Confusion over Identity of Mortgage Holders causes Blight
By Nicholas Ortiz, Boston Bankruptcy Attorney on Aug 29, 2008 in General Bankruptcy Information
A recent Boston.com article focused on the impact of abandoned and foreclosed homes on towns in Massachusetts. A particularly interesting section of the article related to the Town of Randolph’s attempts to get the owner of an abandoned house to do some basic maintenance of the property, such as disposing of trash and trimming grass.
A search of the property records revealed that Deutsche Bank National Trust Co. was the owner of the house, likely following a foreclosure. The article states that the local board of health sent a letter to Deutsche Bank but the bank responded that the house was not its responsibility. The bank stated that the loan servicer, Ocwen, was responsible for maintaining the house. If Deutsche Bank is the record owner of the loan, this is precisely wrong.
The town has the right to look to the record owner for health code compliance. An owner may contract out this compliance, and have recourse against their contractor if this work is not done, but the owner remains responsible for its duties.
What I find interesting about this is that the “blame the other guy” ruse that homeowners are often subjected to is here being perpetrated on a municipal government. A loan servicer, used as a firewall between the loan owner and the public, can not be used to eliminate the duties that ultimately rest with the loan owner when it becomes the homeowner via foreclosure.
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