The city places liens on properties whose owners have failed to pay money they owe for such things as street lighting, sewers or code violations, but it has not foreclosed on real property liens since 1971. The first reading of the foreclosure ordinance is scheduled for Wednesday, Jan. 29. The Council is expected to approve the ordinance one week later. The ordinance takes effect 30 days after adoption.
City Auditor Gary Blackmer tells GlobeSt.com the first notices will be sent out in early March and will focus on the 220 commercial properties and vacant lots with liens that are over 365 days past due. The commercial properties represent $1.3 million of the aforementioned $7.8 million figure. "My goal is to look not only at the violations but also at the financial situation of the owner," says Blackmer. "The goal is to resolve these without going into foreclosure."
Blackmer acknowledges that the timing isn't great as far as the economy goes but says that if people need to refinance their properties the interest rates are certainly attractive. He says there will be two programs in place, a hardship payment plan for those with financial troubles and another special payment plan for those who have lapsed in their payments but are otherwise financially healthy. Those who met the financial hardship category would be obligated only to cover interest on their debt and those who have lapsed would be asked to pay a little extra each month to get them less than a year behind in their payments.
"It's been on my list of things that need to get done because the more people owe the harder it is for them to catch up," he says. "It has just taken a while to get time to take on such a complex and sensitive area."
Blackmer says that the city will develop a case file on each property and look at the background and type of violation and then put it up for review by a collections committee. When approved by the committee, the issue is taken directly to the property owner, who can appeal any assessment to a hearings examiner.
If the city ultimately must foreclose on a property, Blackmer says the city would sell its lien to a third party for face value. If the debt was not paid off in a year, the holder of the debt owns the property free and clear, "and any mortgage holders would lose out."
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