When owners walk, 'zombie' homes become nuisance

Story originally appeared on USA Today.

A zombie-titled property is in a gray area between the homeowner and the bank that foreclosed on the home.

MELBOURNE, Fla. -- Zombies are everywhere lately, it seems. TV shows, video games, even chasing runners during special 5K races.

You might even have a zombie next door. The first sign of trouble: An unmaintained yard, growing wild amid summer heat and rain.

"Zombie" properties — homes abandoned by the owners, but still not reclaimed by banks — continue to be a problem in Brevard County, Fla., even as the worst of the foreclosure crisis has passed.

In Brevard, there were 6,920 homes somewhere in the process of foreclosure in June, according to RealtyTrac, a California-based real estate information company.

Of those, 1,903 are homes vacated by their owners, the company said.

RealtyTrac compared data of properties in default or scheduled for foreclosure auction with data from the U.S. Postal Service indicating whether a home has been vacated by the homeowner.

Florida had 55,503 owner-vacated properties in June, more than any other state.

"Florida has the twin problems of a high foreclosure rate and a very lengthy foreclosure process," said Daren Blomquist, vice president at RealtyTrac.

"That means it is more susceptible to having these zombie foreclosures, because you have a homeowner who could be in foreclosure for two or three years and decides to walk away from the situation."

Brevard, with 28% of foreclosed homes vacated, was above the national average of 20% and state average of 23%.

The problem is particularly acute in the summer when it quickly becomes obvious which homes are not being maintained.

"The rainy season is always my busy time," said Maddie Curtis, code enforcement officer for Rockledge, Fla. "My case load doubles or triples this time of year."

When the lawn grows too high, along with other signs of neglect, Curtis steps in. But with a zombie, neither party will take responsibility and the city is left to maintain and place liens on the property.

She sends e-mails to banks and homeowners, makes follow-up phone calls, and e-mails pictures of violations while she builds a case file on each property.

"I do a lot of documentation for the foreclosures," Curtis said. "The whole foreclosure-mortgage situation is an absolute mess."

The housing collapse that began several years ago left homeowners owing banks much more than their houses were worth and they just walked away from properties in foreclosure.

The exodus might have slowed, but there were 6,142 foreclosures filed in Brevard County last year and 2,587 through the first six months of this year, according to county records.

Until a bank follows through on a foreclosure and accepts title of a property, an absent and unaware homeowner remains on the title and responsible for the property, even after going through bankruptcy.

Meanwhile, a zombie-titled property can rack up thousands of dollars in liens in the homeowner's name ready to ambush the next potential owner while it threatens the health and safety of a neighborhood.

"It is an ideal breeding ground for snakes, cockroaches, mosquitoes as well as other insects and critters," said Curtis, who became Rockledge's code enforcement officer in 2009. "Generally things that can make someone's life miserable."

A zombie-titled house in north Rockledge has plagued the otherwise well-kept neighborhood for more than a year.

The homeowners, Brenda and Cleo Hillmon, were notified their house was in foreclosure in June 2011, according to Brevard County records. They left the house and filed for bankruptcy.

Since then, Curtis has had to respond to complaints from neighbors about the property for more than a year.

Last year, Curtis sent two code violation notices to the Hillmons,who still live in Brevard County, asking them to mow the lawn or the city would do it and bill them $300.

Cocoa, Fla., attorney Carole Suzanne Bess responded in writing to the city, stating that the Hillmons had filed for bankruptcy and sanctions would be sought against the city if the couple received further notifications, according to the letter on file with the city of Rockledge.

The vacant house had become a haven for an unwelcome element in the neighborhood.

"The neighbors were calling me stating that the house was being used as a crack house," Curtis said. "When the neighbors would call me up, they said whatever you do, don't go talk to them because they are bad, they're bad news."

The large volume of foreclosures in the system has created a backlog that could take a single case 18 months or more to complete, Bess said. She suggests homeowners remain in the house or rent it during the foreclosure process.

"I tell people to stay as long as they can because you are really doing your neighbors a service and helping yourself," Bess said. "If it is occupied, there is less that can go wrong."

Palm Bay has 1,911 properties in active foreclosure and 439 that are owner-vacated, according to RealtyTrac.

Brevard's largest city has a $200,000 annual budget to maintain properties that violate the code and the city has to step in.

The city will send the owner notice that they have 20 days before the city deals with the problem.

"That includes not just mowing but securing if the house's windows are broken," said William Martinez, supervisor of code compliance section for Palm Bay.

Martinez is also familiar with the zombie-title situation that creates orphaned properties.

"We have quite a few of them," Martinez said. "(Banks) are getting the judgment in court, but they are withholding applying for the certificate of title that would give them possession of the property."

Most Brevard municipalities require banks to register vacant properties in foreclosure and provide contact information.

"We require them to register with us and maintain the property," said Dan Porsi, Melbourne, Fla., code enforcement administrator. "Usually, all we have to do is call them and they have somebody out there."

But banks typically hire private companies to take on maintenance duties of these properties. That can take as long as 60 days to happen.

"Meanwhile, we have a house that is not being maintained for a couple of months," Curtis said. "Then it could take another month to get through their maintenance cycle."

Curtis sees 10 or more overgrowth cases each month and the process of finding the guardian for a property starts again.

"The homeowner has no legal rights to the house, but because they are on the title, they have all the liability for what happens to the house," Curtis said. "It's a zombie title."

Vacated homes in foreclosure

Here are the number of properties in the foreclosure process and the homes that owners have vacated:

U.S.

Foreclosed homes: 844,640

Owner-vacated homes: 167,680

Percentage: 20%

Florida

Foreclosed homes: 242,772

Owner-vacated homes: 55,503

Percentage: 23%

Brevard County, Fla.

Foreclosed homes: 6,920

Owner-vacated homes: 1,903

Percentage: 28%

Source: RealtyTrac