By Teke WigginWhat would you do if the vacant foreclosure next door was falling into disrepair and threatening your own home's value? If you're like Homosassa, Fla., resident Lisa Cocuzza, you'd try to buy it and fix it up. That was Cocuzza's plan five years ago when a for-sale sign went up at a vacant foreclosure across the street. Worried that the property would continue to deteriorate and soon blight her neighborhood, she offered to pay its full asking price of $69,000. But three days before the deal was to close, she said, it fell through because of problem involving the lenders who owned the home. This seems to be a typical story line for homeowners across the country -- many of whom are growing so desperate to preserve their neighborhoods that they're willing to buy the foreclosure next door -- only to fail. The foreclosures then tend to continue to sit empty and chip away at the surrounding homes' values. An estimated 1.5 million homes in the U.S. are bank-owned or in some stage of foreclosure, according to online foreclosure marketplace RealtyTrac. But the complications of buying one can make them difficult, even impossible, for an average homebuyer to purchase.
Other homeowners who have tried to buy foreclosures in their neighborhoods have faced other costly surprises. A homebuyer in Taylorsville, Utah, lost the chance to buy a dilapidated foreclosure in his neighborhood because the bank wouldn't negotiate on needed repairs, said Darnell DeBrule, an employee at Deseret First Credit Union of Salt Lake City. The buyer was DeBrule's client.
Mark Hankins, of Land O' Lakes, Fla., wanted to create a neighborhood trust to buy a nearby home that's languished in foreclosure purgatory for two years, but public records on it proved a dead end, he said. Six financial institutions have been involved in foreclosure proceedings on the property since JPMorgan Chase initiated foreclosure on it in 2009, the records show, and the law firm that manages the trust in possession of the home no longer exists. "If somebody diligent wanted to make an offer to the current beneficial owner," Hankins said, "nobody has any idea how to contact them to make the offer." And you'd think that if anybody could find the owner, Hankins could. He's a foreclosure attorney who wrote a book about how to cope with debt. In the success story of Lori Hiscock, though, it's easy to see why some homeowners like Hankins would like to take foreclosures under their wings. Hiscock bought a foreclosure around the corner from her home in Granger, Ind. Tenant Installs Surveillance, Now Faces Eviction Vacant Homes Plague Neighbors as Lenders Drag Feet 20 Regions Overrun by Foreclosures