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A little-known, 27-year-old state law could help Medford ...

From the richest subdivisions of east Medford to the poorest neighborhoods west of the railroad tracks, 436 mostly bank-owned houses sit vacant, often attracting vagrants and drug users and creating a nuisance for their neighbors. 

“This thing pisses me off,” says Joshua Prince, 27, pointing to a boarded-up house on Beatty Street where he's had to shoo away vagrants. “It’s like a health-risk hazard and a fire hazard.

“If somebody goes in there one night to stay warm, it could burn that house down and my whole house down."

City officials have tried, sometimes for years, to get owners of abandoned properties to rehabilitate them. Now officials are considering adding a new weapon to their blight-fighting arsenal: a little-known, 1989 state law that allows cities to foreclose on properties that have become a threat to the health and safety of a community.

“It’s a very powerful tool,” Deputy City Attorney Kevin McConnell says. “It’s also meant to go after slumlords.”

Under the law, the city or another agency can initiate a receivership action against a problem property. Once the city gains control, it can begin to rehabilitate it, potentially qualifying for grants and other federal programs.

The threat of foreclosure could be the spur that impels banks to rehabilitate the properties themselves, McConnell says.

“I don’t think it will address the problem completely, but it will go a long way toward helping deal with it,” he says. “It’s not an overnight solution. It could take years.”

McConnell says the city likely has many more abandoned properties than are reflected in the list.

Medford started a registry of abandoned properties in 2009, requiring lenders to notify the city if a house sat vacant for more than 10 days. Fines of up to $250 a day can be levied against owners who refuse to clean up blighted property.

According to Suzi Gish, records specialist in the Medford police Code Enforcement division, there have been 1,899 cases of junk accumulation investigated in the city since 2009. The city has issued citations in 294 cases. She says the cases involve bank-owned and privately owned properties.

Gish last week reviewed the registry of vacant properties and identified 415 that are bank-owned. Code enforcement has identified 42 properties that are boarded up or considered blight, 21 of which are on the bank-owned list.

Banks and mortgage companies own the vast majority of vacant properties, with the top four being Bank of America, at 67; Nationwide Mortgage, at 30; Wells Fargo Home Mortgage, at 24; and Ocwen Loan Servicing, at 19.

Rick Simon, spokesman for Bank of America Home Loans & Servicing, says his office reviewed the list of vacant properties provided by the city and found it outdated.

“The vast majority of these loans and properties are no longer serviced by us,” he says in an email response. “Most of them have been paid off or the servicing rights have been transferred to another servicer.”

Several borrowers are now current on their loan payments, Simon says.

Only four of the defaulted or foreclosed properties on the vacant properties list are in his company’s servicing portfolio, he says.

“The bank takes its responsibility for property preservation seriously, and all four of these properties have been inspected during this month under routine property preservation practices,” Simon says. He says regular, monthly maintenance and repairs have been ordered as necessary.

Simon says he will contact the city to update it on the status of the 67 properties.

In 2011, Bank of America had 1.4 million delinquent loans on its books. At the end of 2015, that number had dropped to 103,000.

Twenty percent of the mortgages on the city's vacant properties registry are held by federal programs, including Fannie Mae, at 48, Freddie Mac, at 27, and Housing and Urban Development, at 10.

Some commercial properties that are on the boarded-up list are owned by local nonprofits, including 503 N. Fir St., owned by Southern Oregon Goodwill, which formerly housed its maintenance department and is now up for rent; 1947 Stewart Ave., owned by OnTrack, who last year proposed building a low-income housing complex there; and a warehouse at 10th and Front streets, owned by the JPR Foundation, who at one time wanted to turn it into the headquarters for Jefferson Public Radio.

McConnell says a house at 1001 N. Central Ave. has been boarded up for about 20 years.

Abandoned properties can create a problem for law enforcement and be both an eyesore and a nuisance for neighbors.

Kids Unlimited in late March bulldozed six dilapidated, crime-plagued houses to make way for a major expansion in the Beatty-Manzanita neighborhood, rousting out three vagrants the morning demolition began. Medford police had responded to 114 calls at the houses since 2012, ranging from noise complaints and ordinance violations to trespassing and a Sept. 9 drive-by shooting.

“I’m glad they’re gone,” says 65-year-old Medford resident Kathy Ledesma, who lives nearby. “They found drugs and needles in there.”

Her sister, Robersa Maya, 62, says she’s lived in the neighborhood all her life. She can now look from her backyard into an empty field where the houses were recently bulldozed.

“It seems like it’s sort of calmed down,” Maya says.

In the Chestnut Street area west of Columbus Avenue, there are about a half-dozen boarded-up houses. One was gutted by fire years ago, and another has collapsed so that only the peak of the roof remains.

“I’d like them to move that away,” says Dale Greenberg, a 79-year-old neighbor. He says there are three lots and two abandoned houses remaining on them.

On Delta Waters Road in northeast Medford, 49-year-old Jane Lee looks at two empty houses, one of which is boarded up. A third house was empty but Lee says the new owners bought it in a foreclosure sale.

“They’ve been empty a really long time,” she says. “I’m hoping somebody does something with them. It’s better than them sitting there.”

Lee says she occasionally sees people wandering around the house, but they’re usually just kids. “We’ve seen people in and out at night,” she says.

McConnell says under the 1989 law, the city could take receivership action against substandard housing that plagues certain areas of Medford. He says the program also could be used to rehabilitate houses that could become temporary residences for homeless families so they don’t have to live on the street.

McConnell says the receivership program is not designed to kick people out of their houses. In the case of substandard apartments, the city or another organization might have to find temporary housing for residents while the apartments are brought up to current standards.

The Medford City Council appears to be generally receptive to the idea of a program to deal with the large number of abandoned properties.

“I really like the idea of a housing receivership,” Mayor Gary Wheeler says.

But the council wants to wade carefully into the program, which would require a lot of legal documents and coordination.

In order to establish a robust program to rehabilitate dozens of properties, the city wants to partner with local organizations that already provide low-income housing, including Jackson County Housing Authority, Habitat for Humanity, Rogue Retreat and OnTrack.

Jackson County is in dire need of more affordable housing for low-income families. The housing authority says 5,416 residents are on a three-year waiting list to receive rental assistance vouchers.

Other cities in Oregon, including Portland and Gresham, have pursued similar foreclosure actions on problem properties. The program also has been used throughout the U.S. to help clean up blighted communities.

Housing authority Executive Director Scott Foster says his organization has discussed the 1989 receivership law over the past year and welcomed the news that the city itself was thinking of pursuing it.

“We were thinking of approaching the city to see if they were interested in this sort of thing,” he says.

Foster says the organization wouldn’t want to become property managers for single houses, but prefers to help rehabilitate them and make them available for low-income, first-time home ownership programs.

“We could supervise the fix-up,” he says. “My general thinking is that we have the experience in rehabilitating a house, and we can evaluate whether a property can be saved or not.”

Foster says receivership could be one legal avenue to force banks to take action on their abandoned properties.

“I don’t think the city should be too worried,” he says. “Nobody likes banks anymore.”

Denise James, executive director for Habitat for Humanity, says her organization can build an 1,100-square-foot home from the ground up for about $80,000.

In most cases, she says, it’s cheaper for her organization to build a house from scratch rather than remodel an existing structure.

“There’s probably a small percentage where it would make sense to remodel,” she says.

James says her organization has 1,200 volunteers who would be willing to help remodel or build more houses for low-income families. She says there is HUD funding available for these types of projects.

Rita Sullivan, executive director of OnTrack, says she loves the idea and that her organization would help back a receivership program.

“Any answer is better than leaving it abandoned,” she says. “We’re all willing to put in the work if the outcome serves families.”

Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on Twitter @reporterdm.

Searchable database of bank-owned, vacant properties in Medford

Tips for using Problem Properties database:

  • You don't have to fill in every box. Actually, searching one field at a time will help you find the property you are looking for more quickly. 
  • If you can't find a specific address, use more general terms. (For example, if you're looking for "100 Garfield Street" in the property address box and it doesn't come up, just type "Garfield.") 

Joshua Prince points out an abandoned home next to his residence on Beatty Street in Medford. Prince says such abandoned homes are a health and fire hazard. Mail Tribune / Jamie Lusch