BOA, Urban Lending Sued for Rackateering on Fraudulent “Modification” Program

In a case that may have far-reaching consequences, a lawsuit was filed in federal court in Colorado accusing Bank of America of racketeering, which is what borrowers have been screaming about for years. It was a game to the bank. They intentionally lured people into what they thought was a good faith modification program, encouraged people to get deeper and deeper into “debt”, and then foreclosed when they were sure that the person could not reinstate nor exercise a right of redemption. A key player in this scheme was Urban Lending Solutions.

In a case that I am currently litigating, Bank of America at first denied any knowledge of Urban Lending Solutions. When confronted with correspondence issued from urban lending solutions under the letterhead of Bank of America, they finally conceded that they knew who who the company was.  In a Massachusetts case depositions were taken and it is quite clear that this affiliate of Bank of America had their employees working off of Scripts and that anyone who went off the reservation would be disciplined or fired. Going off the reservation merely meant that they actually tried to help a borrower achieve a modification.

There are at least six whistleblowers who have executed sworn affidavits stating that the modification program was a sham. I think we might be getting closer to the point where whistleblowers tell us that the origination of the loan was a sham and that the so-called sales of loans were also sham transactions. Those employees of Bank of America or their affiliates who were successful in throwing homeowners into foreclosure were rewarded with $500 gift certificates to Target and other stores.

The claims against Bank of America are using laws that were designed to target organized crime. For seven years experts and laymen have been claiming that the banks were engaged in organized crime in the  the sale of mortgage mines, origination of loans, the assignment of loans, the recording of unperfected mortgage liens, wrongful foreclosures, illegal foreclosure sales in which the property was sold without any cash being paid, interference  in the right of the borrower to reinstate, modify, or redeem.

We are just around the corner from the key question, to wit: why would the banks engage in organized crime to create foreclosures when it is painfully obvious to homeowners and local government officials across the country that the banks have no interest in acquiring the property but only causing the sale of the property at a foreclosure auction?  Why would the banks delay the prosecution of their cases for years? Why would the banks argue against expediting discovery against them and against the borrower? Why would the banks argue for less money in foreclosure rather than more money in modification?

The answer to all of those questions is simply that there is more money in this scheme than has been divulged.  In the coming weeks and months the revelations about the true nature of these transactions will shock the conscience of the country and cause voters and politicians to rethink their position regarding the ability of regulators and courts to clawback illegally obtained proceeds that started with the transactions originated with the money of investors and somehow ended up with the banks growing by 30% despite a failing economy and a diving housing market.

We are now at the point where filing RICO charges against the banks is likely to gain traction whereas in prior years it was considered overkill for what appeared to be negligence in paperwork caused by the volume of mortgages and foreclosures. Volume had nothing to do with it. The banks made a ton of money selling those mortgage bonds.  Out the money they made selling the mortgage bonds was dwarfed by the amount they made when they received insurance, credit default swap proceeds, and taxpayer money on investments owned by the investors and not by the banks. So far more than 5 million foreclosures have proceeded illegally which means that 5 million families have been disrupted in some cases beyond repair. Recent estimates suggest that another 5 million foreclosures will be added to the list unless the banks are required to conform with their regulations and the laws of the federal and state government.

BOA and Urban Lending Sued on Racketeering Charges

Kickbacks at Fannie, Freddie Explain a Lot

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

EDITOR’S COMMENT AND ANALYSIS:  The criminality of the Wall Street banks for the last 15 years has been so widespread and pervasive that it is difficult to imagine a scenario under which such behavior could have gone undetected.  The questions are unending. One particular answer to those questions stands out far above all the other possible answers, to wit: the actions of Wall Street did not go undetected.

The banks and Wall Street in general practically invented the process of due diligence, which is an examination of a proposed deal to determine whether the representations of each side are true, exaggerated or just plain false.

The government-sponsored entities of Fannie and Freddie clearly had the resources to perform extensive due diligence before they put their stamp of approval and guarantee on loans and investments that were clearly not originated or issued in accordance with government guidelines or industry standards.

The same thing may be said for the rating agencies that “got it wrong” or the insurers who presumably evaluated the risk that they were undertaking, and of course the counterparties to the hedge products including but not limited to credit default swaps.

The Wall Street Journal published a number of articles about the close relationship and economic pressure existing between the banks that were underwriting the bogus mortgage bonds and the rating agencies, insurance companies, and counterparties to credit default swaps.  these articles in the Wall Street Journal and other periodicals in mainstream media started back in 2007.

Similar articles appeared in the blogosphere  before that time warning of the coming catastrophe. Anyone with a background similar to mine on Wall Street could easily see that the underwriting of loans to consumers (especially mortgage loans) did not and could not conform to any known standards for risk assessment.

Why would a bank loan money in the knowledge (and indeed the hope) that the money would never be repaid? Why did government-sponsored entities, insurance companies, rating agencies, securities regulators, and counterparties to exotic hedge instruments turn their heads the other way, with full knowledge of the impending disaster? The answer is as old and simple as the history of commerce —  kickbacks, payoffs, bribes and promises of lucrative employment.

The Wall Street Journal told the stories where individuals working for rating agencies and insurance companies were taken on fishing trips and other junkets following which they received threats from the Wall Street banks that if the rating and insurance contracts were not to the liking of the Wall Street banks, the banks would go elsewhere.

Considering the creation of such entities as mortgage electronic registration systems (MERS)  and the financial strength of the banks, it was easy to see that if the banks didn’t get what they want from existing rating agencies and insurance companies they would create their own. Thus in addition to direct payoffs to individuals the management of old established institutions was put under pressure to play ball with Wall Street or go out of business.

The same playbook was used with appraisers who were promised higher fees if they continue to raise the stated value of the real property as they were instructed to do. In 2005 8000 appraisers warned Congress that this would happen. They were ignored. All the information that was needed for due diligence was easily accessible to the institutions that ignored red flags and eventually became part of the largest case of criminal fraud in human history.

If you look at the history of organized crime in this country you will see substantial similarities between the crime syndicates and the behavior of Wall Street. Payoffs and kickbacks to law enforcement, agencies, government officials, and legislators in the governing body of states and Congress became the ultimate protection and immunity from prosecution regardless of the severity of the crime or the damage caused to society.

While it is true that most such syndicates and eventually fail we cannot wait for time to run its course. That is why the demonstrations by occupy Wall Street and others are so important to bring pressure on those who are protecting multinational banks and the people who run them. It is not going to be easy because the amount of money is staggering. Trillions of dollars have been siphoned out of our own economy and the economy of dozens of other countries. With that kind of money you can pay off a lot of people with more money than they ever dreamed of having.

So it should come as no surprise that a “foreclosure specialist” at Fannie Mae was caught picking up $11,200 in cash in a sting operation. The problem here is that we are catching the smallest fish in the pond instead of removing those who control the action. It is interesting that the case reported below involved steering foreclosure listings to particular brokers. By focusing attention on activities far from the core of evil emanating from Wall Street many of us are distracted from looking at the real cause and the real problem not only still exists, but is being renewed as we speak in new schemes not very different from the old schemes.

The arrogance of Wall Street is either well-founded or stupid. At the present time it appears to be well founded. It remains to be seen whether we the people force our representatives, regulators and law enforcement to reject the carrot and stick from Wall Street and return to a nation of laws.

Kickbacks as ‘a natural part of business’ at Fannie Mae alleged
http://www.latimes.com/business/la-fi-fannie-mae-kickbacks-20130525,0,6280041.story

BIG PENALTIES BUT NO RELIEF FOR HOMEOWNERS

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

Organized crime is now mainstream and the godfathers are sitting in executive offices atop high billion dollar buildings giving out instructions to their paid servants to serve no other purpose than to give the appearance of a government that is governing. WHAT ARE YOU GOING TO DO ABOUT IT? Will you sit in your home or store afraid of the next visit from the bag man? Or will you take action and stop him any way we can? — Neil Garfield

3 Banks Warn of Big Penalties in Mortgage Inquiries

ACKNOWLEDGE FORCED PRINCIPAL REDUCTIONS LIKELY

A quick perusal through LEXUS/NEXUS, the principal search engine in legal research will reveal that individual cases of such blatant fraud and damages to a consumer results in jail, revocation of charter, discipline, damages, fines and other sanctions. I can’t help thinking of the quote (I think it is from Stalin) that if you kill one man it is murder, but if you kill ten million you are a statesman.

There was a time when people like Bernie Ebbers of Worldcom and  Enron officers were given long prison sentences. Even in the Madoff case a receiver was appointed to get as much money back as possible and distribute it to legitimate victims with claims stemming from losses proximately resulting from outright fraud. But in the case of the theft of some 14 trillion dollars from homeowners, state and local governments, the defrauding of the U.S. taxpayer of another 9 trillion dollars, and the financial terrorist attack on the U.S. and world economy, lighting fires around the world of chaos, death and destruction, what do we have? NOTHING.

The fact that the U.S. government has a huge deficit directly stemming from non-existent losses claimed by the banks, state and local governments are drowning in debt, investors around the world lost significant amounts of their portfolio thus reducing the capacity to operate their pension funds, government or business, and that homeowners who had homes with no mortgages or with small loans that could easily be paid and now find themselves buried under a mountain of fictitious debt SHOULD result in obvious actions and results in court, legislatures and the executive branch for law enforcement.

The inescapable fact that our recession was caused by this fraud doesn’t seem to matter either. What matters is not the victims of the fraud but the health of the perpetrators. Gulliver would have no trouble describing this, but our media seems not to have read of his travels and seems not to get or be willing to express the outrageous position we are sustaining by our inaction. We have a government within a government. The real government is the circle of mega banks and big business that call the shots and the fake government is the one we think we elected.

Any single act isolated from the millions of similar transactions would land the perpetrator in jail and return of the money and property to the victims. But somehow the sheer size of this PONZI scheme that is  hundreds of times larger than the Madoff scheme, puts it in a class by itself. There is only one explanation for the lack of prosecution of these banks and their officials — the people in charge are the perpetrators not the enforcers. We live in an era that mimics the days of the mob when organized crime was principally whiskey, drugs, sex and murder.

Organized crime is now mainstream and the godfathers are sitting in executive offices atop high billion dollar buildings giving out instructions to their paid servants to serve no other purpose than to give the appearance of a government that is governing. WHAT ARE YOU GOING TO DO ABOUT IT? Will you sit in your home or store afraid of the next visit from the bag man? Or will you take action and stop him any way we can?

By NELSON D. SCHWARTZ and ERIC DASH
Joe Raedle/Getty Images NY TIMES

Several big banks warned investors on Friday that they could face sizable financial penalties as a result of state and federal investigations into abusive mortgage practices.

The disclosures by Bank of America, Wells Fargo and Citigroup came after a furor late last year over how foreclosures were being conducted.

Until now, the banks have emphasized that the foreclosure controversy was mostly a threat to their reputation, rather than a financial worry. But the disclosures, made in the banks’ annual financial filings with the Securities and Exchange Commission, suggest that a settlement with the government may affect both.

State attorneys general and federal regulators began examining the servicers’ practices last fall after reports that some foreclosures were being pursued despite lost or missing documents. In other cases, employees had signed off on thousands of pages of paperwork a month, after only a cursory look.

In some cases, banks mistakenly pursued homeowners who should not have been threatened with foreclosure, while other mortgage holders reported it to be nearly impossible to reach anyone at the banks to discuss their situation.

The review also includes more basic practices, including scrutiny of whether the original loans were made properly and whether modifications of existing home loans have been done fairly.

“The current environment of heightened regulatory scrutiny has the potential to subject the corporation to inquiries or investigations that could significantly adversely affect its reputation,” Bank of America said in the filing.

The state and federal inquiries “could result in material fines, penalties, equitable remedies (including requiring default servicing or other process changes), or other enforcement actions, and result in significant legal costs,” Bank of America said.

Wells Fargo said in its filing that it was “likely that one or more of the government agencies will initiate some type of enforcement action,” including possible “civil money penalties.”

Citigroup acknowledged that federal and state regulators were investigating its foreclosure processes, which could result in increased expenses, fines and other legal remedies like a program to reduce the principal amount owed on some loans. While Citigroup has determined that “the integrity of its current foreclosure process is sound and there are no systemic issues,” it warned that it could be adversely affected by industrywide regulatory or judicial action.

Since last fall, a task force of federal bank regulators has been reviewing the foreclosure practices and internal controls of the 14 largest mortgage servicers. The examination has already identified a range of sloppy practices at all the servicers, including inadequate staffing, lax oversight of outside law firms and other vendors hired to assist with the foreclosure process, and errors with documentation.

In testimony before a Senate banking committee last week, John Walsh, the acting comptroller of the currency, which oversees national banks, said his agency and other federal regulators had ordered the servicers to take corrective actions.

The banks have not yet received any formal proposals from either the attorneys general or the regulators. But a proposed settlement is expected to be ironed out in the coming weeks and then presented to the banks.

The banks are eager to put the foreclosure controversy behind them. Earlier this month, Bank of America’s chief executive, Brian T. Moynihan, said the bank was creating a special unit to hold billions of dollars in defaulted mortgages and other toxic debt.

Despite reports in recent days that a global settlement of the mortgage accusations was being floated by the Obama administration, for $20 billion or more, some bank officials and regulators expressed skepticism Friday that the eventual hit to the banks will be that high.

Indeed, many regulators in Washington are wary of too punitive a settlement for fear of hobbling their recovery just as they are turning around. Memories of the financial crisis in the fall of 2008 and the subsequent federal bailout are still vivid.

Still, even if any settlement with regulators and the attorneys general does not run into the tens of billions, the financial consequences of the housing boom and subsequent bust will haunt the banks for years. Private investors are seeking to force financial institutions to buy back tens of billions of dollars’ worth of mortgages in default, arguing the original loans were made improperly.

Over the last year, the biggest banks have set aside several billion dollars each to cover potential claims stemming both from the foreclosure mess and lawsuits by private investors holding soured mortgages.

On Friday, Elijah E. Cummings, a Maryland Democrat who is a member of the House Committee on Oversight and Government Reform, requested information from 11 mortgage servicers and foreclosure specialists as part of a separate Congressional investigation. He also requested special reviews of servicer abuse claims, as well as the actions of law firms specializing in foreclosures. A hearing is scheduled for March 8 in Baltimore.

Ben Protess contributed reporting.

Mortgage Meltdown: Enough Distress to go Around

It is hard to compute the total damage to everyone, but it seems pretty clear at this point that EVERYONE is effected. Every government agency involved with real estate taxes, and government service funded by real estate taxes, every homeowner who sees his home equity decline, every neighborhood that turns into a “deferred maintenance” junkyard with organized crime and vandals destroying unoccupied homes, every borrower who got roped into refinancing when he/she had not need or intention to refinance, every buyer of a home from a developer who got nailed by their reliance on the appraised value of the home, every investor who bought an ABS, every pension holder or shareholder in an entity that invested in ABS instruments as “cash equivalent” etc.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Abandoned homes distressing
Untended eyesores hurt local values

The view from Tina Osborne’s backyard isn’t pretty.

From her deck in Florence, she overlooks several feet of grass and weeds – a serious eyesore in the cul-de-sac of her Carters Mill subdivision where neighbors have a tradition of putting down mulch and working together in their yards each summer.

A few weeks ago, the front yard of that same abandoned home didn’t look much better – until a neighbor took it upon himself to cut the grass. He fears the untidy conditions will turn away potential buyers from his home, which is up for sale.

• Search foreclosure listings, repossessed properties, and other real estate in distress.
• Survey: Tell us how the economy is affecting you
• See our special section on foreclosures

Similar scenes are playing out all across Greater Cincinnati and Northern Kentucky as the surge of home foreclosures has led to a surge in complaints about vacant, unkempt properties.

In the last month alone, Colerain Township trustees were asked to declare 115 properties as nuisances. Liberty Township had nearly 60 complaints in May. Neighboring West Chester identified 19 problem homes late last month, and the township’s community development director says he expects more to be added to the list in June.

Delhi Township officials plan a special meeting to discuss the issue.

Not every nuisance complaint is linked to a foreclosed house, but officials say that’s the driving force behind the increase in complaints.

“Ohio is one of the leading states in foreclosure. When people leave their homes, they usually leave their responsibilities behind. That’s where we come in,” said Ronnie Caldwell, code enforcement officer in Deerfield Township, where about 30 complaints have been filed this year.

“This is a problem everywhere; we’re no different,” Caldwell says.

Compounding the problem: Heavy rainfall through May has led to an explosion of grass and weeds, making vacant homes especially noticeable.

For the first six months of the year, many communities say they are seeing twice as many high-grass complaints as they did during the same period last year. In some areas, nuisance complaints have already surpassed all of 2007.

But according to an Enquirer request for e-mails about the foreclosure fallout, the concerns go beyond unmowed grass. People are complaining about landscaping disasters, mosquito-infested swimming pools, collapsed ceilings, burst pipes, and foul odors.

The unkempt properties are frustrating on several levels.

Some say their own yard work goes for naught because people get distracted by the unsightly house next-door.

Some are frustrated by the slow responses – if they get any at all – when making complaints.

Some people get so irritated they end up doing the yard maintenance themselves.

EYESORES ABOUND

Jane Young moved into her Hickory Woods subdivision almost a decade ago. Over the years, the Mason resident has watched as homes were built around hers.

Recently, she noticed an overgrown yard and a utility notice on the front door of an empty home across the street, a home that had been valued at just under $300,000.

“This is not a dandelion neighborhood. We don’t do dandelions,” Young said. “Right now, this house sticks out – a lot.”

In Lebanon, neighbors complain about a house that has been vacant for months in a neighborhood where homes had been selling for $250,000 and up.

Cold weather caused the pipes to burst this winter. Water spilled all over, leading to black mold staining the walls, fungus growing on soggy carpet, and a buckled floor pushing the back door open – exposing the house to rodents.

The stench is so bad that neighbors noticed a bank representative wearing a mask to go inside and evaluate the property. The recent 90-degree heat has made the smell worse, says neighbor Ann Stengl.

“What used to be a great house is awful for the neighborhood. … I think it’s getting worse by the day,” she said.

In an already soft real-estate market, people find it becomes even more difficult to sell a house that is near a vacant property.

Rose and Jeff MacInnis did everything they thought had to be done to sell their Burlington home. They painted, replaced the carpet, planted flowers and kept their yard carefully mowed and edged.

Yet, nearly one year later, they’re paying two mortgages and maintaining two yards – their old home in the Pebble Creek subdivision and their new place in Cincinnati’s Bridge Point.

“The comments are always the same: ‘The house is nice, but we don’t like other people’s yards.’ We get the negative feedback even though our house is in perfect condition,” said a frustrated Rose Mac- Innis.

In Madisonville, Heather Poe has had her house on the market for 18 months. Part of the problem, she says, is the abandoned house next door.

The lender who holds the lien for the house has started to cut the grass occasionally, she said. But that does nothing for the pool falling apart in the backyard or the stair railing that was ripped from concrete and now leans against the side of the house.

“Even if they like your house, that place is the deal killer almost every time,” she said.

WHO CUTS THE GRASS?

The process to declare a property a public nuisance varies from community to community. Complaints get official attention once the grass reaches certain heights, or if the conditions can be deemed a public health risk.

Then the process begins.

First, the property owner receives notice, usually a letter, from the local government. If the government knows who is responsible for the property, a letter is enough to get maintenance work started in most cases.

But if property owners don’t act within the allotted time, typically a couple of weeks, the grass is cut by public crews or private contractors hired for the job.

Owners will either get a bill in the mail, or the county auditor places a lien on the property. Charges could range from rental costs for mowing equipment to worker compensation and administrative fees. Total price is anywhere from $200 to $400.

Most communities set a high rate on purpose. “We don’t want to become a lawn mowing service,” said Brian Elliff, director of community development in West Chester Township.

WHERE TO CALL OFTEN UNCLEAR

All of this assumes that neighbors know where to call – which varies from place to place.

People who contacted The Enquirer said they often did not know whom to call. They’ve been bounced from homeowners associations to local governments, health departments, sheriffs’ offices and banks.

“It’s just kind of annoying. We have no idea who’s supposed to do it,” Tina Osborne said of the problem in her Florence neighborhood. “If we want to stop looking at it, we have to get out there and do it ourselves. … But then we’re told we’re not supposed to do that. And we’re right back at square one.”

Meanwhile, the increased number of complaints either strains public budgets, bogs down response time, or both.

In Covington, officials added $7,000 to the maintenance budget this year to handle this kind of work; the same will be done next year. In Boone County, a two-person code enforcement team has been overwhelmed with 144 nuisance complaints since April, said Brad Horn, code enforcement supervisor.

“We’re way behind right now,” Horn said. “We’re barely keeping our head above water.”

In Ohio, some of the delays related to property upkeep may improve in the months to come.

Ohio Gov. Ted Strickland signed a bill last week that requires sheriffs to record deeds within 14 days of a judge signing off on a foreclosed sale. The goal is reduce the legal limbo period for vacant homes as ownership is transferred.

Neighbors say they’ll be waiting to see if the grass gets cut.

Staff writers Kari Wethington, Cliff Radel, Scott Wartman, Mike Rutledge and Cindy Schroeder contributed to this story.

Abandoned homes distressing
Untended eyesores hurt local values

The view from Tina Osborne’s backyard isn’t pretty.

From her deck in Florence, she overlooks several feet of grass and weeds – a serious eyesore in the cul-de-sac of her Carters Mill subdivision where neighbors have a tradition of putting down mulch and working together in their yards each summer.

A few weeks ago, the front yard of that same abandoned home didn’t look much better – until a neighbor took it upon himself to cut the grass. He fears the untidy conditions will turn away potential buyers from his home, which is up for sale.

• Search foreclosure listings, repossessed properties, and other real estate in distress.
• Survey: Tell us how the economy is affecting you
• See our special section on foreclosures

Similar scenes are playing out all across Greater Cincinnati and Northern Kentucky as the surge of home foreclosures has led to a surge in complaints about vacant, unkempt properties.

In the last month alone, Colerain Township trustees were asked to declare 115 properties as nuisances. Liberty Township had nearly 60 complaints in May. Neighboring West Chester identified 19 problem homes late last month, and the township’s community development director says he expects more to be added to the list in June.

Delhi Township officials plan a special meeting to discuss the issue.

Not every nuisance complaint is linked to a foreclosed house, but officials say that’s the driving force behind the increase in complaints.

“Ohio is one of the leading states in foreclosure. When people leave their homes, they usually leave their responsibilities behind. That’s where we come in,” said Ronnie Caldwell, code enforcement officer in Deerfield Township, where about 30 complaints have been filed this year.

“This is a problem everywhere; we’re no different,” Caldwell says.

Compounding the problem: Heavy rainfall through May has led to an explosion of grass and weeds, making vacant homes especially noticeable.

For the first six months of the year, many communities say they are seeing twice as many high-grass complaints as they did during the same period last year. In some areas, nuisance complaints have already surpassed all of 2007.

But according to an Enquirer request for e-mails about the foreclosure fallout, the concerns go beyond unmowed grass. People are complaining about landscaping disasters, mosquito-infested swimming pools, collapsed ceilings, burst pipes, and foul odors.

The unkempt properties are frustrating on several levels.

Some say their own yard work goes for naught because people get distracted by the unsightly house next-door.

Some are frustrated by the slow responses – if they get any at all – when making complaints.

Some people get so irritated they end up doing the yard maintenance themselves.

EYESORES ABOUND

Jane Young moved into her Hickory Woods subdivision almost a decade ago. Over the years, the Mason resident has watched as homes were built around hers.

Recently, she noticed an overgrown yard and a utility notice on the front door of an empty home across the street, a home that had been valued at just under $300,000.

“This is not a dandelion neighborhood. We don’t do dandelions,” Young said. “Right now, this house sticks out – a lot.”

In Lebanon, neighbors complain about a house that has been vacant for months in a neighborhood where homes had been selling for $250,000 and up.

Cold weather caused the pipes to burst this winter. Water spilled all over, leading to black mold staining the walls, fungus growing on soggy carpet, and a buckled floor pushing the back door open – exposing the house to rodents.

The stench is so bad that neighbors noticed a bank representative wearing a mask to go inside and evaluate the property. The recent 90-degree heat has made the smell worse, says neighbor Ann Stengl.

“What used to be a great house is awful for the neighborhood. … I think it’s getting worse by the day,” she said.

In an already soft real-estate market, people find it becomes even more difficult to sell a house that is near a vacant property.

Rose and Jeff MacInnis did everything they thought had to be done to sell their Burlington home. They painted, replaced the carpet, planted flowers and kept their yard carefully mowed and edged.

Yet, nearly one year later, they’re paying two mortgages and maintaining two yards – their old home in the Pebble Creek subdivision and their new place in Cincinnati’s Bridge Point.

“The comments are always the same: ‘The house is nice, but we don’t like other people’s yards.’ We get the negative feedback even though our house is in perfect condition,” said a frustrated Rose Mac- Innis.

In Madisonville, Heather Poe has had her house on the market for 18 months. Part of the problem, she says, is the abandoned house next door.

The lender who holds the lien for the house has started to cut the grass occasionally, she said. But that does nothing for the pool falling apart in the backyard or the stair railing that was ripped from concrete and now leans against the side of the house.

“Even if they like your house, that place is the deal killer almost every time,” she said.

WHO CUTS THE GRASS?

The process to declare a property a public nuisance varies from community to community. Complaints get official attention once the grass reaches certain heights, or if the conditions can be deemed a public health risk.

Then the process begins.

First, the property owner receives notice, usually a letter, from the local government. If the government knows who is responsible for the property, a letter is enough to get maintenance work started in most cases.

But if property owners don’t act within the allotted time, typically a couple of weeks, the grass is cut by public crews or private contractors hired for the job.

Owners will either get a bill in the mail, or the county auditor places a lien on the property. Charges could range from rental costs for mowing equipment to worker compensation and administrative fees. Total price is anywhere from $200 to $400.

Most communities set a high rate on purpose. “We don’t want to become a lawn mowing service,” said Brian Elliff, director of community development in West Chester Township.

WHERE TO CALL OFTEN UNCLEAR

All of this assumes that neighbors know where to call – which varies from place to place.

People who contacted The Enquirer said they often did not know whom to call. They’ve been bounced from homeowners associations to local governments, health departments, sheriffs’ offices and banks.

“It’s just kind of annoying. We have no idea who’s supposed to do it,” Tina Osborne said of the problem in her Florence neighborhood. “If we want to stop looking at it, we have to get out there and do it ourselves. … But then we’re told we’re not supposed to do that. And we’re right back at square one.”

Meanwhile, the increased number of complaints either strains public budgets, bogs down response time, or both.

In Covington, officials added $7,000 to the maintenance budget this year to handle this kind of work; the same will be done next year. In Boone County, a two-person code enforcement team has been overwhelmed with 144 nuisance complaints since April, said Brad Horn, code enforcement supervisor.

“We’re way behind right now,” Horn said. “We’re barely keeping our head above water.”

In Ohio, some of the delays related to property upkeep may improve in the months to come.

Ohio Gov. Ted Strickland signed a bill last week that requires sheriffs to record deeds within 14 days of a judge signing off on a foreclosed sale. The goal is reduce the legal limbo period for vacant homes as ownership is transferred.

Neighbors say they’ll be waiting to see if the grass gets cut.

Staff writers Kari Wethington, Cliff Radel, Scott Wartman, Mike Rutledge and Cindy Schroeder contributed to this story.

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