Neighbors all but cheered as they gathered to watch flames twisting through the roof of a vacant duplex in the Ogden area of Vancouver last month.
"I hope it burns to the ground," one man muttered.
The duplex fell into disrepair sometime after it went into foreclosure in 2008. Frustrated neighbors complained to Vancouver code enforcement and the police, who had little luck getting action from the bank.
Shades of this scenario are playing out around Clark County. The Great Recession and accompanying housing crash generated a torrent of foreclosures. Many were never completed, leaving empty houses that wreck neighborhoods. It's not simply a matter of aesthetics: The neglected and vacant houses attract criminal activity and pose a safety hazard.
Although the number of foreclosures has fallen, many houses have been empty for years. In the first quarter of 2013, 1,132 Clark County properties were in foreclosure, according to RealtyTrac Inc. The California-based data company recently undertook its first inventory of so-called zombie titles, and counted 586 in Clark County. These are properties abandoned by homeowners after banks notified them of the intent to foreclose, but then didn't follow through.
"As it sits for months and years, the care and upkeep of a property will go down," said Kim Kapp, a spokeswoman for the Vancouver Police Department. "We have these snowballing effects."
When police checked out the vacant Ogden duplex, they found inside walls smashed. In 2009, the duplex caught fire, but the fire didn't destroy it. In 2012, graffiti covered the building and even the surrounding shrubs. It's hard to blame the neighbors for wishing the house would just go away.
"Vagrants kept breaking it open and spending time in there. They smoked weed or crack or whatever. Some of them set up temporary housekeeping," said Kathy Huss, chairwoman of the Ogden Neighborhood Association. "It draws a bad element in amongst a lot of good homes."
A 2010 report by the U.S. Government Accountability Office highlighted the problem nationwide.
"Abandoned foreclosures that remain vacant for extended periods pose significant public health, safety, and welfare issues at the local level. … (They) also contribute to neighborhood decline by providing venues for a wide variety of crimes," the report states.
This, in turn, drives up costs for local government by increasing demands on code enforcement, police and fire departments, according to the report.
Experts estimate that one blighted house can drag down values for as many as six surrounding homes.
Banks rarely respond
This is something neighbors know intuitively. They complain to officials, but even police and code-enforcement agencies have trouble reaching bank representatives with the power to take action.
"It's a difficult process," said Sree Thirunagari, Vancouver's building official. "Some cases are more difficult than others."
He said code-enforcement officers attempt repeatedly to connect with banks. Often, a representative promises someone will respond. Months go by with no word. So code-enforcement officers call again, only to be told there's no record of the earlier conversation.
Thirunagari's office worked for a year to try to get a swimming pool secured at a vacant house off Mill Plain Boulevard, but the city ended up having to handle it.
"We're still trying to recover the costs," Thirunagari said.
It's often difficult to tell exactly who is responsible for a property. In the case of the Ogden duplex, for example, county records still list the homeowners as Sondra J. Blake and Shada R. Stuckey, with a mailing address in Washougal. Huss said the mother and daughter were nice people who attended neighborhood meetings. The Columbian wrote to Blake and Stuckey seeking comment; they did not reply.
ReconTrust, a subsidiary of Bank of America, issued a notice of trustee sale for the duplex in 2008. Notices posted in the windows before the fire first listed Bank of America as holding the property, and then Select Portfolio Servicing Inc. The Columbian's calls to Bank of America and Select Portfolio Servicing were not returned.
In unincorporated Clark County, code-enforcement officers are having better luck. The percentage of cases involving property in some stage of foreclosure has declined from 25 percent three years ago to 10 percent today, said Kevin Pridemore, county code-enforcement supervisor.
He said banks are hiring contractors to maintain properties more than they were a few years ago. These companies post contact information at vacant houses.
"The banks have definitely adjusted to the economic climate," he said. "It's not a perfect situation, but it has improved quite a bit over the past three years."
Not all properties in foreclosure have a maintenance company assigned, however. If they don't, reaching the bank to request corrective action is difficult, he said.
"It's pretty much hit-or-miss," Pridemore said.
Accord battles blight
The National Mortgage Settlement may be partly responsible for the improvement Pridemore has noticed.
The 2012 historic joint state-federal settlement with the country's five largest mortgage lenders includes provisions intended to combat blight, said David Huey, senior counsel at the Washington Attorney General's Office. He helped negotiate the settlement with Bank of America, Ally Financial Inc., CitiMortgage, J.P. Morgan Chase Bank and Wells Fargo & Co.
"One of the problems with zombie debt is that the owner has abandoned it because he's underwater, and the bank doesn't foreclose because it's a headache for the bank, and the property sits there in limbo," Huey said.
The settlement created a pot of $17 billion for consumer relief. Banks can receive 50 cents on the dollar to forgive debt, or dollar-for-dollar reimbursement for demolishing or donating properties.
One watchdog group, the National Foreclosure Prevention and Neighborhood Stabilization Task Force, sees potential in the anti-blight aspects of the National Mortgage Settlement.
"Thus far, the anti-blight provisions have received far less attention than consumer relief or the overall servicing standards, yet they have great potential to help communities across the country," the task force wrote in a letter last year to the Office of Mortgage Settlement Oversight. The task force recommended requiring banks to provide more detailed reports quantifying their anti-blight efforts, and to identify and take responsibility for their holdings through a listing of bank-owned properties.
Meanwhile, even though the Ogden duplex burned down April 27, the saga is not over. The city code enforcement office still doesn't know who owns the property. After the fire, a management company fenced the property, and is obtaining permits necessary to clear rubble from the site.