Lenders Go After the ‘Zombie’ Homes
Banks want to get rid of “zombie” foreclosures and prevent them from haunting housing markets. At the end of the third quarter, 18,304 residential properties in the foreclosure process were vacant (dubbed “zombie foreclosures), a 9 percent drop from a year ago.
Read more: Metros Plagued With Surging Vacancies
That represents about 4.7 percent of all residential properties in foreclosures in the third quarter, according to ATTOM Data Solutions’ Q3 2016 U.S. Residential Property Vacancy and Zombie Foreclosure Report.
“A strong seller’s market along with political pressure has likely motivated lenders to complete the foreclosure process over the past year on many vacant properties that were lingering in foreclosure limbo for years,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “While that has reduced the number of vacant properties in the foreclosure process — so-called zombie foreclosures — it has also resulted in a corresponding rise in the number of vacant bank-owned homes. Assuming that the foreclosing lenders are maintaining these properties and paying the property taxes, they pose less of a threat to neighborhood quality than zombie foreclosures, but they still represent latent inventory in an inventory-starved housing market.”
Overall, nearly 1.4 million residential properties were vacant by the end of the third quarter.
The following markets had the highest number of vacant REOs:
- Florida: 5,880
- Michigan: 4,661
- Ohio: 3,585
- Illinois: 2,652
- Georgia: 2,626
At a metro level, the areas with the most vacant REOs were: Detroit, Chicago, Miami, Philadelphia, and New York, according to the report.
Meanwhile, the states with the highest number of vacant foreclosures – or zombies – were in New Jersey (3,698), New York (3,556), Florida (2,528), Illinois (1,018) and Ohio (999). At a metro level, zombie foreclosures were highest in New York (3,590), Philadelphia (1,525), Chicago (783), Miami (694), and Tampa (603).
Source: RealtyTrac
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