Attorney Stephen Elias says empty homes attract vandals looking to make a quick buck and he fears the trend will increase as the thieves become more organized.
It is easy to spot.
The grass is crispy brown. Backyard weeds peek over the top of a 6-foot-tall fence. The trees are dead and swarming with insects. Fading notices are duct taped to the broken garage door and to the front door. Old newspapers and a sack of phonebooks sit on the sagging porch. It is the foreclosure next door — a symbol of pain and sadness and a harbinger of property values dropping.
Gaynell Instefjord has seen it all. For more than a dozen years the associate broker at Coldwell Banker Residential Brokerage in Sandy, Utah has worked selling foreclosed houses for several bank clients. In the best of circumstances, she says, it is a long process.
But it isnt the best of circumstances right now. In Utah, where Instefjord works, foreclosures totaled 6,567 during the third quarter, ranking the state in 6th place for the most filings. Foreclosures fell 39 percent from the previous year. Nationwide, foreclosure filings fell 38 percent to 214,855 in September.
This means that few people don't have a foreclosed or abandoned home in their neighborhood. There are things that neighbors can do, however, to preserve property values and maybe even get the home sold.
The process to foreclose takes time. The bank has to wait for three consecutive missed payments before it can issue a notice of default. Then another three months go by to give the homeowner a chance to fix the problem. The bank then files a notice of trustee sale. About 30 days later the trustee sale occurs and the foreclosure is complete. In all, it's a seven-month process. "That's the quickest it can happen," Instefjord says. "The process is dictated by the trust deed and note the borrower signed when purchasing the property."
But it doesn't have to go that fast.
Some banks, particularly with the high number of defaults these days, may wait for more than 12 months of missed payments before starting the process.
This means the bank is not the owner of the abandoned home until it is foreclosed. It can't keep weeds down and secure the property against vandalism. It can't board up broken windows and tarp a leaky roof to protect the house against further damage.
"Neighbors get upset that the house sits and looks bad and they wonder why somebody doesn't do anything about it," Instefjord says. "The reality is as long as the consumer owns the property, the bank can't do anything to it at all."
Behind Foreclosed Doors
Kitchen cabinets are torn down. Sinks and bathtubs are taken out. The baseboards are ripped out. Heating elements are removed from water heaters. Bleach is poured on carpets. Some people are not happy about losing their home.
"These types of actions come from that kind of anger you find at Occupy Wall Street. People get out of control on how they feel about banks," says California attorney Stephen R. Elias. Elias is the author of "The Foreclosure Survival Guide: Keep Your House or Walk Away With Money in Your Pocket" and is a contributor at Nolo's Bankruptcy, Debt & Foreclosure Blog. "You might say people brought this situation on themselves — and you would be right. But other times you would be wrong. The people were steered into a subprime mortgage when they could have afforded a prime mortgage — and in the end they weren't able to afford the payments. They were cheated by their broker and the whole system and so they are angry."
That anger makes the house harder to sell and certainly won't help the neighbors, but spite isn't the only dangers a neighborhood foreclosure might face.
Elias says empty homes attract vandals looking to make a quick buck and he fears the trend will increase as the thieves become more organized.
So what do thieves find in an empty home? Copper.
Instefjord told of a foreclosed home that was repaired before putting it on the market and was under contract. The buyers were conducting an inspection and called Instefjord to ask why the stove didn't work. She sent over a contractor who found someone had gone into the crawlspace and cut out all the copper pipes and pulled the electrical wiring out of the home above.
Sometimes squatters will move in and live in foreclosed homes even if there is no electricity or water. Other times people will move into a foreclosed home because they were scammed.
Every week Instefjord checks the foreclosed homes in her inventory. Recently she discovered someone moving into one of the homes. He said he was a recent widower with children and he was renting the home. He had apparently been scammed. Someone had changed the locks and charged the man a security deposit and one month's rent. Unless he voluntarily moves out he will have to be evicted.
"There are many ways to scam and an observer cannot always tell who is guilty of scamming," Instefjord says. "It's sad when someone like this gentleman seems to have been treated unfairly and has spent money that he will never recover." But sometimes the person who has moved into a house isn't a victim and is actually a scammer trying to play the system, hoping the bank will pay them to move.
"It is not my place to judge or decide who has been a victim of a scam and who is the perpetrator of the scam," she says. "My job is to deliver the message of the foreclosure and give the occupants written notice of their rights as a consumer. The eviction attorneys take over and deal with the next steps. Many times I have to insulate my own emotions from what is happening."
Securing the neighborhood
When a foreclosure happens Elias calls it a neighborhood watch situation and even recommends putting up a sign telling potential thieves they are being watched. But keeping an eye on the property is only the beginning.
The first step is to discover if the home has been foreclosed and which is the new bank owner. There may be a notice on the home that indicates who the bank is. A call to a title company or a trip to the county recorder will also say who the new titleholder is.
Elias thinks that as a neighborhood and as a community people need to call a meeting and decide together what they are going to do about foreclosures. A letter written to a bank by a group of people carries more weight than a letter by just one person.
Instefjord says, "For the most part, if a bank owns a property and knows it is not being maintained, they will do something about it. Most of them don't want to be bad neighbors because they want home buyers to use them to obtain a mortgage down the road. You can't be a bad neighbor and not get a bad rap."
But neighbors shouldn't wait for the bank to take action.
"If it were my neighborhood, I'd ban together with my neighbors and make sure it looked good from the front," Instefjord says. "We go to neighbors and ask them to help watch the house to make sure vandals are not breaking in and if the neighbors see something they don't like, please call the police."
"You can volunteer to cut the lawn and water plants — anything that will take away the signs of blight," Elias says. "You don't have to wait for it to deteriorate."
If the bank hasn't foreclosed on a property, you can encourage them to foreclose, Instefjord says. If you don't like how the bank is taking care of the property, let them know or contact the city to complain. Elias suggested that it might be possible to sue banks to take care of the property if needed.
But action needs to be taken by the neighborhood for the best results. "The foreclosure process is not designed to help communities," Elias says.
But the process is necessary.
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