'Zombie' Homes Horrify Neighbors Trapped Next Door

These wrecks languishing in foreclosure limbo plague many states.

— -- Orlando-area resident Mark Revord said he is living a nightmare, trapped next door to a so-called “zombie" home.

“Zombie" homes are dilapidated wrecks languishing in foreclosure limbo, abandoned by owners and often ignored for years by the banks that bring foreclosure proceedings against them, so they end up dying a slow, painful death and dragging down neighboring property values with them.

Revord’s neighbor’s house and yard are in shambles after being neglected for years, he said. The house was plagued by snakes, black widows and other poisonous spiders, and had an overgrown lawn, Revord added, before he took it upon himself to try to clean up the property.

Revord, 57, said his home was once valued at $250,000, but that the plummeted down to $68,000 during the housing crisis. He and his wife are now trying to re-finance, but they are worried about the zombie home next door.

“The minute an appraiser wants to come out, that is going to be problem,” he said, gesturing to the rundown home.

Once owners vacate a home, the bank that takes ownership, in many states, including Florida, is not obligated to maintain the property until the foreclosure process is complete, which can take years.

"If you just have one zombie property in a neighborhood, and there’s say, 10 properties for sale within a mile of that home, or within half a mile of that home, it’s going to affect those homes," said RealtyTrac spokesman Daren Blomquist.

Debbie Payne, a real estate agent based in the Orlando suburb of Clermont, Florida, said she thought she had seen every type of home on the market until she went inside a few zombie homes in her area. One home had chickens inside. Another appeared to have become a squatters' hangout. All the windows were smashed out and copper had been taken from the air conditioners.

Revord said he tried to track down the bank that owned the dilapidated home next door.

“I actually tried to find out who the bank was that owned the house and it took probably nine months before I got an answer,” he said. “One answering machine to another, I never got someone.”

“There are banks that are allowing properties to deteriorate and, if it is for insurance or any other reason, it is unacceptable,” Schneiderman said. “[The bill] is going to give the banks every incentive to complete a foreclosure quickly because they are going to have to maintain the property.”

But the banks are pushing back. The New York Bankers Association told “Nightline” in a statement, “Lenders favor a different approach to the one the attorney general has promoted. His approach focuses on maintenance rather than the core problem, which is the length of time it takes to complete the foreclosure.”

Any changes in New York won’t help Revord, unless the state of Florida adopts similar legislation. For now, he, and hundreds of thousands of other Americans, are stuck.

“Something is not right,” he said. “I would like a few answers and I think a lot of people in this country are in the same boat as I am.”