| In the mortgage world, it is the banks who are the | | | | Connecticut. |
| major lenders. With borrowers failing en masse to | | | | In New Haven hundreds of properties are lying around |
| manage their mortgage repayments the banks are | | | | with the lenders disinclined to part with them although |
| foreclosing and taking possession of the house that | | | | buyers are trickling in. Mayor John DeStefano put |
| had been kept as security. These houses that the | | | | pressure on 39 lenders to register the foreclosed |
| banks have taken back are known as bank repo | | | | properties they have repossessed in the city. |
| homes or bank repossessed homes. They are also | | | | According to a New Haven ordinance the lenders will |
| referred to as REO or real estate owned. | | | | have to pay a fine of $250 daily if bank repo homes |
| The bank repo homes are causing endless worry to | | | | are not registered. They are also expected to give the |
| the banks and the entire community. The banks being | | | | name and address as well as telephone number of a |
| in the money business are not landlords. They do not | | | | person that can be contacted. |
| have the infrastructure to deal with thousands of bank | | | | The case of Deutsche Bank of Germany versus |
| repo homes. As such these bank repo homes are | | | | Water Pollution Control Authority (WPCA) highlights the |
| laying vacant attracting vandals, disease and crime. As | | | | situation. WPCA foreclosed on the property because |
| a result the bank repo homes are pulling down the | | | | of non payment of sewer fees. As a result the |
| value of adjacent houses that have not been | | | | property was auctioned and bought by a person who |
| foreclosed upon. Eager to sell the houses the banks | | | | made a down payment. Deutsche bank, the legal |
| are offering huge discounts. | | | | owners of the property, blocked the sale and the sale |
| But in Connecticut the would-be buyers are | | | | between WPCA was declared null and void. In 2008 |
| complaining that most of the repossessed units are | | | | the majority of the bank repo homes in New Haven |
| owned by banks and lenders located outside the state. | | | | belong to Deutsche Bank. |
| The buyers have already made down payments only | | | | Deutsche advocates argued that the bank is only is |
| to discover that the lenders do not want to | | | | the trustee for the foreclosed properties and works |
| immediately sell the units. The jumbo lenders are | | | | with many servicers. The problem is the identification |
| reluctance to sell the repossessed units has only | | | | of the servicers. |
| aggravated the problem of vacant houses in | | | | |