LORAIN — David and Goliath are squaring off at 476 W. Sixth St.
On one side is JPMorgan Chase, the second-largest bank in America. On the other side is Lorain, a financially troubled city grappling with a high rate of foreclosures.
The center of the dispute is a burnt-out house at 476 W. Sixth St. that the city says is a fire hazard and wants to raze. The house burned in an April 24 fire believed to have been caused by a downed power line in a storm.
JPMorgan is owed $100,500 by former residents Ana and Maria Cruz and is fighting the demolition, according to court documents. In the documents, filed June 28 in the Lorain County Court of Common Pleas, the bank said it didn’t receive notice from city officials of a June 8 Housing Board of Appeals meeting in which the house was ruled to be a “dangerous building” and approved for demolition. Attorney Matthew McKelvey, who represents the bank, wrote that city officials didn’t return a voicemail from him regarding the property.
JPMorgan spokesman Tim Kelly said the Cruzes, not the bank, own the home, and he didn’t know who is responsible for maintenance. Kelly said a bankruptcy by the Cruzes delayed the foreclosure that began in June. Kelly said the bank is the servicer of the mortgage and wants an insurance appraisal done before a possible demolition.
“We have to get an insurance adjuster to say it was a loss or a total loss,” he said. “We’ll work with the city and the county to maintain it and to take the appropriate next steps.”
Kelly said JPMorgan doesn’t have a set policy regarding allowing municipalities to demolish homes it owns or is servicing if the home is deemed a fire hazard.
“We work with local authorities on a case-by-case basis,” he said.
Mayor Chase Ritenauer said the dispute is typical of the “shell game” cities like Lorain face with banks and former residents in determining the property owner and responsibility for maintenance or demolition of a home. Lorain officials have their hands full.
One in every 240 homes in Lorain was in foreclosure in May, according to RealtyTrac, a real estate website. The overall rate in Ohio was one in 495 and the U.S. rate was one in 639.
Ritenauer would prefer that JPMorgan, which earned about $19 billion in profit last year, pay for the demolition rather than Lorain. The city has been on fiscal watch by the state since 2002 and is facing a $2 million budget hole. Ritenauer estimated demolition will cost at least $10,000.
“There was an inherent risk in them lending the mortgagee that money, the mortgagee didn’t come through and now, in my mind, it’s the bank’s responsibility,” he said. “This, to me, is the cost of doing business for a bank, and they need to step up and knock the building down.”
Regardless of who pays for the demolition, Ritenauer hopes the building — at which there have been reports of homeless people occupying it — will come down soon.
“The ultimate loser, it’s the city. It’s the neighborhood. It’s the people who have to live around this property,” he said. “We need to get it taken care of.”
Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.
Recent Comments