One in four foreclosures are zombie homes

by MPA06 Feb 2015
Exactly 142,462 U.S. homes actively in the foreclosure process, which had been vacated by the homeowners prior to the bank repossessing the property, representing 25% of all active foreclosures according to RealtyTrac's first quarter 2015 Zombie Foreclosure Report.
 
The total number of zombie foreclosures was down 6%  from a year ago, but the 25% share of total foreclosures represented by zombies was up from 21% a year ago.
 
Zombie foreclosures "represent an increasing share of all foreclosures because they tend to be the problem cases still stuck in the pipeline," Daren Blomquist, vice president at RealtyTrac, said.
 
Watch: RealtyTrac: Zombie foreclosures are a consistent problem

"Additionally, the states where overall foreclosure activity has been increasing over the past year ó counter to the national trend — tend to be states with a longer foreclosure process more susceptible to the zombie problem," he added.
 
“In states with a bloated foreclosure process, the increase in zombie foreclosures is actually a good sign that banks and courts are finally moving forward with a resolution on these properties that may have been sitting in foreclosure limbo for years,” Blomquist said.
 
In many markets there is plenty of demand from buyers and investors to snatch up these distressed properties as soon as they become available to purchase, according to RealtyTrac.
 
Florida had the highest number of any state with 35,903, despite a 35% decrease in zombie foreclosures compared to a year ago, where they numbered 54,908 in the first quarter of 2014.
 
Zombie foreclosures accounted for 26% of all foreclosures in Florida.
 
New York zombie foreclosures increased 54% from a year ago to 16,777, the third highest state total, representing 19% of all residential properties in foreclosure.
 
Illinois had 9,358 zombie foreclosures at the end of January, down 40% from a year ago but still the fourth highest state total, while California had 7,370 zombie foreclosures at the end of January, up 24% from a year ago and the fifth highest state total.
 
“We are now in the final cycle of the foreclosure crisis cleanup, in which we are witnessing a large final wave of walkaways,” said Mark Hughes, Chief Operating Officer at First Team Real Estate, covering the Southern California market. “This has created an uptick in vacated, or ‘zombie’, foreclosures and the intrinsic neighborhood issues most of them create."
 

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