Council discusses next steps in foreclosure process

The common council and controller discussed the progress of the city’s foreclosure process at a committee meeting on Tuesday. Council members looked at a list of just under 400 properties whose owners have yet to either pay off their back taxes or enter into a payment agreement with the city.

According to Controller Matthew Agresta, the purpose of providing the list was so that the council could review it and ask questions, but the council could not make any changes to the list.

“All you’re doing is reviewing it…this list is what’s going, unless we find out that somebody that actually paid, we didn’t remove. That’s the only change that’s going to be made at this point,” said Agresta.

Agresta said he hopes to  submit the list to the Montgomery County court by the end of the week. The court will make the final decision to transfer ownership of the listed properties to the city.

There was some concern expressed by Agresta and other council members as to whether County Judge Felix Catena would be available to make a decision before the end of the year. Agresta said he would look into the possibility of having County Supreme Court Judge Joseph Sise make a decision on the properties.

Alderman Ron Barone brought up a case he was familiar with where an owner whose property is being foreclosed on is trying to sell the property before the property goes to auction sometime next year.

Agresta said that by law, the city cannot accept any payments for back taxes from the properties on the list from November 20, the date of last redemption, until the date the county court decides to transfer ownership of the property to the city.

“If he sold it tomorrow…that new owner would lose interest once we took ownership,” explained Agresta.

Council members discussed the possibility of allowing previous owners to re-claim their properties before they were auctioned off by paying the taxes in full, once the city had taken ownership. Agresta said he would look into what was involved with re-conveying properties to their previous owners.

Alderman Elect Jim Martuscello added that based on his recollection of previous foreclosure auctions, that once a property has been listed for auction, the auction provider would still seek to collect a buyer’s fee if the property was transferred to someone else by the city before the auction took place.

Last week, the council voted to select (a partnership between Haroff Auction and Realty and Absolute Auctions and Realty) to handle the city’s upcoming foreclosure auction sometime next year. However, a contract with the city has yet to be negotiated and signed.

Alderwoman Diane Hatzenubuhler said she wants to make sure that there will be a lease agreement ready to present to occupants of foreclosed properties as soon as the city takes ownership. The lease would cover the time between when the occupied properties are acquired by the city to the time it is acquired by a new owner.  She said she is concerned that some landlords may continue to pressure tenants to pay rent to them even during the time the city has ownership.*

Council members agreed to look at a draft lease agreement provided by Corporation Counsel Gerard DeCusatis with a goal of approving the agreement’s wording by the last regularly scheduled common council meeting on December 15.

* This paragraph has been edited to clarify the intent of the lease agreement is to cover the time period when the city has ownership of the properties

Tim Becker

Tim Becker is the owner of Anthem Websites Inc. which publishes The Compass. He serves as both editor and a writer.