Neighbors concerned about foreclosed properties

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Sunday, November 22, 2009
— There goes the neighborhood.

That’s the opinion of one Janesville couple who have watched a neighboring property plod through foreclosure.

From their perspective, the goings-on at the home on Janesville’s east side have really involved not much going on, other than a yard that’s taken on the appearance of a jungle.

The owners are long gone, and the bank has called in the mortgage. The property will be sold at a foreclosure sale before the end of the year.

In the meantime, the grass and shrubs grow, the snow will soon fall, and the neighbors’ frustration escalates.

“Something’s got to be done,” say the neighbors, who prefer to remain anonymous in the interest of neighborhood harmony. “This vacant property is a detriment to our neighborhood.”

It’s no secret that foreclosure filings have increased in Rock County. The clerk of circuit court’s office reported 980 in 2008.

So far this year, there have been nearly 1,100.

As the filings have increased, so have the neighbors’ phone calls to anyone connected to the foreclosure process, which can stretch from months to a year or more.

“We certainly have received more calls,” said Kelly Lee, neighborhood development specialist with the city of Janesville. “People move out, it goes into the process and the house just sits in limbo.”

Lenders get the calls as well, but liability concerns typically tie their hands until they have free and clear title to a property after a sheriff’s sale.

Most local lenders, however, will try to see that grass is cut and walks are shoveled. Lenders often will encourage the property owner to keep up their property for safety reasons.

“We work in this community, and it’s our responsibility to do what we can, when we can,” said Mary Willmer-Sheedy, community president of M&I Bank in Janesville.

But the overwhelming majority of lenders pursuing foreclosure actions in Rock County are not local.

“We often have trouble contacting or getting a response from some of those banks,” Lee said.

‘It’s just sitting there’

If a yard becomes too overgrown or snow and ice create a safety issue, the city can step in and mow or plow. Broken windows often are boarded up.

The bills get sent to the homeowner, but they typically aren’t paid until a new owner emerges at the end of the foreclosure process, Lee said.

Real estate agents field the neighbors’ calls as well. Often, their names on a yard sign are the only connection neighbors have to the process.

“Many times, the house is owned by a large bank or asset management company, and it’s really tough to get a hold of anyone to talk about the property,” said Blair Winn of Winn Realty in Janesville.

Winn, president-elect of the Rock-Green Realtors Association, said some government loan programs have strict rules about a property’s upkeep.

But others don’t, he said, and neighbors shouldn’t hesitate to call the city and ask that their concerns be directed to the lender.

Janis Dye has had her eye on the property next to her Hand in Hand Learning Center on Ruger Avenue for nearly a year.

A “For Sale” sign went up one month and came down the next.

“Now it’s just sitting there,” said Dye, who co-owns the pre-school. “It makes you wonder what’s going on.”

The home is vacant. A couple windows need exterior trim, a garage door is badly dented and the grass is long and leaf-covered. A few of the former occupants’ belongings sit outside.

Foreclosure started Jan. 20. The property was sold at a sheriff’s auction at the end of October for nearly 22 percent below its assessed value. Confirmation of the sale is expected in December.

Dye said that since she doesn’t live at Hand in Hand, her concerns about the property are fewer than they would be if she was a next-door residential neighbor. Parents waiting in line to drop off or pick up kids at Hand in Hand often ask what’s going on with the house next door.

“I’d like to see the yard kept up, and we don’t know what will happen when it starts to snow,” she said. “I’d like to see a family move back in.

“It does kind of make the neighborhood look shabby.”

Property values

Neighbors typically fear that a foreclosed property adversely affects the value of their own property. In some foreclosure cases, the property falls into serious disrepair and is sold well below market price.

But in his 25 years of doing house appraisals, Paul Burkart has never docked one property because of the condition of a neighboring property in foreclosure.

“There are so many variables we consider in appraising value,” said Burkart of Modern Appraisal Services of Janesville. “Some of the things typically associated with a foreclosure—overgrown grass, broken windows—are what we call external depreciation.”

“We typically value on similar sales, and a distressed sale is not a comparable that we would consider.”

That said, Burkart said the situation could change if a neighborhood is overrun with foreclosure sales of properties that have significantly deteriorated.

Local appraisers, real estate agents, lenders and city officials understand neighbors’ frustration. In fact, they can often share a story about a foreclosure sale in their own neighborhood.

Neighbors often feel inclined to take on the lawn work or plowing. But officials say they shouldn’t because of liability concerns.

“They should definitely contact us before calling the lender or a Realtor,” the city’s Lee said. “Sometimes, there’s something we can do to help. Other times there’s nothing we can do.”

Last updated: 11:54 am Thursday, December 13, 2012

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