Saginaw Citizens’ Plan Makes Banks Pay When They Neglect Foreclosed Homes

FOR IMMEDIATE RELEASE

News from SEIU 517M and New Solutions

Tuesday, April 3, 2012

Contact: Cathy Bacile Cunningham, (517) 281-2979, CathyCBC@gmail.com

Saginaw Citizens’ Plan Makes Banks Pay When They Neglect Foreclosed Homes

Ordinance is one of first in Michigan to hold big banks accountable

SAGINAW – Gathered today outside a dangerous foreclosed home abandoned by Bank of America, Saginaw citizens and leaders urged the city to become the first in Michigan to hold big banks accountable by requiring them to maintain foreclosed properties or pay fines.

“If the big banks are going to take homes away from our residents, they have a moral and financial responsibility to prevent those properties from creating blight in our neighborhoods,” said Grady Holmes Jr., lead organizer of Ezekiel Project, a nonprofit community organization.What we are dealing with is a whole new round of exploitation by the banks that foreclosed on thousands of our city’s families in the first place.  It is outrageous that the CEOs of Chase and Bank of America are giving themselves bonuses while our community pays to clean up the damage they caused.”

More than half of the nearly 1,000 foreclosures in Saginaw are bank-owned homes that can sit unattended for months, becoming eyesores, crime magnets and public health hazards. This decline drains city resources and drives down property values, starving the city and schools of much-needed revenue.  The citizens group proposes a Saginaw city ordinance that would require all owners of foreclosed on homes, including big banks, to maintain properties in foreclosure or face fines.

“A strong foreclosure maintenance policy will enable our community to hold the vacant building owners – including big banks – accountable for the impact their actions have on our neighborhoods,” said Annie Boensch, a Saginaw City Council member and one of the initial supporters of the policy. “When banks and other corporations take over homes and walk away, they leave behind vacant buildings that endanger our families, hurt property values and drive residents away. Saginaw needs to put responsibility where it belongs by requiring banks to maintain foreclosed homes or else pay the price.”

Cities in New York, Illinois, and other states already have similar policies to hold banks accountable for their role in the continuing foreclosure crisis.  Saginaw has been one of the hardest-hit areas in the country, with the sixth-highest foreclosure rate. [1] The ordinance would require owners of foreclosed on homes to pay a fee to register foreclosed properties with the city, including contact information, and pay fines if they fail to maintain them.

“The worst neighbor you can have is a foreclosed house owned by a bank,” said Nina Jones, a Saginaw resident whose home is surrounded by foreclosures.  “These banks and corporations do not care about us.  They are not here when kids start these empty houses on fire, or addicts use them as places to do drugs, or when someone is shot to death in the street, which happened on my block.  I can’t even let my daughters walk to school any more.  This ordinance won’t solve everything, but it is something important we can do as a community right now and we need to do it.”

Saginaw, like other cities, is forced to use precious taxpayer dollars to maintain foreclosed properties when they are neglected. It’s doing so at a time when home values are down and the population is falling, leaving the city with fewer resources to use.  A foreclosed home can cost a local government up to nearly $20,000 a year, experts say. 2

“Vacant foreclosures are dangerous for everyone,” Saginaw Fire Marshal Greg Barton said.  “We get many calls to vacant homes. After multiple fires, some of them are so structurally deficient they are on the verge of collapsing and they have to be torn down at the city’s expense.  A lot of these homes are owned by banks that are absentee landlords who have shifted the burden onto the city, and they are draining taxpayer resources.  Our city simply can’t absorb these costs.”

Saginaw Chief Inspector John Stemple said SCENIC wants to be able to do more to keep neighborhoods safe and clean.

“Residents have a right to expect the owners of a property to maintain it, and there should be the same standard for a local resident and a bank ,” Stemple said. “With a bank-owned property, though, the bank is often headquartered over on Wall Street, and you can’t even talk to someone about a violation. We need this policy so that everyone who owns a foreclosed on home registers with the city – including big banks – and we have the resources we need to hold them accountable.  SCENIC has always been about solutions for our community, and this ordinance is a solution that everyone can get behind.”

[1] http://www.realtytrac.com/content/foreclosuremarketreport/usforeclosureactivityhits-7-monthhighinoctober-6896

2 http://jec.senate.gov/archive/Documents/Reports/subprime11apr2007revised.pdf

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NOTE – The following materials are available online at http://www.seiu517m.org/new-solutions: PDF of map showing foreclosures in 48602, the ZIP code where the press conference took place; text of proposed draft ordinance.

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