The city Common Council is mulling a mini-forclosure auction of the city’s current inventory of foreclosed properties.
During the Sept. 1 Common Council meeting, 3rd Ward Alderwoman Irene Collins asked City Controller Matt Agresta and the city’s legal counsel Tony Casale for an update on the city’s foreclosure process for 2020.
Casale said the legal framework for new foreclosure actions remains murky as the court system has yet to provide clear guidelines for how the system will interpret recent legislation and executive orders regarding evictions and foreclosures.
“I think we’re at a juncture where we’re kind of waiting to see how the courts are going to handle this, and I simply don’t think the city of Amsterdam should be the plaintiff that is litmus testing how the court is going to handle this,” Casale said.
Gov. Andrew Cuomo on Aug. 20 extended his coronavirus pandemic executive order mandating a moratorium on COVID-19 related commercial evictions and foreclosures until Sept. 20. Cuomo first ordered the foreclosure and eviction moratoriums in March, and has renewed them repeatedly since then.
While Cuomo’s most recent foreclosure moratorium does not mention residential foreclosures, a news release from Cuomo’s office states, “...the governor signed the Tenant Safe Harbor Act and additional legislation to protect residential renters and homeowners from foreclosure or eviction due to a COVID-19 financial hardship.”
Casale told the council it’s too early to determine how the new law and executive orders will be interpreted.
“I think we should observe, and then fall in line with what the court wants us to do,” Casale said. “Let’s hope a better option surfaces.”
Deputy Mayor James Martuscello, who represents the 5th Ward, asked Casale if he has specifically inquired with state officials as to how to proceed with new foreclosures.
Casale said he hasn’t, and he said he knows of no municipality that has moved forward on foreclosures.
“I’m not aware of any county in our region that is moving forward with the ‘in rem’ foreclosure process,” Casale said.
“The same thing is true for evictions, and all of that?” asked Mayor Michael Cinquanti.
“The short answer to that is yes, they aren’t necessarily sailing in the same boats with one another, evictions and foreclosures, but right now they’re both on hold is the short answer, under different sets of parameters,” Casale said.
Collins then asked Agresta whether the city still has any leftover inventory of foreclosed properties from prior auctions or foreclosures completed before the pandemic hit.
Agresta said the city does have parcels in its possession, but he isn’t certain how many; that list is maintained by the city’s assessor.
Casale said any parcels that have not completed a previously started foreclosure process must go through a court conference process with the parcel owner and any lien holders.
“Properties the city already owns can be sold, yes,” Casale said.
“Well, maybe we should look at those and see if we can sell those,” Collins said.
Martuscello praised Collins’ suggestion. He asked Agresta, Casale and Cinquanti to provide the council with a list of the properties the city owns free of any further court action.
“Actually, we’ve been putting it together already; we’ve got a list,” Cinquanti said, then asked Agresta if all of the properties the city currently owns have already been up for auction once.
“I can’t tell you every single property we own has been auctioned, or attempted to be auctioned — it’s possible, but I don’t know,” Agresta said.
Casale said he thinks trying to sell off the remainder of the city’s property inventory is a good idea, but the council should also consider reforming the city’s laws pertaining to direct sale of properties to interested purchasers.
“Simultaneously with considering that prospect should be the consideration of eliminating the property disposition section of the city code, which provides the council and the city with quite a bit of red tape in order to unload or sell properties unless there’s a super majority [approval] of the council,” Casale said. “There’s a provision under the city’s property disposition section that will allow there to be a direct sale, but you need a supermajority to do that, which will ultimately present a hurdle for the council, if you’re looking to move these properties in a short time.”
The city of Amsterdam under the tenure of controller Agresta has attempted to diligently keep up with the city’s property foreclosures, reversing a six-year stint of the city foreclosing on no properties, which was one of the contributing factors to the city’s large accumulated budget deficit.
In October of 2019, the city halved its proposed list of 305 property owners in danger of foreclosure due to unpaid taxes, going with an abbreviated auction with 125 properties. The other properties were given options to either pay up the taxes owed or enter in payment plans.
Martuscello said in the past the city has added new foreclosures in with the city’s existing inventory of properties and attempted to auction them all at once.
He said if that’s not possible this year the city should just try to auction off the properties it has.
“I think that’s a good move, Irene, that could give us ready cash — we might as well do something with the properties that we already own,” he said, again praising Collins’ suggestion.