Mayor Chris Coleman and the Saint Paul City Council announced several initiatives to address rising foreclosures and abandoned properties. As the City prepares for legal action against property owners the City has issued a letter to all property owners and servicers outlining legal options the City is prepared to take to ensure that foreclosed properties are safe, secure, and remain assets to the neighborhoods. Below is the Press release from the Mayors office and and article from The Pioneer Press.

Press Release:  

Saint Paul Takes Bold Steps to Address Foreclosure Crisis
Mayor, City Council prepare for legal action against irresponsible vacant property owners

SAINT PAUL . Mayor Chris Coleman and the Saint Paul City Council announced today that the City has taken specific measures to increase its capacity to respond to the foreclosure crisis. Combating the increased threat rising foreclosures pose to destabilizing neighborhoods, the Mayor and several members of the City Council laid out steps the City is taking, including reorganizing a department, increasing counseling staff, and retaining the services of Mark Ireland of Housing Preservation Project, Inc. (HPP) as special counsel to explore and recommend various legal strategies to the City Attorney.

Mortgage foreclosures continue at a staggering rate across the nation, resulting in blocks of boarded vacant and abandoned properties in some of the hardest hit areas. Not only do cities lose significant money in property taxes on these homes, but the properties drain budget reserves because of the costs to board the homes, to increase police and fire-fighting intervention, and, in some cases, to demolish the houses. Under the City.s current abatement system, many of these expenses can.t be recovered.leaving Saint Paul taxpayers to pick up the bill. 

.Owners of vacant properties are robbing our residents of resources and blighting our community. Saint Paul is a city of strong neighborhoods, and we will back up that strength with all the resources we can to fight the elements that have little disregard for what’s right,. Mayor Coleman said. Today, we are sending a clear message that the City of Saint Paul will no longer tolerate irresponsible owners. The City is fully prepared to aggressively pursue negligent vacant property owners to the fullest extent of the law.

Most significantly, the Mayor and City Council announced the retention of Mark Ireland, staff attorney for the Foreclosure Relief Law Project of the Housing Preservation Project. The Housing Preservation Project is a nonprofit interest advocacy and legal organization whose primary mission is to preserve and expand affordable housing for low-income individuals and families.

The Foreclosure Relief Law Project seeks to develop legal and policy strategies to respond to the foreclosure epidemic by complementing the work of various public and philanthropic entities seeking to ameliorate the effects of mass foreclosures in the Twin Cities Metropolitan Area.

Mark Ireland, a graduate from the University of Minnesota School of Law, has represented people in a wide variety of consumer protection, health care, privacy and fraud cases. As an Assistant Attorney General for the State of Minnesota, Ireland worked in the Consumer Enforcement Division investigating and civilly prosecuting real estate developers, mortgage brokers, used car dealerships, telemarketers, debt collectors and HMOs. Ireland has spoken locally and nationally on consumer protection matters, and was named a .Rising Star. by Minnesota Law & Politics magazine. He is also an Adjunct Professor of Law at Hamline University.

Ireland will work with the City Attorney.s Office to explore and recommend various legal strategies to bring mortgage lenders with a significant number of vacant properties to the table to deal with the maintenance and nuisance factors associated with those properties. Not unlike other cities, Saint Paul has found that a there is a small percentage of owners, mainly lenders, who control a majority of the vacant properties.

We are pleased that Mark has agreed to help us find the best tools to encourage mortgage lenders to take responsibility for their properties,. said Council Member Russ Stark. His work will complement the efforts City staff, community development corporations, and other community partners are taking to combat this problem.

To begin this effort, the City Attorney.s Office issued a letter to all property owners in violation outlining legal options the City is prepared to take to ensure that these foreclosed properties are safe, secure, and remain assets to the neighborhoods.This letter makes it clear that we expect owners of vacant properties to be accountable to their neighbors and to contribute to the rehabilitation and stabilization of neighborhoods,. City Council President Kathy Lantry said. .If we have to force them to act responsibly, we will.

Vacant property owners must recognize the detrimental impact their neglect has on our community and step up to repair these properties or sell them to buyers who are willing and able to restore them for re-occupancy,. said Council Member Melvin Carter. We will no longer allow owners to choose to let their properties sit idle and erode the fabric of our neighborhoods.

In addition to the retention of Ireland, the Mayor and Council also announced the creation of a standalone Mortgage Foreclosure Prevention division within the Department of Planning and Economic Development that can effectively prioritize the City.s prevention, intervention, mitigation and remediation efforts. To support this effort, the City has hired 4.5 full-time employees and secured funding for two more.

Our dedication of additional resources will improv the City.s capacity to reach at-risk homeowners facing foreclosure, help keep families in their homes, and enhance our community stabilization efforts,. Mayor Coleman said.

Through the continuing efforts of the Invest Saint Paul initiative, the City has dedicated $17 million of original STAR funding to address neighborhood issues that are a direct result of disinvestment and mortgage foreclosures. Funding covers costs associated with property acquisition, strategic removal, enforcement, and rehabilitation. Currently, 22 properties have either been acquired or have accepted purchase agreements; eleven have offers outstanding; and an additional 18 have been identified for acquisition, pending the completion of background work necessary to move forward with offers.

Some of the ongoing and planned outreach activities include:

• Designating and promoting alternative locations, in collaboration with community organizations, where foreclosure prevention counselors can conveniently and effectively provide assistance to residents.
• Continuing targeted mailings, informational sessions and educational workshops to reach at-risk homeowners.
• Staffing a dedicated call line to provide personal and timely assistance to homeowners facing foreclosure. 
• Continuing to work with lending partners to assist in refinancing and new product development.
• Developing and supporting legislative initiatives that insure protection and rights of homeowners and tenants.
• Developing incentives for new homeowners and renters wanting to live in the City of Saint Paul.

Pioneer Press Article

St. Paul goes after national lenders in effort to battle foreclosure blight

The city of St. Paul, grappling with a growing list of abandoned buildings now 1,700 homes long, is taking a swing at national lenders in a stepped-up effort to tackle the foreclosure crisis.

A highlight of the city's game plan, announced Wednesday, is hiring a lawyer from the St. Paul-based Foreclosure Relief Law Project to advise on legal strategies to turn the screws on lenders such as Wells Fargo & Co., U.S. Bancorp and Deutsche Bank AG.

The city said a small group of large lenders is responsible for many of the abandoned properties St. Paul is struggling with, neglecting the buildings and leaving them to deteriorate.

"We want to be clear: If they don't come to the table, we're going to go after them," St. Paul Mayor Chris Coleman told reporters.

Some of the companies reached Wednesday said they aren't legally responsible for the vacant properties. Others said they intend to work with the city to address the problem.

Coleman and City Attorney John Choi stopped short of saying they will sue the lenders, as other cities have, but said they have given lenders 30 days to articulate a plan for fixing up and reoccupying the abandoned homes they own or control.

The letters, dated April 8, were mailed to Wells Fargo & Co., Deutsche Bank, U.S. Bancorp, HSBC Bank USA, JPMorgan Chase & Co. and the industry-owned electronic mortgage registration system known as MERS.

Together, the group owns or controls about 447 vacant buildings in St. Paul, according to city figures, roughly one-quarter of the 1,706 houses and duplexes on the city's official vacant building list.

If the letters fail, the city will pursue other legal options, Choi said. The city has hired Mark Ireland, a staff attorney at the Foreclosure Relief Project, to help lay out the legal strategy. "Stay tuned," Choi said.

In January, Ireland's group helped the Hawthorne neighborhood in North Minneapolis sue mortgage giant CitiMortgage over a vacant house that became a community eyesore and caught on fire.

St. Paul appears to be borrowing a page from the foreclosure playbook used by the cities of Cleveland and Buffalo, N.Y. Those cities have sued major lenders and servicers in recent months, accusing them of failing to take care of properties after foreclosure.

Susan Davis, executive vice president of retail business for Wells Fargo, said she hadn't seen the city's letter but said news of it surprised her. The letter says Wells Fargo owns or controls 64 vacant buildings in St. Paul.

"We have been at the table with Mayor Coleman's office, and we will continue to be with them," Davis said.

R.K. Arnold, president of MERS, based in Vienna, Va., said in a statement it plans to meet with city officials. "It is our responsibility, and we're going to fix the problem," the statement said. MERS, primarily owned by government-sponsored mortgage-buying giants Fannie Mae and Freddie Mac and Countrywide Financial Corp., owns or controls 143 vacant buildings in St. Paul, the city says.

It's not always crystal-clear just who is responsible for what in the convoluted world of securitized mortgages. When the pools of loans were created, so were trusts, with trustees designated to represent investors and loan servicers typically designated to manage the mortgage payments and the properties. Loan servicers are the companies homeowners write their monthly mortgage check to.

Neither the trustees nor loan servicers legally own the mortgages, several lenders said, but the loan servicers typically are responsible for managing and foreclosing on properties and handling them afterward.

In most mortgage securitizations, the legal owner of the loans in each pool is the trust created with it, said Bryan Calder, executive vice president in corporate trust at U.S. Bancorp. The trust, however, is a legal entity — a piece of paper, for the most part.

Spokesman Steve Dale said U.S. Bancorp is a trustee and doesn't legally own the 94 properties on the list St. Paul officials attached to it.

The legal agreements for trusts, called "pooling and servicing agreements," typically spell out that it is the loan servicer's responsibility to maintain a home after foreclosure, keep the grass cut, pay property taxes and get it reoccupied, said Deutsche Bank spokesman Ted Meyer.

The loan servicer's name rarely appears on foreclosure documents, but the trustee's name does, causing a great deal of confusion, he said.

The issue of which entity is responsible for foreclosed homes has been raised in other cases. In October, a federal judge in Ohio threw out 14 foreclosures because Deutsche Bank National Trust, as trustee, could not prove it owned them.

Choi said Wednesday that St. Paul considers the named lenders the owners of the vacant homes.

The rest of the city's plan includes adding foreclosure counselors to help homeowners and directing $17 million of Sales Tax Revitalization program money to address neighborhood issues related to foreclosures.

To view the online article, please click here

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 450 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.