Thursday, December 18, 2008

Trouble next door on Gilbert Street

By Erica Noonan, Boston Globe, MetroWest edition    December 18, 2008

     The mortgage crisis is not some faraway national problem to George Lewis and his neighbors. It has come home to Gilbert Street.
     During the first six months of this year, four of the 38 houses on this pleasant street a few blocks south of downtown Framingham were involved in the foreclosure process, which generally takes several months and requires several legal steps before a judgment is issued against an owner.
     Three of the houses, Nos. 11, 25, and 37-39, are clustered near the Winthrop Street end of Gilbert. 

     All three appear to be vacant. Trash and fliers have accumulated on the porch and lawn of No. 37-39. The fourth property, No. 64, is midway down the street, and still has a neatly kept appearance.
     The three-family house at 37-39 Gilbert looks as though it was vacated in midrenovation, after the LaSalle Bank National Association filed an order of notice for foreclosure against its owners, Neylor and Marcela Silva, in February, according to the state Registry of Deeds. On a recent visit, an old toilet lay in a side yard overgrown by weeds. Ripped weatherproofing partially covered an unfinished bay window, and toys and debris cluttered the backyard, alongside a soggy sofa covered in mildewed plastic. 

Major code violations and work performed without permits at 37-39 Gilbert Street
     "How can I sell my house if people see this?" said Lewis, a painter who has lived a decade in the otherwise well-kept neighborhood within walking distance to shopping and Waushakum Pond.
     The community is an ideal place for artists, Lewis said, affordable yet close to Boston and suburban cultural centers in Framingham and Natick. But the presence of the troubled houses is upsetting.
     "I am very concerned about preserving the value of my home. I think many of us on this street are," said Lewis, who mowed the lawn of the abandoned house over the summer to improve its curb appeal.
     Just a few years ago, things on Gilbert Street were different. Prosperity seemed abundant. At the height of the market in 2004 and 2005, houses on the street were selling for upward of $400,000. The house at 37-39 Gilbert sold for $560,000 in May 2005.
     Then the economy started to slow, and the housing market nationwide plunged amid the ongoing subprime mortgage crisis. In Framingham, by the end of October, foreclosure actions had begun on 350 houses out of the town's stock of 17,700 residential properties. That's up from last year's total of 336, according to the Warren Group, a Boston company that tracks local real estate data.
     Foreclosure has affected only about 2 percent of the houses in Framingham, but the unlucky coincidence of four houses going through the foreclosure process on his street has left Lewis worried about safety as well as property values.
     He said he pestered town officials for weeks to padlock 37-39, which he viewed as an invitation to squatters as well as a danger to firefighters and curious children, because so much of its flooring was ripped up during the start of renovations.
     "If someone gets hurt, they are going to sue the town, which is going to make the problem even worse," said Lewis.
     The other houses appear, from the outside, to be in better shape, but none of the owners of record could be reached to discuss what happened to their properties.
Driveway at 11 Gilbert Street. This single family house was illegally converted to a three-family.
State records show 11 Gilbert St. was bought for $379,000 in March 2005 by Salvador D. Linhares, and foreclosure proceedings began once in April 2007 and again in January. The process concluded with a foreclosure judgment in May, according to the Registry of Deeds. A message left at the most recent phone number listed for Linhares was not returned.
     REMAX realtor Didier Lopez said last month that he tried to sell 25 Gilbert - bought in 2005 for $345,000 by Ronaldo Solano - for between $225,000 and $240,000 several months ago. Solano had received an order of notice of foreclosure from lender Salem Five Mortgage Company LLC in August, according to state records. 

Illegal paving of property at 25 Gilbert Street
     There was no sale, Lopez said, and he was not sure about the current status of the house.
Real estate sales records show 64 Gilbert St. was bought in July 2006 for $415,000 by Elizabeth Sanchez. Lender GMC Mortgage LLC first filed an order of notice to foreclose in December 2007, and received a judgment in May. The property was purchased in May for $195,000 by Haider Nasir, according to real estate records. Attempts to contact Nasir with questions about his plans for the property were unsuccessful.
     Another Gilbert Street resident said he fears the value of his house, bought in 2006 for
Many trucks and vehicles at 25 Gilbert Street.
This was the case with a number of other properties
on Gilbert Street.
$265,000, is less today, despite an overhaul of the plumbing system. "We bought this home to gain equity and right now I think I have lost more than I put in, which I find really disheartening," said the 37-year-old homeowner, who asked that his name not be printed. "I look down a few houses from me and see abandoned property; why would someone want to move in here?"
     He said he feared that speaking publicly about the issue would inflame tensions in town because several of the foreclosed homeowners were Brazilian immigrants. "I love living in a diverse neighborhood; I am not blaming the people in the houses. But back in 2006, if I had seen a foreclosure sign here, I would have changed my mind" about buying.
     Framingham officials might have prevented some of the problem by monitoring construction on the street more closely, and stepping in when overextended homeowners were cutting corners on proper permitting, Lewis contends.
     More than one of the four Gilbert Street houses appear to have lost value as a result of improperly permitted renovations, in addition to the other foreclosure problems, acknowledged Framingham building inspector Michael Foley.
     Foley said he sympathizes with the plight of residents in the wake of the foreclosure crisis, but he maintains that municipal officials with limited staffing cannot possibly monitor the nuts and bolts of every single house project. He said his department didn't know the extent of the problems with the Gilbert Street houses until it was too late.
     "I don't believe it's the town's fault," Foley said. "Neighbors know far more about the neighborhoods than the people in Town Hall, and they need to keep us informed about what's happening that's not right."
     Foley's three-person department keeps a database of Framingham properties under foreclosure action. They try to monitor the buildings, even running nighttime inspections looking for after-hours candlelight in vacant buildings.
     "We don't know these people. But we have seen many, many situations of people who have hopes and dreams that shatter when the money isn't there anymore," he said. "What change happened in their lives where they couldn't finish what they started?"
     Foley said accountability for some of the more decrepit-looking properties is not as simple as it would seem.
     Efforts by officials to locate the Silvas, the last listed owners of 37-39 Gilbert, have been unsuccessful, and the town - probably due to a paperwork backlog from state and federal efforts to slow down foreclosures - is still unable to determine who owns the property and is responsible for its upkeep, said Foley.
     Town officials would like to head off similar situations in the future. Foreclosure prevention is the goal of several local and state efforts, including the HOPE Now program operated by the South Middlesex Opportunity Council Inc., a regional antipoverty social services organization.
     In Framingham, 64 families are enrolled in the program, which helps struggling homeowners negotiate terms with lenders.
     More than 80 percent of the program's clients are owner- occupants, and 60 percent had a sudden reduction in income from problems such as illness, job loss, divorce, or death in the family, said the director of SMOC's Housing Services Center, Ozzy Diagne. Less than one-third are owners of investment property, or families who refinanced with adjustable-rate or balloon loans, he said.
Charles Gagnon, the nonprofit organization's chief operating officer, said suddenly abandoning a house and a neighborhood is sadly commonplace.
     "The people we see who face foreclosure get so scared, they grab what they need and send the keys to the bank. There is tremendous panic and shame. Going into foreclosure has serious psychological ramifications for everyone involved," he said.
     Foley, the building inspector, said that despite the difficulty of the market, and worries of people who live near one - or several - foreclosed houses, Framingham homeowners should remember that the properties are a minute part of the town's "very stable" housing stock.
     Of the foreclosed properties on the books last week, about one-third were in some sort of negotiated transactions, though many at 30 to 50 percent less than their assessed value, he said.
     "That's a positive thing, that inventory is moving," Foley said. "I don't have a crystal ball. But there is interest that wasn't here four months ago, so I am very optimistic."