Special Segment: Neighbors of Foreclosure

April 13, 2010 5:26:38 AM PDT
Homeowners worried about their property values because of next-door problems beyond their control sometimes face even greater risk.

In a quiet corner of Grayslake, there is danger. Two weeks ago, the Village of Grayslake deemed a townhouse unsafe for human occupancy. Julie Heyer and Christina Marusich live on either side of the property.

"Who wants to share a wall with a building that's been condemned?" said Heyer.

"I never thought in a million years I would have to deal with something like that," said Marusich.

On the day ABC7 visited, a village health department inspector entered the townhouse with police officers. The inspector found evidence of rodent infestation.

But the big problem began in January. A broken pipe saturated the first floor with water, causing the ceiling the garage to cave in. When ABC7 went to the house, police officers reported the water was still leaking three months after the pipe broke.

Neighbors shared photos of the interiors, with mold growing on ceilings, floors and walls -- walls shared with Heyer and Marusich.

Neighbors say they hear the rodents in the walls, especially at night.

"We want the infestation problem to be taken care of. We want the mold be taken care of," Heyer said. "It's a real mess."

Marusich and Heyer also have water damage from the initial leak. They want to repair their damage, remove any nearby mold and ultimately stop the leak. But the source of their problems is on someone else's property. A property in foreclosure.

Neighbors say the townhouse has been vacant since last summer.

"To have somebody who is negligent, not responsible for an abandoned property, to basically come and potentially ruin your home," said Marusich.

CitiMortgage filed foreclosure in November. In March, a judgment of foreclosure was issued. But the property hasn't been sold and it is not in possession of the bank.

"Until there is a judgment of foreclosure and a foreclosure sale, or they work out a situation where they refinance, or they work out a situation where they had back the property to the lender, the homeowner is responsible for the property," said Don Shapiro, Foresight Realty LLC.

Courts regularly call upon Shapiro to be receiver, an officer of the court to preserve a property until the foreclosure sale. Shapiro is not involved with the Grayslake property, but Shapiro sees foreclosures forcing neighbors to wait through often lengthy litigation to fix problems on the foreclosed property.

"Neighbors will not like what is next to them, and to some degree they will be limited in what they can do," Shapiro said.

Back in Grayslake, the village is taking the homeowner to court for five violations. Having mold is not among the violations, but it is the biggest concern for next-door neighbors.

"We're not asking it to be put back in tip-top selling shape. We want the hazards to be removed," Heyer said.

As a result of ABC7'S inquiry and evidence that the property is abandoned, CitiGroup hired a contractor to make repairs. The spokesman for Citigroup says they can't take action if someone is living in the property.

The spokesman suggests, in a foreclosure situation, concerned neighbors should try to work with the homeowner, and if that doesn't work, ask the lender for assistance.

Another avenue may be a homeowners association, depending on how the association defines responsibility and shared space. In the Grayslake case, the association's declaration says the owner is responsible to make repairs to the shared walls.

Technically, the Grayslake townhouse is still owned by the homeowner. ABC7 attempted to talk with the homeowners, but was not unsuccessful.

The foreclosure sale is scheduled for May.