Almost 1.4 million homes in America were vacant as of May 2016, according to real estate information company RealtyTrac's recently released Residential Property Vacancy and Zombie Foreclosure Report for the second quarter 2016.
Those 1.4 million vacant homes represent 1.6 percent of all 85 million residential properties in the country. The most recent numbers are a 2.7 percent increase in vacant properties from the previous quarter.
Zombies Becoming Less Common
While the number of vacant properties ticked up slightly, the number of zombie properties, which are residences that are vacant and in foreclosure, declined. 4.7 percent of properties in foreclosure, which is 19,187 residential properties, are vacant. That's a 3 percent decline from the quarter before it and a 30 percent dip from the same quarter in 2015.
The states with the most zombie foreclosures are New Jersey (4,003), New York (3,352), Florida (2,467), and Illinois (1,074).
From the states with at least 100 zombie foreclosures, those that had the most by percentage are Oregon (11.8 percent), Indiana (9.5 percent), Kentucky (8 percent), and Maryland (7.2 percent).
From all of the metropolitan areas of the country with at least 100,000 people, New York by far had the highest number of zombie foreclosures with 3,526. Philadelphia came in a distant second with 1,744.
Why Zombie Foreclosure Happens
Zombie foreclosure can happen if a homeowner has no interest or ability to keep their home, believes foreclosure is imminent, and moves out before a foreclosure sale and title transfer goes through. They think that they might as well accept the inevitable and move on with life.
The problem with doing that is that moving out alone doesn't resolve anything. Just because you're not physically there doesn't mean you're not responsible for the house anymore. As long as you're the legal owner, you're still responsible for all expenses.
And you could be the legal owner of the property for a lot longer than you planned. Sometimes a foreclosure sale doesn't go through as expected. The bank may have too many other foreclosures to worry about. Or maybe your case just falls between the cracks. That's how zombies are created.
While you're living somewhere else and trying to move on with life your old home keeps accumulating expenses. Taxes, insurance, mortgage payments, repairs, maintenance, etc all get added to the amount of money you already owe.
Steering Clear Of Zombies
If your bank intends to foreclose on you, you can avoid zombies by reaching a resolution with them before you move out. You may be eligible for a short sale that allows you to sell your house for less than it's worth or deed in lieu of foreclosure agreement that gives the home to the bank. Both of those options are preferable to foreclosure. If you include a deficiency judgment waiver in those agreements you can avoid being sued for the difference between what your home sells for and what you owe on your mortgage.
An even better option is to try to get a loan modification that permanently lowers your payment and returns your loan to normal. That way you can stay in your home and avoid foreclosure and zombies.
Loan mods are great, but most people who apply on their own are denied. Many homeowners find the application process to be a nightmare. They're asked to resubmit documents, they wait, and then they're denied. The stress can be serious enough to cause physical and mental health ailments.
You have better chances of getting your loan modification approved if you work with an experienced professional, such as an attorney who focuses their practice on foreclosure defense. A qualified attorney could also assist you with your short sale or deed in lieu of foreclosure.
Keep in mind that if your home is in danger of being foreclosed upon, just moving out could make things worse. You'll just end up being a statistic in the next RealtyTrac report. And working with your lender on your own may not get you the results you need. Take advantage of all the resources and programs available to people in your situation. This site has information on all of them.
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