MEMPHIS, TN - Shadow inventory is destroying the Memphis landscape, lowering property values and stressing out homeowners who desperately want their neighborhoods to rebound from the mortgage crisis.
But what exactly is shadow inventory? Different experts have different definitions. Some only include homes that have already been repossessed by banks and are awaiting distressed sales. Others include those whose owners are long-overdue on mortgage payments, while others still count homes whose owners would like to sell but are waiting for conditions to improve.
What is certain? Memphis is filled with shadow inventory that sits as unmaintained, rundown eyesores and neighbors are tired of it. Some are now suing the homeowners and mortgage companies because their properties have become a "public nuisance."
It's hard to track down property owners, but when they do find them, it can take years for them to clean up their mess because it takes years to finally get them in court. Residents are the ones paying the ultimate price when foreclosed homes are abandoned and vandalized.
“I've been living in southeast Memphis for 35 years," says Lynda Whalen, Director of the Burlington Area Neighborhood Association. "I've worked all of my life for my home, and I have to watch my property value go down because banks don't want to step up to the plate? I'm sorry that is wrong."
Whalen joined Memphis Mayor A C Wharton's campaign to end blight and hopes taking property owners to court will help solve some of the problems.
“People are using these abandoned houses as dump sites," says Whalen. "We have squatters in them. We're trying to take care of yards, board houses, mend fences, but the inventory just keeps growing and growing and it's just not here in Burlington it is everywhere."
People are also destroying the homes from the inside. Whalen’s team of volunteers cleaned a vacant home in February 2011, because it was becoming a huge problem in the neighborhood. It had animal feces, trash, and rotten food everywhere.
Ron Porter rents out his home in the 7300 block of Duncaster in Southeast Memphis. He takes care of his property the best he can, but it's the vacant home next door that's causing problems.
"The complaints I've been getting from my tenants," Porter tells abc24.com, "are theft, drug operations, that kind of thing."
Another vacant home in the neighborhood is in the 7200 block of Newling Lane. Wells Fargo took ownership of that home after it went into foreclosure a year ago. Whalen says there have been reports of drug use and sales going on inside the house. She says the banks ignore the problems.
"They don't want the inventory," she says. "They don't want the liability, and they know that the housing market is slow right now and they're probably not going to get anything for the house. But you know what? That isn’t fair to us. We didn't cause this problem."
abc24.com contacted Wells Fargo about its property on Newling Lane and received the folloiwng statement: "We understand the issues vacant properties create for communities, and we work hard to maintain properties we're responsible for. We have been in touch with the contractor who has been maintaining this property for us and have asked them to take care of these issues as soon as possible."
The Burlington Neighborhood includes 4,000 homes. 600 of those are foreclosed properties.