Here are four ways vacant foreclosed homes can hurt you and seven ways you can fight vacant foreclosures and protect your home value:
4 ways vacant foreclosed homes can hurt you
1. You may have trouble refinancing or selling your home to a buyer who needs a mortgage if you live too close to too many vacant foreclosed homes. Appraisers have to report to lenders any vacant or boarded-up homes near yours and to analyze how those vacant homes influence the value of your home.
You’ll begin to have financing trouble if banks don’t pay HOA fees during the foreclosure process. When HOA delinquencies rise to 15%, you could be unable to refinance with a loan guaranteed by Fannie Mae, Freddie Mac, or the Federal Housing Administration.
There are some exceptions to this rule for some condos in markets where the overall foreclosure rate is high.
2. Vacant foreclosed homes are targets forarson and other crimes. If crime and fires occur in the boarded-up, vacant foreclosed homes on your block, you could be charged more for your homeowners insurance or your insurance company may not renew your policy.
3. Your health can be put at risk if nearby vacant homes become dumping grounds for debris that attracts vermin, mosquitoes, and other pests.
4. You’ll either pay higher taxes or lose services when your town has to pay legal fees, police, and fire costs for vacant foreclosed homes. Money spent on vacant foreclosed homes is money that isn’t being spent on schools, parks, and other community services.
7 ways to fight back
1. When you find out a home on your block has been abandoned or foreclosed, make sure local officials know, including the building code enforcement office and the law enforcement officials who patrol your neighborhood.
2. If a bank isn’t maintaining a vacant home that’s being foreclosed upon, call and ask the bank to fix whatever is wrong—to mow the grass, repair broken windows, etc.
3. Can’t figure out who owns a vacant foreclosed home? Push your town to enact a vacant property registration. In towns with VPRs, owners of vacant homes have to provide contact information to local officials and the public. You’ll find sample VPR legislation and forms from other communities at the Safeguard Properties website. Share that information with local officials.
4. Suggest to local officials that they could be earning money by fining banks that don’t maintain properties. Los Angeles just passed an ordinance that will charge banks up to $100,000 for failing to keep up vacant foreclosed homes.
5. Publicize the issue by writing aletter to the editor or starting a petition about the condition of the vacant foreclosed home in your neighborhood. If a bank owns the home, it’s not going to want negative publicity.
6. Start a neighborhood crime watch program to keep an eye on vacant foreclosed homes. Even if you don’t have a formal group, ask your neighbors to report to the police any suspicious activity they see at the vacant foreclosed property.
7. You may have to do the maintenance yourself (think of it as playing defense on the property value team) if your neighbors walk away from their house and mortgage.
You and the others who still live on the block can take turns mowing the lawn, shoveling the snow, and parking a car in front of the house, so would-be buyers aren’t turned off by the lack of yard care and criminals can’t identify the house as an obvious vacant foreclosed home. You can alert the post office to the vacancy and ask the newspaper to stop delivery, or just pick up the paper and fliers after they’re delivered.
Before you take on any of those tasks, check local trespass laws so you know whether doing the extra chores that will protect your property value could potentially land you in trouble. If you know the neighbors are going to leave the house vacant, ask them to sign a statement giving your group permission to take care of the home in their absence.