Business Week has an interesting story in its most recent issue on the efforts of local governments to deal with the glut of abandoned houses being driven, at least in part, by the recent trouble in the mortgage markets.
The problem arises when borrowers either become unwilling or unable to continue mortgage payments. The banks often threaten foreclosure, and at this point, the borrower abandons the house. In many cases, the bank abandons the property as well because it can't be sold for enough to make the process worthwhile.
A number of local governments (Buffalo features prominently in the article), are trying to force lenders to spend money to maintain these properties. A New York state law's definition of an "owner" of a property includes those who exert "control" over a premises. Buffalo thinks lenders exert control when they threaten to evict homeowners.
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