Where 'Zombie' Foreclosures Still Lurk

A "zombie" foreclosure is a property in which the homeowner walks away from the property without paying the mortgage and the property eventually gets foreclosed. I haven't seen one of these here in the Silicon Valley in quite some time, but I thought this article interesting enough posts for your reading enjoyment.



The share of "zombie" foreclosures are falling, but these owner-abandoned properties still lurk and are contributing to neighborhood blight in pockets across the country.

About 24 percent of all active foreclosures – or 127,021 – nationwide have been vacated by home owners prior to the foreclosure being completed. These so-called zombie properties will likely wind up as short sales, foreclosure auction sales, or bank-owned sales in the future, according to RealtyTrac's second quarter Zombie Foreclosure Report.

Still, zombie foreclosures fell 10 percent nationwide in the second quarter compared to a year ago.

"A growing number of states and cities have enacted public policy measures to combat the problem of zombie foreclosures, and we are seeing the results of those efforts in the overall decrease nationwide as well as in several hard-hit markets such as Chicago, Miami and Cleveland," says Daren Blomquist, vice president at RealtyTrac. However, "as banks push through long-deferred foreclosures that are more likely to be owner-vacated this year, we are seeing a somewhat surprising increase in zombie foreclosures in markets with overall low foreclosure rates such as Los Angeles, Houston and Boston."

The average estimated market value of an owner-vacated foreclosure is 22 percent below the average estimated market value of an owner-occupied foreclosure. "These zombies are contributing to blight in neighborhoods across the country," Blomquist says.

The highest rates of zombie foreclosures among 183 metros analyzed were in:

1.) Atlantic City, N.J.: one in 130 housing units
2.) Trenton, N.J.: one in 166 housing units
3.) Tampa, Fla.: one in 218 housing units
4.) Binghamton, N.Y.: one in every 260 housing units
5.) Ocala, Fla.: one in every 262 housing units

Some markets have seen large increases of zombie foreclosures in the past year, according to RealtyTrac's report. Notably, the following markets have seen the largest spikes in zombie foreclosures from a year ago: New York (up 38 percent), Los Angeles (up 39 percent), Houston (38 percent), Philadelphia (up 19 percent), and Boston (up 14 percent).


Source: RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/06/11/where-zombie-foreclosures-still-lurk?om_rid=AAFmZk&om_mid=_BVeejGB9CnYC8V&om_ntype=RMODaily