Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January -- five years after her mortgage company filed for foreclosure -- that it was still in her name.

Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes.

"I thought I had nothing else to do with that home," said Atterberry. "I was so embarrassed and humiliated by this."

Her mortgage company didn't buy the house and never took it to sheriff's sale to see if somebody else would, leaving Atterberry the legal owner, responsible for upkeep and taxes.

These so-called "bank walkaways" are another troubling development in the foreclosure crisis, particularly in cities like Cleveland with weaker housing markets, say housing advocates and government officials.

Lenders or mortgage companies decide they don't want homes they have already foreclosed on, sometimes because the value has plummeted or they believe the homes could become costly liabilities if they are socked with housing code violations.

But without that sale, the property can languish abandoned and ripe for vandalism. As liens and liabilities mount -- creating a so-called "toxic title" -- it becomes even harder to transfer the property. Neighborhoods and local governments are left to deal with the mess.

"It's a growing issue. It's all over the state. It's not just Cleveland," said State Rep. Mike Foley. "That kind of lack of respect for communities that banks have made a ton of money off of in the past is infuriating."

Properties left in 'legal limbo'

Joseph Schilling, associate director of the Metropolitan Institute at Virginia Tech and an expert on abandoned property, said the issue of bank walkaways is increasing. Lenders may decide that given low prices and their mounting inventory of foreclosed property, it makes sense to walk away.

"But as a result, it leaves the property in this type of legal limbo and it leaves the community and local government really holding the bag," Schilling said.

The problem has gotten the attention of government officials who are trying to fill a void in Ohio law and force companies that foreclose on property to act.

State Rep. Dennis Murray of Sandusky is drafting a bill he hopes to introduce in the next two months that would require lenders or mortgage service companies to take foreclosed properties to sheriff sale within a certain time -- or see their mortgage lien erased.

The lender wouldn't be required to buy the property -- only to take it to sale. More time could be given to lenders working to keep people in their homes by restructuring the mortgage.

Under Murray's plan, property that doesn't sell could go to a local land bank.

"We're saying fish or cut bait," Murray said. "You can either take it to sheriff's sale . . . or if you're going to walk away from the property, do it now so the land bank process and the reclamation can get started."

Separately, Cuyahoga County Common Pleas Judge Nancy Margaret Russo recently began ordering those granted a foreclosure decree in her courtroom to file the paperwork for a sheriff's sale in about 30 days -- or face being ordered to court for a contempt hearing.

"I think it's a big problem," Russo said. "It's creating more abandoned homes with nobody responsible for taking care of them."

It's not clear whether she has the jurisdiction to issue such orders. But Russo -- who was not aware of Murray's initiative when she began hers -- believed it was time to start a discussion.

Beachwood lawyer James Sassano, who represents mortgage servicing companies in foreclosure cases, said he doesn't believe Russo has the jurisdiction but understands that she wants to get properties into the hands of people who would be responsible for them. And while he hasn't seen Murray's draft legislation, he questions whether it would be constitutional to erase the mortgage holders' lien.

Frank S. Alexander, a professor at Emory University School of Law, said he's not aware of any state with a remedy similar to what Murray is proposing.

"I happen to like it," said Alexander, after being told about Murray's plans. "And it would require lenders to act more cautiously in foreclosing."

And he noted that many states are looking to tighten their foreclosure laws.

"I think Ohio because of the magnitude of the problem -- particularly in Cuyahoga County -- and the longevity of the problem, is out in front on trying to come up with creative solutions."

Practice draws academic interest

How often these walkaways happen isn't clear, and there are mortgage companies that work to hasten sales.

But researchers at the Center on Urban Poverty and Community Development at Case Western Reserve University are studying the issue after noticing that foreclosure filings in Cuyahoga County remained about the same in 2007 and 2008 but that sheriff's sales were down last year.

Researcher Michael Schramm said they also began hearing from people in various cities and neighborhoods about homes languishing in foreclosure without being sold.

Schramm said that Cuyahoga County saw more than 14,000 foreclosure filings both in 2007 and in 2008. In 2007 there were nearly 10,000 sheriff's sales, but the number dropped in 2008 to about 8,000.

Lenders or mortgage service companies may decide not to seek a sheriff's sale because they're working to restructure a mortgage or the homeowner has gone into bankruptcy. But there's no doubt they've also walked away from homes when it's in their financial interest to do so.

"In the old days when values were much higher, it made a lot more sense to press the foreclosure sale," said Dave Sarver, whose Cleveland Heights-based Sarver Realty specializes in selling properties taken back by banks at sheriff's sales.

But now, he says, when a growing number of properties are worth only a few thousand dollars, it doesn't make sense for mortgage companies to take title to properties with little value and the potential for costly city code violations.

In Cuyahoga County, foreclosed homes that lenders or mortgage companies bought at sheriff's sales have recently sold for as little as 30 percent of the home's previously appraised value, according to the Center on Urban Poverty and Community Development.

In the city of Cleveland the numbers are even worse -- with lenders selling foreclosed homes for just 15 percent of their former value.

Another slice of the dismal pie: In Cleveland more than 60 percent of the foreclosed homes sold by mortgage companies went for $10,000 or less.

Some lenders also lose interest during the foreclosure process.

"The property becomes abandoned while the foreclosure is pending and it becomes stripped, vandalized, damaged or deteriorated to the point where it just doesn't make sense to spend money to have it offered at sheriff's sale," said Larry Rothenberg, a lawyer with Weltman, Weinberg & Reis, a large creditors-rights firm based in Cleveland.

But those business decisions don't sit well with those left to deal with them.

"They have a responsibility," said Cleveland City Councilman Tony Brancatelli. He said that if lenders or mortgage companies start a foreclosure, they should finish it. Or they should take off the mortgage lien so that the title can be cleaned up and the property transferred into responsible hands.

'I see shocked people every single week'

Some of the fallout that results when properties languish vacant and abandoned shows up in Cleveland Housing Judge Raymond Pianka's courtroom.

"I see shocked people every single week," Pianka said. "They thought the burden was lifted because they filed bankruptcy or because somebody somewhere told them they're no longer responsible, and then they're pulled back in facing criminal code violations."

His court also has worked with such owners on moving the property into the hands of another owner such as a nonprofit agency, the city land bank or the next door neighbor.

But trying to transfer a problem to somebody else can become a thorny and protracted process if the long-gone owner can't be found or the foreclosed house is saddled with so many financial obligations that it is too expensive to touch.

Some transfers have been helped along when lenders remove the lien or agree to what's called a short sale and accept less than what's owned on the mortgage.

Shawn Martin doesn't know what will happen to his property on Reno Avenue in Cleveland, where a foreclosure was filed on the two-family rental house in 2006.

The sheriff sale had been scheduled, and Martin figured his lender took possession after he drove by and saw the windows boarded up and a tarp on the roof. But nobody bought it -- not even his mortgage company.

"They backed out on it and just left it without even telling me," Martin said. "It just sat there and decayed without me even knowing about it."

The house has been demolished and Martin is worried about being stuck with the bill.

"This is a nightmare," he said.

Carol Zung's two-family rental property on Adams Avenue in Cleveland is still standing -- and that presents its own set of problems.

A few months ago she got a call from police that the empty house had been ransacked, a call that reached her in Savannah, Ga., where Zung moved to find work after a cascade of financial troubles.

The house had been foreclosed on and set for sheriff's sale in November 2007.

Whether it even went to sale can't be gleaned from the court docket, which Zung has been checking in the hopes that this incredibly frustrating burden will be transferred off her 69-year-old shoulders.

Now there's another wrinkle. During a recent check, Zung learned her mortgage holder had gotten the foreclosure decree vacated and the case dismissed. But the property is still in her name and she owes around $37,000 on the mortgage. Zung has been through bankruptcy and said she has no money.

"What do I do now?" she said. "There's part of my mind that's given up. Let other people figure out this mess."

It is not just the homeowners who are affected when the property languishes.

Neighbors can be left to suffer with vandalism and diminished property values, and taxpayers may be left with the costs of removing nuisance and blighted conditions.

"Those are the people who are picking up the tab for the business practices of calculated abandonment, " said Kermit Lind, a clinical professor at Cleveland State University's Cleveland-Marshall College of Law and an expert on foreclosures.

Sarah Butler knows the fear of living next door to a foreclosed and vacant house. From her home on Reno she watched as vandals and trespassers descended on Martin's two-family after the renters moved out.

She saw looters strip the house of everything from gutters to the refrigerator. Once, one of her back windows was broken. And sometimes people would pull into the driveway at 3 a.m. and wake her up with all their noise.

"You've got to leave, nobody lives here," she'd shout from her window.

Homeowners, too, sometimes walk away -- for their own financial reasons or because they feel eviction from their foreclosed homes is inevitable. Once they're gone they may be hard to track down.

But others, like Renetta Atterberry, abandon a house in the belief that it's no longer theirs. She doesn't know why she didn't get notices about what happened.

It's not clear how her housing nightmare will end.

She said she's on a payment plan with the county treasurer's office for the back taxes and would like to donate the property to a land bank -- but said she was told that can't happen as long as the $48,000 mortgage lien remains on the now-vacant property.

"I was totally devastated with all of this being dumped on me," she said.