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A new crisis: Lenders abandon properties

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Faulkner Avenue in Dayton is filled with vacant houses. Angel Borger says she'll never own another house after getting caught up in a real estate scam, which forced her into bankruptcy and left her with worthless properties even the banks have walked away from. This is the scene across the street from Borger's house.

Chris Stewart/Chris Stewart Faulkner Avenue in Dayton is filled with vacant houses. Angel Borger says she'll never own another house after getting caught up in a real estate scam, which forced her into bankruptcy and left her with worthless properties even the banks have walked away from. This is the scene across the street from Borger's house.

Owner, neighbors, city left to deal with a home that no one has any incentive to improve.

By Ken McCall, Staff Writer Updated 11:43 PM Saturday, October 17, 2009

DAYTON — As if the mortgage foreclosure crisis wasn’t bad enough, sometime last year a new phenomenon began to emerge: Experts say mortgage lenders and banks began walking away from foreclosed properties, especially in urban areas.

The so-called “walkaways” can occur along several different paths, but the effect is the same — after threatening or getting foreclosure, the lender attempts to abandon the usually vacant property, leaving the original owner, the neighbors and the city to live with the damage.

Owners often accumulate taxes and zoning enforcement fines on property they believe they no longer own.

Neighbors watch their property values decline as the vacant property deteriorates and is often broken into and stripped.

Cities then have to bear the cost of boarding up a structure, maintaining the lawn and, eventually, demolishing it.

Dayton housing inspector John Carter did a study last year of 302 vacant and abandoned residences in the city and found that about 70 percent were bank walkaways. Of those walkaways, he said, about 20 percent had mortgages but no foreclosure was ever filed.

“There are several tragedies to it,” said Richard Stock, director of the University of Dayton’s Business Research Group. “The very first tragedy is, my God, these people could have continued to be in their house all this time, maintaining it. And then there’s the impact on the community.”

Keep reading: Owners of abandoned properties are hard to track down

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Eddie,

How about the City grows some nerve and goes after the OWNERS of these properties. Why should they be exempt from taking any responsibilty?
I am sick and tired of the whole wo-is-me attitude and blaming Banks/Government for the problems that the people themselves have created!

And, SB123, I agree. But I would like to add that this crap exists in ALL inner city Black communities. Pick your favorite big city and I guarantee you will find the same behavior across the board.

Jerry
5:28 PM, 11/2/2009

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Dayton is sharply divided along racial lines East (white) Dayton and West (black)Dayton.

The violence in West Dayton led to white flight (1970's) due to forced desegregation in the schools.

In response, the blacks in West Dayton by even worse behavior and engaging in "Deliberate Devaluation" - a pattern of behavior that discourages anyone other than blacks from wanting to live there.

Nothing is really going to change in the areas where banks are abandoning properties.

SB123
1:42 PM, 11/2/2009

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I hope bush can sleep at night, He is worse than hoover, he really screwed this country, all because of a buck of oil.

Martha
9:17 AM, 11/2/2009

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Dayton needs to grow some "nerve" and go after these lenders in the courts. If Deutsch Bank walks away from a property that costs the city $40K (maintnance, boarding up, Police/EMT calls for squatters or injuries, demolition), then Deutsch Bank should pay the $40K PLUS DAMAGES to the neighborhood / neighbors who have suffered.

Dayton's greatest asset is it's historic properties, and this crises is like a WW2 bombing on some of Dayton's most vulnerable neighborhoods.

Eddie
10:29 PM, 10/19/2009

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This whole mess started back in the late 1970's when Wall Street & Washington decided that they could make more profit with finance than in the production of real goods. Deregulation of financial institutions enabled higher debt levels & higher risk brought higher returns. Investment was chaneled away from factories & into very complex financial instruments. They care only about themselves and profit. Watch 'House of Cards' on CNBC some 3-day National Holiday Weekend & see how it all collapsed.

Bill Simpson in Slidell LA.
3:30 PM, 10/19/2009

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