In a system where chiral symmetry is spontaneously broken, the low energy eigenmodes of the continuum Dirac operator are extended. On the lattice, due to discretization effects, the Dirac operator can have localized eigenmodes that affect physical quantities sensitive to chiral symmetry. While the infrared eigenmodes of the Wilson Dirac operator are usually extended even on coarse lattices, the chiral overlap operator has many localized eigenmodes in the physical region, especially in mixed action simulations. Depending on their density, these modes can introduce strong lattice artifacts. The effect can be controlled by changing the parameters of the overlap operator, in particular the clover improvement term and the center of the overlap projection.