Officials in North Adams MA struggle to address rising foreclosures and abandonment. The following report in The Berkshire Eagle discuss some of the difficulties which is causing the city to contemplate the creation of a Vacant Property Registration Ordinance.

Officials eye vacant buildings

ADAMS — The town's code enforcement officer is facing a growing issue with multifamily buildings that have been foreclosed and abandoned, which now stand as vacant, potential trouble spots for vandalism or mischief by adventurous youngsters.

"We have a number of vacant and abandoned properties that are popping up," said Scott F. Koczela, Adams code enforcement officer. "Some of them we know about and some of them we don't. Overnight, they're being foreclosed and people are just moving out and leaving them."

Most of the foreclosures were on subprime predatory loans gone bad.

Once notified of the foreclosure, some renters of the dwellings are left on their own.

"They take what possessions they want and just leave the building, move in with family, or rent somewhere else," Koczela said. "It's not their problem anymore."

Others are a bit luckier — they are offered a tidy sum to relocate.

According to Jennifer Segala, owner of Steepleview Realty, the banks don't want the liability of occupants in these foreclosed structures. So they require their property agents to take care of the "pre-listing phase" in which they find out whether there are occupants.

"Unfortunately with a lot of these properties they are immediately processing evictions," Segala said. "So we'll verify that there are occupants, knock on the doors, tell them what the process is, and offer them cash for keys.

— a lot of them get $2,000 in cash. It's actually pretty nice and it helps with placement. It's not totally heartless."

In North Adams, officials are seeing the same issue growing.

According to Mayor John Barrett III, when a property is foreclosed and vacant, it causes a "ripple effect."

"We have squatters starting to live in some of those places, trespassing, vandalism, animals getting in them," the mayor said. "We're trying to stay ahead of it."

North Adams officials are securing the buildings, and putting a lien on the property for the expense.

"We've taken a couple of those properties ourselves, and we're in the process of deciding whether to renovate them or take them down," he said. "It's not overwhelming, but is it a major league problem that sometimes gets ahead of us? Yes."

Adams town officials are working with mortgage holders, the banks, to keep the properties secure.

"The problem we're having now is doing the detective work to find out who is the responsible party — the deed-holder and their local agent," Koczela said.

In holding the deed-holders responsible, Adams officials are enforcing a new ordinance regarding the maintenance of vacant structures. Koczela has nuisance orders out on five properties, with as many approaching that state.

"Those are just the ones I'm dealing with right now. There are a lot more out there," he said.

The problem takes shape when subprime mortgage payments balloon, causing extreme delinquency of payments and setting the foreclosure process in motion. When the bank takes ownership, the properties may remain vacant until the town cites the bank for an unsecured premises. In response, the bank hires a local real estate firm to hire contractors to board up the doors and windows while they try to sell the building.

It's a slow and costly process for all parties involved.

The mortgage holders are not local banks. They are large lenders, like Freddie Mac, HSB and Wells Fargo, Koczela said.

"These banks were never in the business to become landlords or to own these properties, so what they're doing is holding off and hoping nothing comes up so they don't have to spend anymore money securing or maintaining buildings," Koczela said. "And they're not very helpful at all."

At first, Koczela tried calling the banks to work out a solution. But after getting passed around from one office to another, Koczela figured out that it just "drags the process out." Now he issues a citation right away, which has gotten quicker response from the banks.

"When they receive the certified mail and it become evident that we've put this in writing and legal action is soon to follow," he said, "they tend to go and take care of the situation."

The cost of repairs and boarding up the property may not be reimbursed for 60 to 120 days, Segala said. Sometimes the cost is never paid, she said. And all the footwork and time spent by the real estate agent in securing and selling the property is not compensated until the property actually sells. For some properties, that could be a very long wait.

Segala said some of the multifamily properties are selling fast, but only if they're priced to sell. Owners trying to sell the parcel at the value of the foreclosed mortgage may not have a sale for quite some time.

To view the online article, please click here.

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