are still in a remediation period.

The township is considering several ordinance changes to give itself more tools in dealing with the issue. Radzik said vacant structure owners may soon be required to register with the township and consent to a code inspection. Owners may also be required to keep utilities on to avoid burst pipes and flooding, which officials say cause the most serious public health issues for neighbors.

Although the banks still might not be responsive, the measures will help the township address issues quicker.

"An ordinance requiring annual registration and inspection of vacant buildings would give us a look at them much sooner, hopefully before advanced stages of blight," Radzik said. "Unresponsive banks would be chased the same as they are now. Once into the system, they would be required to maintain the buildings and we would have the ability to monitor them to prevent further deterioration."

And that could mean the difference between "catching" a cockroach problem and not being directly affected.

“Neighbors shouldn’t have to live that way with the odor, cockroaches, mold contamination,” Radzik said.

In a letter to the Bank of New York Mellon, Winters expressed his frustration with the company, which received $3 billion in bailout money and paid its CEO $20 million in 2007.

“I wonder how long it would have taken the Bank of New York to take the appropriate action to remediate this property if someone on the bank’s board of directors were the unfortunate persons having to live next door and deal with this powerful stench, blight, cockroaches, mice and other vermin, etc. etc.?” Winters wrote.

“It is absolutely astounding and ironic that a bank who received 3 billion dollars in taxpayer bail out money, i.e. TARP funds, would act in such an irresponsible manner vis-à-vis this subject property and (according to the realtor) will not even return a phone call to his office.”


Chase Ingersoll

Mon, Oct 31, 2011 : 4:05 a.m.

Facts: 1. The federal government wrote the lending rules that at best enabled and at worst, required banks to not discriminate in their lending against, people who did not have the income to repay the amounts they borrowed, on property that was worth a fraction of what was borrowed against the property. 2. The federal government received federal taxes on the incomes supported by the housing bubble caused by the rules the government put in place. 3. State and local governments received PROPERTY TAXES at an inflated rate due to properties being more frequently sold (TRANSFER TAXES) and on the inflated values (REAL ESTATE TAXES). 4. State and Local budgets (union contracts with government labor units) were negotiated based upon the increase in revenues from INFLATED property values. 5. The bubble burst, the values fell, but the government wage and benefits packages have yet to fall to the rates prior to the real estate bubble = BUDGET DEFICITS. I think people find it easier to blame institutions because institutions are not personal bothered by criticism as a person would be and accordingly don't respond to the attackers the same way. But if we at least go so far as to identify specific people in the institutions (politicians, bureaucrats, banking executives) how are they any more to culpable than the local borrower who knew or should have known that they were borrowing more than they could repay, but who decided that "equity" was something that they wanted to take out of the property, rather than put into it? I'm no fan of the lenders, but the municipal officials and the neighbors who put them into office, pointing fingers at the lenders is a case of the pots calling the kettles black.


Sat, Oct 22, 2011 : 12:32 p.m.

This story is true and very very False. As a former neighbor of the previous owner I can tell you all to well how we CALLED the HSHV countless times over the past 7-8 months and got nothing out of it. Even the cops showed up on more then one occasion to try and remedy the issue with NO RESULTS. You can blame the bank for this, but there should also be something done for the months that passed while those animals and conditions were reported day after day.


Fri, Oct 21, 2011 : 6:38 p.m.

Add the cost of correcting the deficiencies involved with the nuisance properties to the 'owner(s) of record' tax bill. Define the nuisance by ordinance (like the noxious weed ordinance) and contract the repairs. Get state legislator's involved if enabling legislation is necessary. One more arrow in the quiver! More astounding than the banks receiving 3 billion dollars in taxpayer bail out money ignoring the foreclosed properties is that the Obama administration GAVE away the money, NO STRINGS ATTACHED!


Fri, Oct 21, 2011 : 1:47 p.m.

And people wonder why there is so much frustration by the average Joe. There are so many problems with how things are going in this country right now that nobody even knows where to start.


Fri, Oct 21, 2011 : 2:37 p.m.

People may not know where to start, but look at all the examples of how it ends. The rich and powerful in some countries are paying for their greed. Unfortunately, there's also a cost to those under the golden heels trying to get out from under them.


Fri, Oct 21, 2011 : 1:24 p.m.

Why have the state, counties, townships, cities allowed this to happen that Bank owned homes are treated different then private owned homes? The banks and mortgage companies should be fined if the fines are not paid this homes should be demolished at the owner expense and property auctioned to repay the township. I understand this takes time but it also may keep the banks and mortgage companies from foreclosing on people. Better yet Ypsilanti Township should do an inspection on homes as soon as the bank or mortgage company starts to foreclose on the home and fine them then if the home is not up to code that would help the neighborhoods for sure.

David Briegel

Fri, Oct 21, 2011 : 12:50 p.m.

Imagine that the greed of the Wall St Banksters had nothing to do with this. The crisis is all the fault of some politician or a lot of poor and middle class citizens who attempted the American dream. And every one of them was taking advantage of those poor, naive and innocent bankers. Bankers who make a profit if the market goes up but unlike us honest people they can even make profits when markets go down. And they sold the lie that they were too big to fail. Worse yet, we bought the lie. They had no investment in any community and no interest in any long term investment. They just collected their fees. Free marketeers all in their rigged casino games!

Bernhard Muller

Fri, Oct 21, 2011 : 1:20 p.m.

This was/is not a "free market." In a free market, banks are allowed to fail. In a free market, the government does not offer to underwrite (via Fannie Mae and Freddie Mac) sub par loans. In a free market, people who can't pay back a mortgage are not given one. The bankers who respond to government "encouragement" or who accept bailouts are not "free marketeers".


Fri, Oct 21, 2011 : 12:25 p.m.

I'm all for a: "An ordinance requiring annual registration and inspection of vacant buildings would give us a look at them much sooner, hopefully before advanced stages of blight," As for enforcement of that well good luck. As I see it the problem stems partly because the banks sit on these properties, lets get all these foreclosures GONE, off the books. Prices may temporary drop, but once most of the foreclosures are gone prices will once again rise. For the government to come in an mess with "private markets" disrupts the whole economic process. Stay out of my house Uncle Sam do your job of protecting the people not pampering them. Let the market system work as it was designed to do. I was in Las Vegas last week someone was protesting with a sign that said " Forgive all Student loans", is this what we have come to? If so then it is the end as we know our great nation, if you owe them pay them, if you can't I'm sorry for your bad luck. The very thing that started this whole mess was the Clinton Administration desire to increase the home ownership percentage in America. In short I have no sympathy for the Banks, let them die the death they deserve, the greedy ones we do not need anyhow. Answer me this why would I a taxpayer bail out a bank? Get it together America!


Fri, Oct 21, 2011 : 10:48 a.m.

The banks were interested in taking our equity in homes. They did it by convincing people to put 1st, 2d, 3d mortgages on their homes, egged on by investor and financial "experts" in the media. No bank's mortgage dealings went unrewarded thanks to the great guarantors Barney Frank, Chris Dodd, Bush, Ex-Goldman Sachs exec Paulson and his puppet trainee Geithner among countless others too numerous to list. They don't care about the collateral except to the extent that they will not concede losing the properties--it would expose them to too many investor suits from those foolish enough to have bought into the "collaterized" securities. So, they proceed with sham efforts of foreclosure. This has the dual effect of depressing home values both through underpriced homes that are sold and the many more homes that are left basically abandoned to rot...even in what was considered prime neighborhoods. The fact is the cost to build a modest replacement home far exceeds the prices these homes command--lot and all. The time and materials to replace is far more expensive. That shows that the market IS undervalued. This isn't a reset of the home-selling market back from an inflationary amount. It is a depression of it. That's the term no one wants to use, but it is what it is. A Depression... For years, Detroit was the butt of jokes nationally for all the abandoned homes left behind after the riots. Now, the nation as a whole has become a "Detroit" with abandonment and devaluation well below what it would cost to build and replace. This impacts all of the homes regardless of condition. This is why everyone outside of Washington and the banking sector is angry. Our politicians and bureaucrats know the truth but choose to put their heads into the slippery sands served up by their banking masters. This nation lost its way when its government repealed Glass-Steagall, and chose to cater to the "services" industry over manufactu


Sun, Oct 23, 2011 : 11:56 p.m.

They did it by convincing people to put 1st, 2d, 3d mortgages on their homes, egged on by investor and financial "experts" in the media. and did they put guns to their heads to do it? or was it the greed of the home owners as well?