One in every five homes is in a state of limbo known as “zombie foreclosures” because they sit vacant and abandoned, and not yet repossessed by the foreclosing lender.
RealtyTrac’s vice president, Daren Blomquist, spoke about this issue along with other real estate experts at a one-day conference this week hosted by the Cleveland Federal Reserve Bank.
“While there is no doubt about the problem, finding a viable solution is difficult, and many at the conference reiterated that there is no one blanket solution; each property will require a slightly different solution,” Blomquist writes in a blog post.
Here are three big takeaways from the conference, according to Blomquist:
- Zombie foreclosures could also become a liability for the distressed homeowners, who may not even be aware they are still responsible for the properties.
- In many cases, zombies are a problem the banks don’t want to take on by completing the foreclosure process because of the extremely low value of the homes backing the loans in foreclosure.
- Most parties involved agree that foreclosure should be fast-tracked on zombie foreclosures, but that is easier said than done given that the homeowner is often difficult to track down, but that is necessary to serve that homeowner with the proper notices of foreclosure.
Florida leads the nation in “zombie foreclosure” metro regions with 5 out of the 10 top located in the Sunshine State. See chart below.