zombie foreclosure alert
A ZOMBIE FORECLOSURE takes place when the property has entered the foreclosure process but is vacated by the owner and left unattended despite the fact the owner still has the legal right to live at the property. This foreclosure process is not short and sweet, but rather it can be a long and drawn out process. The average home foreclosure process takes 1,031 days – that’s almost three years!
A lot of homeowners pack up and move out as soon as they receive an initial foreclosure notice because they are unfamiliar with the entire foreclosure process. Typically, in the homeowners’ mind, the lender will just take over the property. Unfortunately, after the homeowners moves out, in some cases, we see the bank still has not completed the foreclosure process leaving the homeowners as the actual owner instead of the bank/lender. The homeowners have no clue that they are still on title and essentially still own the home. This is how a zombie foreclosure comes to be.
The haunting of zombie foreclosures have affected many and there are currently 152,000 zombie foreclosures throughout the United States according to RealtyTrac. That number of zombie foreclosures reflects 21% of all foreclosures nationwide.
Why are there such high numbers of zombie foreclosures?
By and far, it’s mostly the fault of the banks for the high number of zombie foreclosures. The last thing most homeowners usually want to do is to delay the foreclosure process through the court systems. Whereas, the bank is sometimes in no hurry to pursue the foreclosure process as they don’t want to be on the hook for liens by the city for the failure to maintain the property, outstanding property taxes and HOA dues and other needed routine maintenance.
Zombie foreclosures are still weighing heavily on many markets across the United States although Massachusetts was not hit as hard as Florida, Maryland, New Jersey and Illinois. The good news in all of this is that the number of foreclosure starts (think new foreclosure filings) has begun to decline and we are currently seeing numbers at their lowest level since 2005.
February 2014 – properties with foreclosure filings = 536
Month-over-month percentage change = 2.90
Year-over-year percentage change = -29.84
Housing units per foreclosure filing rate = 3,508
Also known as “zombie properties” or “zombie title”, these foreclosures also exist where properties are not worth taking over for the lender. Such as an old home that is in rough shape that would cost much more to rehab the property then it is actually worth. Banks also don’t want to take on properties that are in dire need of repair or if it has squatters in it. On another note, some properties are still feeling the effects of the robo-signing scandal and therefore the foreclosure process cannot be completed.
If foreclosure affects you, here are a few tips to avoid being a zombie statistic:
Wait out the foreclosure process. Don’t move out until you actually receive a notice to vacate!
Verify that title to the property has been transferred out of your name. You can do this by going to your local county recorder’s office (or website) and make sure a new deed was recorded.
Other Zombie Issues
Zombie foreclosures don’t just affect the bank and homeowner. They also bring down home values in the neighborhood because the property goes into disrepair and also becomes a target for vandalism.
The good news is that a zombie foreclosure can be a great investment opportunity.
Don’t be haunted by a zombie foreclosure. It can damage your credit score, rack up debt in your name and also drag down the neighborhood.
Sell My Housewe buy houses, Zombie Foreclosure Alert