The vacant house, with its peeling paint and broken railing, stands out as an eyesore among well-maintained homes in the middle of a block in South Buffalo. It has become a zombie house – abandoned by its owner but not foreclosed upon by the bank.
And there are hundreds, perhaps thousands, like this one across Buffalo and its suburbs, sucking life and property values out of good neighborhoods.
In rich and poor areas, homeowners have walked away from homes after they could no longer make their mortgage payments and banks gave notices of foreclosure. Even though the homeowners moved out, the banks have not completed the foreclosures or put the properties up for sale.
The empty houses deteriorate, frustrating neighbors and burdening local governments left to deal with them.
“The scope of this problem is enormous,” said Buffalo Housing Court Judge Patrick M. Carney. “Trying to get something done with these properties before they’re worthless – it’s horrible.”
The houses fall into disrepair, but the banks pay the taxes on them, preventing the city and county from selling them in auctions.
A house in West Seneca became worthless and had to be torn down earlier this year as a health hazard.
“I can’t tell you how many people wanted to buy that property,” said Sharon A. Kimaid, a neighborhood resident.
On a corner lot in Cheektowaga, plywood covers the windows of an empty house in such bad shape that the town wants to demolish it, too.
In Amherst, a task force formed to deal with these properties has its sights on an Eggertsville house, where gutters are falling off and a frayed blue tarp hangs from the roof.
Many who are affected by these zombie foreclosures – neighbors, code enforcement officers, and town and state officials – blame national banks for the problem, calling them unresponsive.
Banks blame New York’s laws that stretch out the foreclosure process here longer than that of any other state.
Experts warn of another wave of homes headed into this foreclosure abyss.
And what of the homeowners who thought they walked away from it all?
They often end up surprised they are still legally responsible for the houses, in some cases owing fines for code violations.
Gone but on the deed
For years, Patrick V. Occhino thought he was free and clear of his former home on Eaglewood Avenue in South Buffalo.
His now-vacant house sits in the middle of a block paved with red bricks and lined with trees, where flowers planted in window boxes adorn well-kept, single-family houses.
Occhino, 29, bought the house in 2006 but walked away six years ago when he could not pay the mortgage.
Needing a job, he enlisted in the Army and moved around a lot, which made keeping track of his mail difficult.
He sent Wells Fargo his bankruptcy filing and considered his connection to the property finally over. He did not hear from the bank again.
“I’ve been trying to get out of this house,” he said.
But earlier this month, he was startled to learn his name is still on the deed.
Worse, a judge issued a warrant for his arrest after he missed a Housing Court date while he was stationed at Fort Drum. The warrant for his arrest, over allegations of code violations, arrived at his father’s house. The matter has since been resolved.
Occhino has not been around, but his former neighbors have seen enough of what he left behind.
Overgrown shrubs grow next to a decorative barrel filled with snack wrappers and a moldy telephone book.
The neighbors have chased away kids and called the police when a squatter moved in.
They pitch in to cut the grass, shovel the sidewalk and even park their cars in the driveway to make it look like someone lives at the empty house.
“It affects all the other houses,” neighbor Mike Mulderig said.
“It’s not in our best interest at all to allow a property to fall into disrepair,” said Tyler Smith, a vice president at Wells Fargo for community development. “Our hands can be tied with the laws and foreclosure process.”
South Buffalo’s councilman has pressed banks to act faster to prevent homes from becoming zombie houses.
“There are beautiful homes sitting there empty,” said South Council Member Christopher P. Scanlon.
Scanlon sent petitions to 9,000 residents and businesses in the district, seeking to put pressure on the banks. He collected 3,000 responses and forwarded them to Wells Fargo and Citibank’s mortgage division.
Since then, the communication with the banks has improved, he said.
These zombie foreclosures are prevalent in South Buffalo, but occur all over the city and the suburbs.
In West Seneca, town officials approved a rare home demolition earlier this year on Round Trail Road, where the owner died and the house fell into foreclosure.
It sat empty for three years. Its roof leaked. The basement flooded. An in-ground pool had not been drained.
Black mold made the house a health hazard. And birds and raccoons moved in.
Kimaid, who lives next door, watched the house deteriorate and wrote letters to Citibank about the property.
“Who wants to live next door to this trash? Certainly not me,” she said.
A property maintenance company cut the grass. But no other repairs were made.
“So what if they mow the lawn, everything is falling down around it,” West Seneca Supervisor Sheila Meegan said.
The bank did not foreclose on the Round Trail Road house. The dead homeowner’s name remains on the deed for what is now a vacant lot.
Citibank, which holds the mortgage on the property, tries to “move quickly” to secure abandoned houses, said Mark Rodgers, the bank’s director of public affairs.
But many times, the bank does not have the legal right to access pre-foreclosure properties, Rodgers said.
“In addition, properties have often been neglected by occupants for a long time before foreclosure and have deteriorated,” he said.
If a house shows a lack of property maintenance, West Seneca will complete the work, typically with a private crew the town hires, and add the cost to the tax bill.
In Cheektowaga, town officials are preparing to demolish a house at 257 Chapel Ave., which has been vacant for nine years. The town plans to bill JP Morgan Chase.
The bank, however, has released its lien on the property.
“In some cases, it’s good for the community to release the lien and allow the city to use the land for other purposes,” said bank spokeswoman Amy M. Bonitatibus.
On a recent visit to a zombie house on Dellwood Road in Amherst, a gutter was dislodged and a frayed blue tarp was loosely attached to the roof.
Bank of America has assigned upkeep to a property maintenance company, its spokeswoman said.
The banks say they are not interested in letting the houses deteriorate.
Banks – typically national ones not located in Buffalo – point to New York’s foreclosure laws, which can prolong the foreclosure process to more than 900 days. The banks hire property management firms to maintain them.
But a bank can have a financial interest in not completing a foreclosure, if the cost to foreclose is more than the price it expects from a sale, said Daren Blomquist, vice president of RealtyTrac.
“There is going to be a day of reckoning where someone is going to be responsible for that home,” Blomquist said.
The national foreclosure crisis did not hit the Buffalo region with the same magnitude as it hit the rest of the country.
But foreclosures have occurred, and they are on the rise.
In New York, the number of these properties where the bank has begun the foreclosure process, but not finished it, surpasses most other states.
New York ranks fifth among states, with 9,173 “zombie foreclosures,” following national leader Florida, which has more than 55,500, according to an analysis released last week from RealtyTrac, a real estate research firm.
The Buffalo metro area has a high rate of vacant properties among homes in the foreclosure process – 22 percent – compared with the state average of 13 percent and the national average of 20 percent.
New York had the highest year-over-year increase – 129 percent – in unlisted foreclosures, or those where the foreclosure process has started but the properties have not been listed for sale, according to RealtyTrac’s analysis in March.
New York has seen a year-over-year increase in foreclosure activity every month for the last 13 months, driven by foreclosure starts, said Blomquist.
“We’re just seeing the beginning of another wave of activity with foreclosure starts,” Blomquist said.
There were 1,750 foreclosures filed in Erie County last year, up 53 percent from 2011.
That is less than nearly 3,000 in 2006, according to the Western New York Law Center.
Currently in Buffalo’s Housing Court, the number of housing violation cases related to zombie foreclosures is between 300 and 400.
Carney, the Housing Court judge, said he believes there are many more zombie foreclosures, but they just have not reached his courtroom yet.
In Cheektowaga, there are 296 zombie foreclosures, accounting for 46 percent of the town’s vacant properties, said Council Member Charlie Markel.
Some of the houses sit with no activity for three or four years.
Where it starts
Zombie foreclosures begin like a typical foreclosure, when people do not make their mortgage payments.
The homeowners receive carefully worded notices from the bank notifying them about the beginning of the foreclosure, leading them to believe they must move out.
Other times, banks reverse the foreclosure process, allowing the homeowner to remain in their house. But often the residents have already abandoned the property and cannot be found, Carney said.
“To call it a quagmire would be an insult to quagmires,” he said.
In New York, courts oversee foreclosures, providing protections for homeowners but also lengthening the process.
The common complaint is that banks are not responsive to neighbors of these properties, local government officials, or even judges.
It can be a challenge just to find the right bank to make a complaint.
Sometimes the mortgage has been sold so many times that local municipal officials struggle just to discover which lender controls the property.
Even if they know what national bank to call, getting help is hard, local officials said.
“You’re not talking to someone high enough in the food chain to make a difference,” said Markel, the Cheektowaga council member.
“Very, very often we get no response from the banks, any response at all,” said Carney. Assemblyman Michael P. Kearns said he assigned a member of his staff to wait on hold for 10 hours at a time to connect with someone at a national bank about problem properties in his district.
“The biggest problem is the faceless organization,” said James Comerford, Buffalo’s commissioner of Permits and Inspection Services. “We need someone to talk to.”
Tougher laws sought
Beyond trying to talk to the banks, local officials also bill them for maintenance that government crews provide.
But it has become a challenge for local governments to keep up with which properties are deteriorating.
Western New York lawmakers are pushing several bills, but none would shorten the time banks are required to wait to finalize a foreclosure.
Kearns is sponsoring a bill in the Assembly to require banks to notify municipalities when foreclosures have started and post contact numbers for banks or property managers on the houses.
Another bill, sponsored by State Sen. Tim Kennedy, would require banks to maintain vacant properties in foreclosure. The bill includes stiff penalties and even prison sentences.
Banks oppose these bills.
Meanwhile, homeowners like Kimaid in West Seneca have felt powerless as a lone deteriorating property tarnishes their neighborhood.
After asking Citibank to act, the only correspondence she received from the bank was a credit card application.
“Unless you’re living next door to this, what do you care?” she asked.