Nearly all of Bangor’s vacant residential properties are owned by out-of-state banks or investment holdings, according to the city’s code enforcement director. And it can be difficult, if not impossible, to track down the right person to facilitate a sale.
Out-of-state banks or investment holdings own 56 of the 70 total vacant residential properties in Bangor, according to Jeff Wallace, Bangor’s code enforcement director. The remaining 14 vacant properties are owned by individuals.
Bangor could soon take action to pressure the owners to either sell or do something with the buildings as city councilors will consider whether to double the biannual fee owners must pay if their property remains vacant. The measure, if adopted, would come at a time when Bangor is trying to increase the number of affordable housing options and address the needs of the city’s homeless residents.
Shellpoint Mortgage Servicing, headquartered in South Carolina, owns five vacant residential properties, the single largest holder of vacant properties compared with other out-of-state companies, according to Wallace. Other banks own two or three properties.
Bangor’s battle over vacant properties
Shellpoint did not return requests for comment Wednesday regarding why the company holds properties in Bangor rather than sell them.
Banks and investment holding companies usually take ownership of residential properties following foreclosures, Wallace said.
Maintenance completed on those properties is typically “minimal at best” and often requires prodding from the city’s code enforcement department to get necessary upkeep completed, Wallace said.
Large out-of-state companies owning properties also makes it difficult for the city’s code enforcement officers to find the right person to send violation notices to.
While there may be local developers who are interested in buying and rehabilitating a vacant home, Kurtis Marsh, associate broker in Bangor with Realty of Maine, said those interested buyers are often unable to track down the owner or calls to the owner go unanswered.
If an interested buyer is able to find the correct owner, often incomplete or incorrect property title documents stalls any potential sales, Marsh said.
“When title issues come up, banks aren’t using a local attorney to solve it and there doesn’t seem to be a push to get it resolved,” Marsh said. “It’s a very specific process and if it’s not done right, they start all over again.”
Marsh said he has never had a client successfully buy a vacant property in Bangor.
vacant home dangers
Marsh said he hopes the city finds a way to push vacant property owners, whether they’re local individuals or national companies, to do something with the properties or sell them to developers who will turn them into viable housing the area needs. Otherwise, the empty properties continue to be an eyesore for the city, lower property values in the neighborhood and attract crime.
“I hate to say national companies don’t care, but it seems like they don’t,” Marsh said. “The biggest challenge for Bangor now is they need to make people care about those properties. There’s the vibrant market for real estate and if they were put on the market they’d sell in a heartbeat.”
David Caliendo, a Century 21 real estate agent who has specialized in foreclosures for 29 years, said the foreclosure process takes years because national banks hire out-of-state attorneys to oversee the process under Maine law. The legal process can take even longer if someone fights the foreclosure.
Sometimes banks will sell a group of foreclosed properties in a portfolio as a cost-cutting measure, Calidendo said. This is legal, but makes it more difficult for future interested buyers to tell who owns a property.
Over his career, Caliendo has seen hundreds of vacant, dilapidated properties sell in the greater Bangor area, usually to local buyers, though the process never happens quickly.
“I’m approached almost every week by someone saying there’s a vacant house they’re interested in buying,” he said. “It will eventually come to fruition, but it’s at the bank’s convenience.”
Vacant homes and affordable housing
The proposed rule change Bangor city councilors will consider in the coming weeks would increase the initial vacant permit fee to $500, which will double with each permit renewal but cap at $4,000. This means the owner of a vacant property could eventually pay $8,000 annually for letting property sit vacant for years, as is the case for most of Bangor’s vacant properties.
Most of the city’s vacant buildings have remained on the list after being added between 2014 and 2018, Wallace said. The oldest property on the list was added on April 22, 2014.
The rule change would also give the city more power to enforce the rule, David Szewczyk, Bangor city solicitor, said. The revision would make someone who doesn’t follow the city’s rule subject to a civil penalty and the enforcement provisions of the state land use enforcement law. This means if a property owner fails to pay the permit fee, a court can order the person to pay, because that’s what the state law allows. If the land owner still refuses to pay, they can be found in contempt of court.
Only 16 of those property owners pay the city’s vacant property permit fee, Wallace said. Those fees generate just $9,056 annually in revenue, which goes into the city’s general fund.