Seven rental properties Affordable Housing bought last year in the city will go on the auction block Saturday. An eighth house is being sold through a private sale, according to Affordable board member and treasurer Deno DeLorenzo. The houses are being sold to satisfy a $300,000 mortgage Affordable Housing of Lawrence County obtained through First Commonwealth Bank in December, when it bought the houses containing 18 rental units. The organization has since defaulted on payments, and the bank has agreed to the sale as a resolution to avoid foreclosure, DeLorenzo explained. Typically in foreclosure, banks repossess properties and resell them when payments are not made on mortgages. However, because of controversial circumstances surrounding Affordable Housing during the past year when most of its board members resigned, the units were not rented and the organization defaulted on its loan, DeLorenzo explained. Four tenants living in apartments in the buildings have not paid rent, he said. It will be up to the buyers to decide whether the tenants can stay. DeLorenzo and William Bonner, an employee of First Commonwealth Bank, are the only remaining board members. They did not pursue the rent money, DeLorenzo said. In allowing Affordable to sell the houses, First Commonwealth has agreed to take proceeds from the sale as its settlement, he said. Attorney Louis Pomerico, designated by Affordable to execute the closings, explained the bank will accept whatever amount is left after expenses are paid. "They just want to get (the properties) back on the tax rolls so taxes don't keep accruing," he said. "Plus, you know, winter is coming." Affordable Housing also borrowed $200,000 from the Lawrence County Housing Authority last year. According to DeLorenzo, Affordable also agreed to pay the housing authority $500 per house toward its debt. Also as part of the agreement, the bank and the authority will reserve the right to claim any civil awards that might be pursued after the sale, DeLorenzo said. Specifically, Affordable Housing will look into whether it has cause to sue the former owner of the houses, Nick DeRosa, for damages if it decides the transactions were made unfairly when he sold the properties to Affordable, DeLorenzo said. Pomerico said Wednesday he was waiting for official approvals for the pending sale from the bank and from the U.S. Department of Housing and Urban Development, which oversees the housing authority. Affordable must use some of the sale proceeds to pay the first eight months worth of the 2006 real estate taxes, which are now in the penalty phase. Affordable also owes about $1,000 on delinquent 2005 real estate taxes on two of the houses, and the New Castle Sanitation Department also has liens on all the properties, according to DeLorenzo. "These houses are going to go cheap. They're pretty run-down," said Ray Mazzanti, the auctioneer hired by Affordable to conduct the sale. He speculated most of them would sell for less than $10,000. Mazzanti said he was told by DeLorenzo they would be sold free and clear of all outstanding debts, which is how the sale was advertised. The auctioneer said that to him, free and clear includes no taxes owed. He said Wednesday he was unaware taxes are still due on them. "I was told the deeds were clear," Mazzanti said. "I plan to address that the day of the sale. The buyers are getting free and clear title to these properties."

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