The city of Worcester recently used the state’s receivership law to take control of the foreclosed-upon property at 12-14 Lagrange St., which has fallen into disrepair.

As he struggles to deal with hundreds of homes apparently abandoned after foreclosures, Worcester Housing Director Scott Hayman has noticed something.

“Hundreds of decision-makers are just now catching up with the fact that they own property,” he said.

So many mortgages were sold to Wall Street investors in recent years that it’s almost impossible to determine the owner – or for an owner to determine what is theirs.

In some cases, Hayman said, Worcester officials have decided not to wait while the owners figure it out.

The city recently became the first community in Massachusetts, according to Hayman, to use the state’s receivership law to take control of a foreclosed-upon property fallen into disrepair.

The property, located at 12-14 Lagrange St., an eight-unit condominium building in the city’s Main South neighborhood, had eight sets of collapsing back steps, he said.

That presented a health-and-safety risk to tenants in the building, Hayman said. The city had two choices: condemn it as unsafe and help the tenants find new space as required by state law, or take over the property as receiver.

The fact that tenants were in the building was key in helping the city decide to try the receivership option, according to Hayman. On March 26, the city succeeded, convincing a judge in Worcester Housing Court to let a city-contracted property manager take over maintenance, and tenant management rights and responsibilities, from Deutsche Bank, Washington Mutual, Avelo Mortgage, American Home Mortgage Servicing and U.S. Bank National Association – the out-of-state foreclosing lenders or servicers for the eight condos.

Receivership is a different concept from a city taking a property because the owner doesn’t pay taxes, explained Worcester Director of Neighborhoods and Housing Development Dennis Hennessy. Receivers take on the responsibilities of a property manager, he said, but don’t own the property.

The law historically has been used when a city has been unable to force a landlord to fix code violations in a building.

The city of Boston has used it for such reasons, as has Worcester, although the last time either did so was nearly a decade ago.

Boston presently considers receivership to be “too time-consuming and complex” to use in foreclosed, abandoned property cases, according to a Department of Neighborhood Development spokeswoman.

Lowell hasn’t used it to combat properties abandoned due to foreclosure, according to Anne Barton, Lowell’s deputy director for planning and development. Doing so “would be a last resort, because the city has limited resources in terms of taking on tenants,” she said.

Boston had “mixed results” the last time it used receivership in the mid-1990s, against the owners of vacant properties who weren’t caring for them, said Pat Canavan, housing advisor to Boston Mayor Thomas M. Menino.

This time around, the city has decided to purchase four abandoned, foreclosed-upon three-family homes, including two converted condominiums, in Dorchester’s Hendry Street neighborhood, Canavan said. The Boston Redevelopment Authority is purchasing the homes directly from lenders or servicers for $24,000 per unit.

Hayman said Worcester can’t buy abandoned properties at the moment because it’s too expensive.

Receivership requires only the legal fees it takes to file an action, plus up-front maintenance and tenant management costs, which can be recouped when the property ultimately changes hands, Hennessy added. In receivership, the receiver attaches a lien to the property that is the first one paid when it changes hands, he explained.

The lien is estimated and adjusted based on repair and maintenance costs.

Hennessy predicted that a lender would be unlikely to walk away from a property in receivership because if it did, the city – as holder of the priority lien – would foreclose on the property, take title, and sell it, getting back the lien amount plus any additional profit.

Worcester City Manager Michael V. O’Brien said he views receivership as an opportunity to keep people in their homes. “We could condemn a property that doesn’t meet basic standards of safety, but it leaves [tenants] homeless,” he noted.

State law only requires a city to find temporary housing for residents of condemned buildings, adding that Worcester is trying to consider “the human cost” for tenants, and address it.

“The foreclosure crisis is resulting in owners walking away from their properties when they have viable tenants in them,” said O’Brien, who noted that receivership is just one piece of SAVE, Worcester’s new, comprehensive plan to address the foreclosure crisis.

“We are using receivership as a means to keep people in their homes,” he said.

The city also has found that some mortgage holders spring into action when the city threatens receivership, he added, noting that on two recent occasions, mortgagors repaired deteriorating properties rather than face that option.

At any given time, three to five properties are being considered for receivership, O’Brien said.

One lender whose properties are exempt at the moment is Wells Fargo. The national lender has established a hotline that municipalities can call if a property on which they made a loan appears to be abandoned.

Officials in Worcester and Lowell said they’ve used the hotline, and confirmed that Wells Fargo does follow up.

Worcester doesn’t have the up-front cash to continue taking properties into receivership indefinitely, but Hennessy said he’s hoping the city can attract bank or social investors. He added that he’s sure they’ll get their money back.