Foreclosure process confuses many

Last updated: September 01. 2014 6:44PM - 1677 Views
By - mkennedy@civitasmedia.com

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LIMA — Confusion about who is responsible for maintaining property during foreclosure or bankruptcy proceedings is putting an added burden on Lima’s code enforcement.

In the limbo of the foreclosure process, many property owners incorrectly believe they no longer have the responsibility for their property’s maintenance issues. Lawns become overgrown, weeds spread, and other maintenance issues lead to further deterioration of the home. This deterioration can also lower the property value of surrounding homes.

City maintenance workers use money from the city’s budget to address the issues, but the attention paid to these properties can be seen as a distraction from other maintenance-related issues in the city, said Councilwoman Teresa Adams.

“Everybody’s pointing the finger at each other. … So we’re spending taxpayer’s money, (Community Development Block Grant) money, to maintain these properties and vacant lots and it’s very frustrating,” Adams told the Lima City Council’s Public Works Committee last week.

Confusion of who technically owns the property faces many individuals in the foreclosure process. In the majority of cases, the name tied to the home’s address on the deed records, found on the county auditor’s website, will remain associated with the property until a sheriff’s sale is complete and the title is transferred.

Although residents may be served the papers stating their home is undergoing the foreclosure process, it does not necessarily mean they are being immediately evicted from their homes. Amy Sackman Odum, director of city of Lima Department of Community Development, said residents must understand their rights in the foreclosure process as well.

Oftentimes, the bank will choose not to see the foreclosure through to the end, withdrawing its foreclosure notice and the resident has moved from the home, leaving it vacant and legally in the resident’s name.

“Unless the court orders the person out of the house, you can stay there during foreclosure. Just because you’ve been served the papers doesn’t mean you have to move out,” said Lima Law Director Tony Geiger.

Identifying the owner of the now-vacant property is not difficult, Geiger said during the committee meeting. The issue is getting the previous owner, if he or she is able to be located, to act upon requests made by the city to act on maintenance issues with the home.

Demolition is an option for homes that are vacant, and is widely used, Lima Mayor David Berger said. Where area officials would previously demolish 30 homes per year, the rate has increased to roughly 250 to 300 homes in a three-year time period, Berger said.

Properties that are deemed unsafe and hazardous to the community are the properties that are considered a higher priority for demolition, Berger said, as there isn’t enough funding to maintain all vacant properties in the area. Once the property is demolished, a vacant lot is left behind.

While lots can be sold at sheriff’s sales, the legal department can investigate if the property owner has other assets. If other assets are found, lawsuits can be taken against the individual “because if we get a judgment on the lawsuit, it attaches to all other assets that do have some value,” Geiger said.

The same holds true for bankruptcies, Geiger said. Filing bankruptcy does not negate the homeowner’s legal ownership of the property. In many cases, a bank may not want the property back because the home has little or no value, Geiger said. This leaves the person who filed for bankruptcy as the homeowner.

“Legally, they have not washed their hands of it as they think that they have done,” said Geiger.

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