What can be done to address troubled foreclosed properties? Leaders propose solutions at Woodstock forum

It’s clear that vacant homes put a damper on their surrounding community. Not only are they eyesores, they put other homes at risk of losing value and may attract crime and other destabilizing elements. To minimize these risks, many municipalities have ordinances that allow them to hold the homes’ owners responsible for securing and maintaining the property. What can already-strapped local governments do if it’s unclear who the owner is, or the owner hasn’t notified them that the property is vacant?

Our latest research identified a phenomenon of vacant homes in the foreclosure process that are likely poorly maintained and have an unclear foreclosure outcome. Some of these homes may have ended up in this condition because their loan servicers decided that completing the foreclosure process and taking responsibility for the property would incur more costs than they are ever likely to recoup. These “red flag” properties pose challenges to municipalities trying to keep neighborhoods stable and minimize the negative effects of vacant homes because it is difficult to find the owners and hold them responsible for property maintenance.

We convened a group of experts to discuss how communities can tackle this complex problem. A panel with Bill Goldsmith of Mercy Portfolio Services, Adam Gross of Business and Professional People for the Public Interest, Ed Jacob of Neighborhood Housing Services of Chicago, Richard Monocchio of the City of Chicago’s Department of Buildings, and Madeline Talbott of Action Now discussed how municipalities, community groups, legislators, and financial institutions are responding to the problem and identified steps that need to be taken to return foreclosed properties to productive use. Audience members from housing counseling groups, advocacy groups, financial institutions, local governments, and more participated in a lively discussion on ways to prevent homes from becoming vacant in the first place and pointed out the challenges vacant homes pose to their work.

For ideas on ways to keep homes occupied, hold servicers accountable, and combat troubled vacant homes, please read our white paper summarizing the conclusions of the event.

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