Foreclosed but not forgotten

O’Fallon’s new foreclosure task force is taking a proactive approach to curb the destructive impact of abandoned foreclosed properties on the city’s neighborhoods and home values.

The city’s code enforcement team has seen an increase in the number of foreclosed homes that are left to deteriorate once the property’s ownership reverts to the lender. The team aims to curb the deteriorating condition of abandoned properties by involving neighbors and going after banks that allow properties to deteriorate.

Though foreclosures aren’t as prevalent in O’Fallon as other cities in the region, the city’s task force liaison, Police Officer Bill Dolan, said “we’re trying to nip this in the bud so it doesn’t become an issue.”

He explained that many homes are left vacant for up to a year, and in that time, many of those houses deteriorate. The homes also are targets of vandals and squatters.

Dolan’s sole duties now are in neighborhood preservation. He identifies vacant properties and tracks down the reason they are empty and who owns them by contacting real estate agents and checking the county’s database of homes.

At this time, the city has identified  130 foreclosed homes in O’Fallon, with all areas impacted to the same extent, Dolan said.

“We as a city won’t be maintaining the property, but we can enforce a bank to maintain it,” he said, by citing the lending institution for code violations.

For example, if the grass on the property is over 8 inches high, the city will issue a ticket. If the grass isn’t mowed in five days, a search warrant will be issued and the city will mow the lawn and bill the property owner in excess of $500. If that bill isn’t paid, the city can put a lien on the property.

Abandoned homes can deteriorate to the point of being condemned by the city for being uninhabitable.

Dolan said the worse case he’s seen is a $400,000 home that had to be condemned by the city because the owners completely stripped the house when they were foreclosed on by the bank.  He said the owners took both air-conditioning compressors, the furnace, the water heater, all the cabinets and carpets in the home, as well as the toilets and light fixtures. When the owners left, the doors were left wide open.

Dolan said the city wrote a letter to the bank to explain that the home can’t be sold in a condemned condition and what issues have to be fixed prior to putting it on the market. He added that the bank may want to press charges against the former owners.

St. Louis Attorney Greg White said that stripping a home of items that are built in, such as ovens or fixtures, is a crime because it is destruction of property. White, who represents homeowners who are facing wrongful foreclosures, said that type of case is rarely ever prosecuted because it’s hard to prove who the culprit is.

Dolan said the city is waiting to hear from the bank in that particular case, and that overall it has been difficult to get in contact with the lenders.

“If it gets to a point that it needs to be done, we can get a subpoena and fix the home,” he said. “We haven’t had to do that, and hope to never have to do that, but it is within the law to let us do that.”

Katharyn B. Davis is a St. Louis attorney who represents lenders in foreclosure cases, from individual investors to major banks.

She said a lot of banks are overwhelmed with a glut of foreclosed properties and are having trouble handling what they have and selling them.

“Banks are not in the business to own homes” nor are they set up to be property managers, Davis said, and there’s a lot of cost to maintain a home.

In a rational marketplace, lenders will only foreclose homes when they can recoup their money, Davis said, and in a growing number of cases banks opt out of foreclosing.

“I have banks tell me that they won’t foreclose on a property,” she said. In that case, the home will be left to deteriorate until it’s sold for taxes.

This could make it difficult for cities like O’Fallon, that are trying to enforce city codes.

“If the bank hasn’t foreclosed on the property and the homeowner abandoned the property, then the city might not be able to pursue them,” she said.

Officer Dolan said he is in the process of talking to home owner associations about what they can and can’t do legally to maintain foreclosed properties in their neighborhoods. A neighbor can go into the yard if there isn’t a “no trespassing” sign on the property. No one can enter the home without a search warrant.

“If a neighbor takes the initiative to mow the lawn and pick up the papers, no one will know there is a foreclosed home,” he said. “If they can’t handle the situation, that’s when we want to get involved.”