AG Coakley, Local Officials, Massachusetts Bankers Association Highlight Funding Relationships Between Community Banks and Local Receivers to Help Restore Abandoned Properties
AG Coakley Tours Rehabilitated Abandoned Property in Revere Partially Financed By Community Bank
The Attorney General's Office and the Massachusetts Bankers Association also announced a relationship to develop additional funding opportunities between community banks and local receivers to help finance rehabilitation projects.
"The partnership between Chelsea Restoration and Danversbank made this project possible and the completion of this property illustrates the positive outcome when community banks get involved in the rehabilitation of abandoned properties," said AG Coakley. "Our office is eager to work with the Massachusetts Bankers Association to educate and encourage more community banks to forge relationships with local receivers to help reduce blight and stabilize neighborhoods through these projects."
"We look forward to working with Attorney General Coakley on this initiative," said Kevin Kiley, Executive Vice President of the Massachusetts Bankers Association. "Local banks can provide financing to bring these properties up to code and put them back on the market, helping to improve neighborhoods and the housing market."
Abandoned properties impact communities in many ways. They are often public safety threats and the blighted properties degrade property values of neighboring homes. These properties are also a tax burden for towns as the communities no longer receive tax revenue for the properties. Today's partnership between AG Coakley's Office and the Massachusetts Bankers Association is another way to work together to stabilize communities.
The rehabilitation process of this two-family property was financed partially with a construction loan from Danversbank secured by the receiver of the property, Chelsea Restoration Corporation. Chelsea Restoration Company also used funds from a grant awarded to them through the AG's Abandoned Housing Initiative. The funds from this grant stem from a 2009 settlement between the Attorney General's Office and Fremont Investment and Loan, in which over $1 million in grants were awarded to community development organizations and municipal governments throughout the Commonwealth to fund rehabilitation of abandoned properties.
In July of 2009, the City of Revere identified a number of problem properties that they were interested in targeting for receivership, and 60-62 Agawam Street was identified as a top priority. Bank of New York foreclosed on the property in July 2006 and obtained the deed for the property. Revere Inspectional Services first inspected the property in June 2009, finding the property vacant and unfit for habitation under the Massachusetts State Sanitary Code. In May of 2010, the AG's Office filed a receivership petition after sending two demand letters in November of 2009 and March 2010. Through a partnership with the City of Revere and the Attorney General's Abandoned Housing Initiative, the AG's Office used the receivership statute to have a court-appointed receiver oversee the renovation of the property and in May 2010, the Chelsea District Court appointed Chelsea Restoration Company as the receiver of the property. Addressing immediate concerns at the property, Chelsea Restoration Company secured a construction loan from Danversbank in September 2010 and used grant funding from the AG's Abandoned Housing Initiative to further finance the rehabilitation. The rehabilitation of the property was completed in January 2011. Bank of New York has chosen to pay off the receiver's lien and will now regain control of the property.
In the last few years, AG Coakley's Office has seen an uptick in reports of abandoned properties. In 2009, the Attorney General's Office expanded the Abandoned Housing Initiative and currently has 102 active abandoned properties in the program. Since the program expansion, six receiverships have been completed and 49 cases have been closed after properties were repaired and brought up to code by the owners in response to pressure from the AG's Office. In addition to Revere, the AG's Office currently has pending and active cases in 23 communities in the Commonwealth, including Worcester, Randolph, New Bedford, Holyoke, Lawrence, Saugus, Brockton, Pittsfield and Fall River.