The WPCA continues its foreclosure tear in New Haven. The mayor remains silent.
The agency — the quasi-governmental Water Pollution Control Authority — filed eight new lawsuits in Connecticut Superior Court on Jan. 14 and 15 to snatch New Haven properties for unpaid bills as low as $1,235.
That brings to over 130 the minimum number of New Haven homes the WPCA has filed suit to foreclose on since New Haven relinquished control of the agency in mid-2005 and it became a suburban-controlled independent entity. (Click here to read about that.) The WPCA’s chief told the Independent that the agency needs to act more aggressively to improve a 92 percent collection rate that has cost it more than $1 million that gets passed on to other ratepayers.
Meanwhile, Mayor John DeStefano — who has declared addressing the brewing foreclosure crisis a top priority for 2008 continues to pass up chances to weigh in on the WPCA’s actions or how the city might get involved.
A review of the most recently filed suits reveals the usual span of defendants: absentee landlords, out-of-state lenders inheriting properties, and local people who live on the premises.
The cases include:
376 Blatchley Ave. in Fair Haven (pictured here), a three-family house owned by Ruth Deerisee YouYou. She owes the WPCA $1,157.25 in back bills and interest, according to the filing. A painter was putting a new coat on the walls of the second floor Wednesday. The first-floor tenant said YouYou lives at the house; she wasn’t there at the time.
366 Yale Ave. (pictured at the top of this story) in Westville. Sue A. Yamaguchi owes $1,235.52. Tenant Shannon Mackenzie (also pictured above) said that Yamaguchi is an “awesome” landlady and that her son Jason lives in the house.
27 Lombard St., owned by Citimortgage Inc. at a Missouri address. It took over the property from Rhonda Watson, who had owed the WPCA $1,419.60.
31 Chapel St., owned by James Aiken. His home address is listed as West Haven; he owes the WPCA $1,255.36.
82 Highview Lane, owned by Elijah Joyner of West haven, who owes $1,437.32.
92 – 4 Shepard St., owned by Joanne F. Keyes of Bassett St., who owes “under $2,500,” according to the suit.
22 Kingswood Dr., owned by Evelyn Algarin, who owed $1,241.67.
152 – 4 Huntington Ave., owned by Joanne Ianotti of 908 Townsend Ave., who owed $3,196.84.
What To Do?
Foreclosures were already up 80 percent in the city last year, with a bigger increase forecast in 2008. Given the local and national expressions of concern about the foreclosure crisis, the emergence of the WPCA as a prime initiator and unusually hardball player has elicited remarkably little response from public officials.
Mayor DeStefano began hearing about the WPCA foreclosure binge from legal aid circles a few weeks ago. He has set up a task force to scrutinize the brewing foreclosure problem and recommend ways to address it. He also declared in his inaugural address that his administration would take aggressive action.
Now that it turns out that a creation of the DeStefano administration — the newly independent WPCA — is generating some of the most pressure on precarious property, the mayor hasn’t been in a rush to step in. Or even say anything about it.
New Haven used to run the WPCA. In an effort to lower its debt and to obtain a one-time cash infusion to help balance the city budget, the DeStefano administration engineered a controversial proposal to create an independent, suburban-dominated new version of the WPCA in 2005 to oversee treatment of the region’s sewage.
Reached a week after an Independent story appeared detailing the WPCA’s foreclosure suit binge, DeStefano said he didn’t want to comment. He said he wanted to speak with the WPCA first.
Another week later, his spokeswoman, Jessica Mayorga, said the mayor continues to have no comment.
“He won’t have an additional response at this time,” Mayorga said Thursday morning. “He still doesn’t have a response [from the WPCA] to what he was checking out last time.”
East Shore Aldermen Al Paolillo, the Board of Aldermen’s representative to the WPCA, said he saw no problem with the authority’s tactics (when asked for this article). He noted that none of the suits has so far resulted in an actual foreclosure.
But state Judge Anthony DeMayo, for one, fears that the aggressive initiation of suits is burdening already marginal property owners with piled-on new interest and court fees that will make it even harder to dig out of debt and eventually lead some of them to lose their homes to other lenders. (He’s quoted on that in this article.) By the time the WPCA has settled with some lawsuit targets, their original debts have in some case doubled thanks to interest and fees for sheriffs and law firms hired to chase them, firms like the politically connected Susman, Duffy & Segaloff.
Some observers have suggested steps that New Haven could advocate if leaders chose to engage the WPCA on this issue. Legal aid chief Patricia Kaplan suggested that the WPCA, like other creditors, could rely instead on small claims court to collect debts. Dan Kildee, a Michigan public official who has emerged as a national guru on how to deal with the crisis, suggests a double-pronged approach: have government work much more intensely with property owners in danger of losing their homes; and then move more swiftly to gain control of homes already abandoned or definitely headed for foreclosure. (Click here to read about his ideas.)
Another example is set by the Regional Water Authority, which hasn’t initiated a foreclosure suit since 1992 for unpaid bills. WPCA chief Dominick DiGangi said the WPCA, unlike the RWA, can’t turn off service to customers.
The RWA argues that it can accomplish its debt-collection goals through the placing of liens on properties, without resort to filing foreclosure suits. DiGangi said the WPCA needs to sue to foreclose on people before the city forecloses on people for unpaid taxes; otherwise it risks being unable to collect on debts once the city recovers its debts in a foreclosure action.
However that happens only in cases of “strict foreclosure” — when debts are greater than the value of the property being foreclosed on. That rarely happens in New Haven. For instance, out of 600 foreclosures the city government initiated in 2007 to recover back taxes, only 10 were strict foreclosures — and seven of them were empty lots, not houses, according to Tax Collector C.J. Cuticello.
The WPCA has sued to foreclose on debts as low as $793 before interest and court fees started accruing.
Read previous Independent coverage of New Haven’s foreclosure crisis:
• WPCA Goes On Foreclosure Binge
• A Guru Weighs In
• WPCA Targets Church
• Subprime Mess Targeted
‚Ä¢ Renters Caught In Foreclosure King’s Fall
‚Ä¢ She’s One Of 1,150 In The Foreclosure Mill
‚Ä¢ Foreclosures Threaten Perrotti’s Empire
‚Ä¢“I’m Not Going To Lay Down And Let Them Take My House”
The following links are to various materials and brochures designed to help homeowners avoid foreclosure.
How to prepare a complaint to the Department of Banking; Department of Banking Online Assistance Form; Connecticut Department of Banking, Avoiding Foreclosure; FDIC Consumer News; Statewide Legal Services of Connecticut, Inc; Connecticut Bar Association Lawyer Referral Service.
For lawyer referral services in New Haven, call 562‑5750 or visit this website. For the Department of Social Services (DSS) Eviction Foreclosure Prevention Program (EFPP), call 211 to see which community-based organization in the state serves your town.
Click here for information on foreclosure prevention efforts from Empower New Haven.