A Solution That Creates Problems | The WBJ Editorial
During a recent tour of a vacant, foreclosed three-decker in Worcester, a local real estate agent told the WBJ, âThis house is unique. It still has all its original copper.â
The agent said this only half-jokingly, but his comment reflects a sad reality about a sagging city real estate market so rife with foreclosures that it is commonplace for foreclosed homes to be plundered for their valuable copper fixtures by their former owners, tenants or common criminals.
While the foreclosure crisis has real local consequences, the Worcester City Council's recent push for home rule petitions intended to ease the city's foreclosure pains is well intentioned, but duplicative of state laws that are already on the books and state efforts that are already underway.
Red Tape
Like a college student overwhelmed by a heavy course load and struggling to understand his exam material, the city council just wants it all to stop. And if approved by the legislature, the council's home rule ordinances would indeed bring the foreclosure process in Worcester to a halt, prolonging the agony of an already time-consuming, emotional process. We do not think local government can be an effective arbiter of the housing market.
If approved, the council's petitions would result in city ordinances that would prevent lenders from evicting tenants in good standing from foreclosed properties and would require a review of foreclosures by either state Superior Court or Housing Court. The ordinances would be passed by the state legislature as attachments to a proposed statewide 180-day moratorium on foreclosures of subprime, adjustable-rate mortgages.
But by law, a lender can't simply throw a tenant out of a foreclosed property - only the housing court can order them to leave. Under the council's plan, a lender/property owner would have to go before the housing court twice in order to clear a property and ready it for sale - and that's after the six-month lay-off proposed by the state.
The Worcester City Council should stand aside and allow truly proactive agencies and organizations to nurse the city's housing market back to health. The city itself has planned a workshop for later this month designed to help homeowners avoid foreclosure. MassHousing offers a free, privately financed mortgage counseling and loan program called Home Saver, which is specifically designed to help homeowners of modest income save their properties from foreclosure. Applicants must be employed and have credit scores above 560 to qualify.
New Money
Last week, Gov. Deval Patrick announced the creation of a $20 million, privately funded loan pool for developers interested in buying, refurbishing and renting out abandoned and âat-riskâ properties in Worcester and six other cities.
That program also includes a $60,000-per unit subsidy for developers who commit to refurbishing those properties as affordable housing. The program was tailor made for cities like Worcester and allows local governments to work with developers to prevent troubled neighborhoods from falling into vacancy and ruin.
These programs seek to help deserving property owners, tenants and developers resuscitate the housing market while the city's plan treats the former owner of every foreclosed property like a victim and piles on unnecessary busywork and local bureaucracy for those trying to return those properties to life.
The mortgage finance meltdown and related foreclosures make up a sad and painful chapter in many cities' economic history. But the Worcester City Council must remember that unscrupulous mortgage brokers and lenders are not solely responsible for it. Many former homeowners should've known better than to enter the loan arrangements they did and are facing the consequences of their actions. n
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