If no one owns the home, who's watching the house?

When a resident on Pillsbury Avenue in Bloomington discovered someone from the house next door trying to plug an extension cord into the resident's back yard electric outlet, it was clear something was wrong.

After the recent incident, city officials found the home had no electricity or heat. Windows were broken. There was garbage and clothing strewn around the property. And the people inside appeared to be squatters.

Contractors hired by the city changed the locks, picked up the garbage and fixed the windows. When the city looked for the home's owner, it found the property had been foreclosed on.

The house was in the bureaucratic black hole called "redemption." The homeowner had walked away from the property, and the bank that owned the mortgage said it couldn't do anything until the redemption period was over.

Redemption -- in Minnesota, usually a six-month period following a sheriff's sale during which the people who owned the house can buy it back -- poses a problem for cities. If a home winds up vacant or vandalized during that time, the homeowner and bank often deny responsibility, putting the burden of fixing it on the city.

"It's essential for the city to [maintain a house], because in the period of exchanging ownership we have to," said Larry Lee, Bloomington's community development director. "We hire the contractor and bill the responsible owner." Then, he said, "If they do not pay, we get the money back as special assessments on property taxes."

In Bloomington, incidents like the one on Pillsbury Avenue happen maybe twice a year, said Lynn Moore, the city's manager of environmental health. In the past year, 253 properties went into foreclosure in the city. Some cities see a lot more cases.

But in Richfield, where 146 properties were foreclosed during the 11 months ending the first week of October, there haven't been recent incidents like the one on Pillsbury, said John Stark, community development director.

Heading off crime

Securing an empty house can cost thousands of dollars. In the case of the house on Pillsbury, it was only about $200, Moore said.

Getting that property back to looking like other houses on the block was a priority because of the effect on the neighborhood, she said.

"We always want to deal with immediate things like securing windows and changing locks to prevent the home from becoming attractive to crime," Moore said. "If you have stuff like couches laying outside, it encourages people to dump things in the yard."

Richfield police who spot suspicious activity can check to see if a house has been foreclosed on using squad car computers.

The Pillsbury house was on Bloomington's watch list. "But sometimes a few key things happen," Moore said. "After one utility gets shut off, things kind of spiral downhill."

Banks can appoint local representatives to keep an eye on foreclosed properties, but Moore said, "If we're dealing with a large out-of-state bank that's dealing with thousands of homes, we have a hard time getting their attention."

Fining the violators

In Minneapolis, where thousands of homes have been moving through foreclosure over the past four years, the city has tried to minimize the threat to its housing stock by adding an array of stiff fees for violations.

Faraway banks "are draining city resources under the guise of being in the redemption period," Deegan said. "I tell them, 'You can get your [local representative] to manage these houses to minimize future damages.' That's the game they play. ...

"The whole thing is to incentivize that bank to do something."

Deegan hopes that the financial cost of letting a Minneapolis home linger in redemption will prompt more banks to use a new state law that allows them to petition courts for a five-week redemption period to speed along repossession of a house.