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Owner Fannie Mae says property approved for demolition but no permit sought yet

PORTLAND TRIBUNE: LYNDSEY HEWITT - Fannie Mae, which now owns this 'zombie' home in Lents, is now promising to tear it. But the city is pursuing a demolition order anyway, to make sure.The owner of a well-publicized "zombie" house in Lents says it has agreed to demolish the abandoned and neglected house, although any work on its part is still at least several weeks away.

In response to questions from the Portland Tribune, Pete Bakel, a spokesman for the Federal National Mortgage Association, said last Thursday that his organization has "approved" demolishing the house at 5017 S.E. 88th Ave. That was one day after the Bureau of Development Services asked a city hearings officer to approve an order requiring the house to be torn down.

"We have been diligently working on the demolition of the property," said Bakel, whose organization is commonly called Fannie Mae.

But Josiah Broomfield, a BDS senior housing inspector, says no demolition permit has yet been sought from his agency. Instead, Fannie Mae has only requested that an insurance inspector be allowed access to the property on Aug. 17 — days after the hearing officer is expected to rule on the city's request.

The neglected home was the target of a neighborhood protest on Sunday, July 23. Nearby residents complained that it has long been frequented by transients, drug dealers, addicts, pimps and prostitutes. It was heavily damaged by a fire in 2015 and declared unsafe by BDS, which has imposed over $11,000 in fines for code violations over the past three years.

Broomfield presented the demolition order request to City Hearings Officer Melvin Oden-Orr on Wednesday, Aug. 2. Broomfield testified the property is now owned by Fannie Mae, a government-sponsored enterprise that buys mortgages from banks and other lenders, then sells a collective interest in its home loans to investors, in what are known as mortgage-backed securities. No one from Fannie Mae showed up to testify at the hearing, although Broomfield presented documentation that employees there had been formally notified of it.

The order sought by Broomfield would require Fannie Mae to obtain a demolition permit within 15 days after it is approved and demolish the home within 45 days after that. If Fannie Mae does not comply, Broomfield would then be be authorized to seek a city contract with a private company to demolish the property, a process that could take months.

Oden-Orr has 10 business days from the hearing to approve or deny the request.

The lengthy process frustrates those living around the house, who say the city needs to act faster on such problem properties. Records provided by BDS show that an inspector first visited the property in response to a complaint on Aug. 19, 2013. At the time it was owned by Beverly Olson and occupied by someone who identified himself as her son. He explained that she had died and that he was unemployed and did not have any money.

According to the records, the situation continued to deteriorate, with Portland police frequently responding to the property because of reported thefts, drugs, prostitution and other disturbances. After the home was damaged by fire in February 2015, BDS obtained an order to board it up. But neighbors kept reporting people breaking into it.

At some point, the ownership transferred to Reverse Mortgage Solution, a company hired by Fannie Mae to maintain the property. More recently, ownership transferred to Fannie Mae itself.

The records show BDS employees repeatedly contacted all listed property owners requesting repairs in recent years with no results. Broomfield talked to at least two Fannie Mae representatives over the past two months, both of whom said they would forward his requests to someone else. A contractor told Broomfield he would seek demolition bids on June 20, but a Fannie Mae representative called the next day to say such work requires a potentially lengthy approval process.

After a series of stories on the problems caused by zombie homes was published by the Portland Tribune last year, the City Council reformed the city's foreclosure policies to increase pressure on delinquent landlords. But after BDS forwarded dozens of properties to the City Auditor's Office last year and early this year to begin the foreclosure process, the referrals have slowed in recent months. Instead of sending the council a new list of properties for foreclosure three or four times a year as originally promised, the council has not received any new ones so far this year.

Meanwhile, a property previously approved for foreclosure by the council at 4112-4118 S.E. 91st Ave. has been set for auction on Oct. 2.

The council has approved 14 other properties for foreclosure so far. In each case, the owners paid off all charges before their homes could be purchased at auction by anyone else.

Liens on dozens of other properties referred by BDS to the City Auditor's Office for submission to the council have been paid off before going that far. Many have since been fixed up or sold.

To see a previous Portland Tribune story on the issue, go to tinyurl.com/y9tgmatc.

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