Banks Refusing to Take Foreclosed Homes

Tuesday, July 21, 2009

Local officials in Ohio say Cuyahoga County may be at the forefront of dealing with a growing national problem of banks walking away from foreclosed homes, leaving them to decay and become nightmares for former owners or local neighborhoods. The state’s largest county, and home to the city of Cleveland, has a growing list of stories like that of Renetta Atterberry, who lost her house to foreclosure five years ago. But in January Atterberry found out her former home was still legally hers—leaving her responsible for a vandalized property and housing code violations—because the bank never took the home to auction. In a growing number of cases, banks have determined that the total expenses of the foreclosure process are greater than the auction value of a house.

 
In an effort to keep bank-abandoned properties from littering Ohio neighborhoods, state lawmaker Dennis Murray of Sandusky is sponsoring a bill that would require lenders or mortgage companies to take foreclosed properties to auction within a specified time, or face the risk of losing their mortgage lien. Properties that don’t sell could go to a local land bank, under the legislation still being crafted.
-Noel Brinkerhoff
 
Bank 'Walkaways' From Foreclosed Homes Are a Growing, Troubling Trend (by Sandra Livingston, Cleveland Plain Dealer)
Banks Starting to Walk Away on Foreclosures (by Susan Saulny, New York Times)

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