City of Trenton begins foreclosure process on 44 more properties

Feb 10, 2016

The map above depicts the location and type of the 44 properties that the City of Trenton has initiated the process of foreclosure in December 2015. The City has always had the power to foreclose but for many years lacked staff capacity to implement. In 2015, the City initiated foreclosure proceedings in May, June, and December on batches of ~50 properties.

City governments can foreclose?

Most people are familiar with foreclosures that are initiated by banks in response to unpaid mortgages. Local governments are also able to initiate foreclosure proceedings in response to unpaid property taxes or even water bills. Governments occupy what's known as the "first position," which means they are first in line to be able to foreclose if the property owner does not pay property taxes, mortgages or has other unpaid bills related to their property. If you have a mortgage, you may notice that your bank manages the payment of property taxes on your behalf. This is because if you are delinquent on property taxes, the City has the right to foreclose on your property, even if you are current on or have paid off your mortgage.

What's the benefit of the City pursuing foreclosure?

Foreclosure is a tool for the City to spur activity on properties that are paralyzed by too many public and private liens to be sold through other means. After foreclosure, the City can sell or give the property to a new owner to redevelop or rehab. Many of the eligible properties have been vacant for years, even decades, because the price to purchase through other means requires payment of all deliquent debts, which tend to go up even as the property's value goes down. Through foreclosure, a City can take legal ownership of a property and very importantly, wipe out its debts from all creditors, making it a feasible purchase for a private buyer.

Which properties does the City pursue foreclosure?

There are thousands of properties that are potentially eligible for foreclosure because they have unpaid property taxes- 2734 properties, according to city data as of December 2015, However, the City can pursue foreclosure action only after many criteria have been met, described in the accompanying graphic Municipal Foreclosures 101.

The City is pursuing foreclosure action on the following properties, as of December 2015. Property owners can pay off public liens and the related interest up until the court judgment is signed.