Bank ‘walkaways’ from foreclosed homes are a growing, troubling trend

Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January — five years after her mortgage company filed for foreclosure — that it was still in her name.

Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes.

“I thought I had nothing else to do with that home,” said Atterberry. “I was so embarrassed and humiliated by this.”

Her mortgage company didn’t buy the house and never took it to sheriff’s sale to see if somebody else would, leaving Atterberry the legal owner, responsible for upkeep and taxes.

These so-called “bank walkaways” are another troubling development in the foreclosure crisis, particularly in cities like Cleveland with weaker housing markets, say housing advocates and government officials.

Lenders or mortgage companies decide they don’t want homes they have already foreclosed on, sometimes because the value has plummeted or they believe the homes could become costly liabilities if they are socked with housing code violations.

But without that sale, the property can languish abandoned and ripe for vandalism. As liens and liabilities mount — creating a so-called “toxic title” — it becomes even harder to transfer the property. Neighborhoods and local governments are left to deal with the mess.

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4closureFraud.org