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Amherst couple’s foreclosure nightmare is a real-life cautionary tale

The Cottones’ first indication that something was amiss came in a panicked call from one of their tenants, who had just opened an envelope from the City of Buffalo.

Their house in Parkside had been sold.

“You can’t imagine the stress of thinking the unthinkable, that something has happened and your house is gone,” Jerry Cottone said.

An unpaid garbage fee of about $600 had landed their house on the city’s auction list.

The Cottones eventually won their house back in court. But in the meantime, they had to hire a lawyer, get a judge’s order, miss work and spend countless hours worrying that they had lost their investment property.

Their situation raises the question of what lengths the city or any municipality must pursue when notifying homeowners of delinquent fees and taxes, and the consequences of foreclosing on properties that owe small amounts.

Jerry and his wife, Catherine Cook-Cottone, acknowledge they forgot about the garbage fee when they moved to Amherst in 2010 and didn’t join the city’s rental registry, which allows the city to find property owners who live elsewhere. But they said they received no notice that their house was in danger of being foreclosed. They did receive other city bills at their Amherst home and paid them, so they thought the city knew where they were.

“At 6 o’clock at night, your tenant calls you and says the letter says the house has been sold, and you have no idea what the heck could be going on,” said Jerry Cottone.

He got the call in early December, five weeks after the house was sold.

The Cottones lived in the Woodward Avenue house for 10 years and kept it as an investment property when they moved.

They said they never saw the garbage fee bills sent to Woodward.

After two years, the unpaid fees amounted to about $600, so the city sold their two-family house, assessed at $147,000, for $110,000 in the city auction.

The city sends out some 14 notices to a property owner that their home is on the city’s auction list, warning them to pay up or lose the house, but the Cottones said they never received any.

But when the city sent a notice to Woodward that the house had been sold, their tenants opened it and immediately called them.

The tenants also routinely gave them junk mail, such as advertisements for sweepstakes, the Cottones said, so they doubt foreclosure notices from the city were being discarded. The tenants submitted statements to the court saying they never received the city’s notices.

The city’s top attorney, Corporation Counsel Timothy A. Ball, insisted that the city did indeed send notices to the Woodward Avenue house, as it does for every property whose owners have fallen behind in their bills.

“The city complied with all laws, rules and regulations,” Ball said.

First-class letters to the Woodward Avenue property from the city were not returned to the city as undeliverable, though a certified letter was, according to the city’s submission to the court.

Property owners who have lost their house at the auction but were not notified is something attorney Paul B. Curtin hears often enough for him to think it’s a problem.

“People come to me in huge, major crisis,” said Curtin, who works for Legal Aid Bureau of Buffalo and represents low-income defendants who are in danger of losing their homes. “Why would so many people on such a regular basis try to game me with that excuse?”

4,235 properties at risk

The Cottones’ story unfolds as the city is compiling a list of 4,235 properties whose owners have fallen behind on their bills and are in jeopardy of being foreclosed upon. Forty-four percent of those properties owe only the city’s garbage fee, and in 56 of those cases, less than $500 is owed.

The city has made changes to its billing and foreclosure processes, such as reducing the foreclosure fee and reversing a policy that called for user-fee bills to be sent out once a year instead of every quarter.

And for those who know their home is being foreclosed upon, the city makes an effort to keep them in their homes by working out payment plans during a four-day marathon in the basement of Erie County Court the week before the auction. But there is still more to do, housing advocates said. Out of all of the properties on the current foreclosure list, 1,843, or 44 percent, owe the city less than $750 in fees and taxes.

In a city where there is so much vacant housing stock, the city’s policy of foreclosing on properties that owe at least $200 doesn’t make sense, said Joseph A. Kelemen, executive director of the Western New York Law Center.

“I would rather see them sue people for user fees than take their homes for $500 or $1,000,” Kelemen said.

Housing advocates note that banks must meet many notification requirements when a foreclosure is imminent, and they said municipalities should also have a greater burden to notify property owners.

“I think there might be an argument that they should go to extra lengths early in the process to make sure that people’s addresses are as up to date as possible,” Curtin said.

“A notice like that should really stand out, at a minimum,” he said.

The city should merge its address databases, so if property owners changes their address for their sewer bill, the address where other city bills are sent should also change, they said.

“We’re talking about taking someone’s home here,” Kelemen said.

Before the auction is held every fall, property owners who owe the city past-due bills are charged a $150 fee March 15, which rises to $305 after May 1 if the bill is not settled. Properties that remain in foreclosure will be auctioned at a multiday event in the Buffalo Niagara Convention Center.

‘In no way’ abandoned

The Cottones don’t know where the bill for the user fee was being mailed, and the couple did not pay it online.

They would have happily paid it and avoided the time spent in court and lawyer’s fees of $1,500, they said.

“The feeling that I got was that this couldn’t happen in the United States, that someone could completely sell our property,” said Catherine Cook-Cottone.

The water bill for the Woodward house, which is mailed by the city’s hired vendor, came to the Cottone’s new address, as did their sewer bill, and they paid their taxes online.

But they didn’t know about the city’s rental registry, which allows the city to know how to contact property owners who live elsewhere.

The Cottones stressed that they are not neglectful property owners, that they invested $120,000 into the house. They spent 10 years living on the second floor and renting out the downstairs.

After the call from the tenant in early December, Cook-Cottone spent the evening writing emails to anyone she could find on the city’s website and researching the auction process online.

The couple hired an attorney, who filed an order to show cause. That order stopped the deed from transferring to the buyer, Waseem M. Elwaseem.

The proceedings dragged through the holidays, but ultimately, State Supreme Court Judge Thomas P. Franczyk decided in the Cottones’ favor.

“He could have easily said, this is it, you’re done, and that would have been it,” Jerry Cottone said.

Buyer is out a house

But now Elwaseem feels the rug has been pulled out from under him, too.

“My clients had made arrangements to leave where they were living,” said Elwaseem’s attorney, Robert M. Goldstein. “My clients did nothing wrong. They did everything right.”

Following the judge’s decision, the Cottones paid $1,181.86 – the amount of user fees, penalties and interest that they owed – and the city refunded Elwaseem what he had paid for the property.

The city’s Law Department represented the city through the action and defended the integrity of the city’s process. The Cottones said the attorneys there were attentive and dealt honestly with them.

The Cottones still haven’t figured out where the garbage fee bills went. They tracked down the mail carrier and asked if she had been delivering notices from the city to their Woodward home, but the carrier couldn’t remember, they said.

Jerry Cottone works for the city school district, and both Cottones are easy to find through an Internet search, they said.

There is no mortgage attached to the Woodward home, so a bank, which could have alerted the Cottones, was never notified.

“We thought we were doing everything right,” Catherine Cook-Cottone said. “We had no sense that there was something we weren’t doing or that we should do.”