With 52% of foreclosed homes in the state vacant, Oregon has the fourth highest rate of “zombie foreclosures” in the country. A “zombie foreclosure” is an unoccupied home in foreclosure, but not yet foreclosed. Half of the approximately 2300 Oregon homes in foreclosure, but not yet foreclosed, are vacant, and almost half of those have no forwarding address.
Vacant homes become eyesores through lack of maintenance, and often become home to squatters, or centers of criminal activity. When the owner cannot be contacted, it is difficult to evict trespassers, and the property cannot be cleaned up without spending public money. In the case of bank owned properties, navigating the bank’s bureaucracy to find a person to contact about the property’s condition can be impossible.
Locally, Hillsboro created a vacant property registry, leading to a drop in nuisance complaints, and Portland has a full time housing inspector devoted to the most problematic properties. Both cities put a lien on a property to recover costs associated with enforcement actions, but, with a lien not paid off until the subject property is sold, recovering costs could take years.
The Oregon Legislature is attempting to address the issue through House Bill 2662, the “Good Neighbor Bill.” If it becomes law, it would allow local governments to secure a property or mow a lawn after giving the owner 30 days’ notice. It would require lenders owning foreclosed properties to post the name and phone number of a person to contact about the property at the property. The Oregon Bankers’ Association is fighting the bill, claiming that in performing maintenance or repairs, they could be liable for trespass. The bill was approved 45-15 in the Oregon, and is waiting for a committee hearing in the Senate.