- change ups
Land bank finding its way right away
The Kent County Land Bank Authority has been quietly trying to rescue foreclosed homes and, in partnering with nonprofit developers, to get some rehabilitated houses back on the market.
The most recent count has the authority set to take action on eight such properties. This means the land bank has jumped into the housing situation with both feet right from the start. For instance, at the end of March, the board was getting ready to receive bids to rehabilitate homes at 1819 and 2151 Stafford SW in Grand Rapids.
The land bank also tried to sell a home last month at 855 Gibson St. SE in Grand Rapids, but rejected a $5,000 offer because it wasn’t enough to cover the fees for the transaction. Executive Director Dave Allen said the land bank would look to buy other nearby properties in order to create a larger impact for the block, where every home is owned by an investor.
“At this point in time, we don’t anticipate selling Gibson, but we are marketing it,” he said.
The land bank also is working on a home at 239 Sycamore St. SE in Grand Rapids. It was donated to the organization by a Canadian citizen, who bought the house a few years ago from HUD sight unseen. But back taxes are due on the property, and the owner is unlikely to pay the tax bill because he is behind bars.
Allen said the house is beyond repair but the home’s furnace, hot water heater, tub and shower, and toilet are salvageable and will be installed in the Stafford properties. “It’s an extremely strategic property,” said Allen of the Sycamore parcel.
The land bank plans to combine the Sycamore lot with a property owned by ICCF and another parcel that made the tax-foreclosure list last week. Allen said the three lots would be great for redevelopment and compared the Sycamore site to the Cherry Street property ICCF now occupies.
Last week, the land bank also called for bids to rehabilitate a house at 1129 Cass Ave. SE, which Wells Fargo Bank donated to the organization.
But what has drawn the most attention from the land bank’s board is the plan in place for a house on Dickinson Street SE in Grand Rapids. What makes this one different from the others and worthy of attention is that the dwelling is occupied by the owner, who is likely to lose her house if the land bank doesn’t act. Unlike the unique distinction the situation holds for the land bank board, this story likely has unfolded millions of times in this country since late 2007.
The owner is a victim of a predatory loan issued in 2003 by the now-defunct AmeriQuest Mortgage Co. Three years after signing the loan, she was forced out of her job and placed on total disability. She got behind on her payments and then the housing market collapsed, leaving her very much underwater. Today, the house has a debt of $150,000, which includes $50,000 of charges from the original $100,000 mortgage. The home’s market value is only $20,000.
The owner is faced with the option of repaying the debt or being tossed from her home, but the land bank has arranged to buy the house for $12,000 from Chase Bank, which purchased the servicing of the loan in 2010 and then wrote it off. The land bank will then sell the mortgage to the woman for $20,000, and Huntington Bank will become the lender of record for the 30-year loan.
Allen said the organization couldn’t sell her the home for $12,000 because once the word got out about what the land bank did, others would try to take advantage of its Home Saver Program.
“If we don’t do this, then she will be evicted and the house will sit empty and rot. The mortgage will be in her name,” he said, while adding that the land bank should be made whole in the loan’s 17th month.
“We will be assigning, or selling, the mortgage in 18 months. Technically, Huntington Bank will be servicing the mortgage,” said County Treasurer Kenneth Parrish, who founded the land bank.
“I think this is a great opportunity if we do it with caution,” said George Meek, Plainfield Township supervisor and board member.
The Dickinson Street home is the first for the program, and the land bank board gave Allen the green light to go ahead with the transaction.
“Dan Shanahan from Huntington Bank assures us that once the loan has been seasoned with on-time payments for 12 to 18 months, they will purchase the loan from us,” said Allen. The owner’s monthly payment will be $369.
Parrish said when he started the land bank, he didn’t envision helping homeowners in this manner, but he said this type of action meets the organization’s mission.
“I don’t want us to be rigid because things like this come up, and we now have a chance to keep someone in their home. This comes to us with very little risk. If it doesn’t work out, it’s just a process,” said County Commissioner and board member Stan Ponstein.
The local housing market is one that Grand Rapids city commissioner and board member Rosalynn Bliss feels is at a more crucial point than she imagined. Her evaluation comes after hearing of the financial difficulties homeowners have had for the past several years.
“The state of the housing market is more critical than even I thought it was,” said Bliss. “I think the Home Saver Program fits the goals and mission of the land bank.”