Research shows that so-called “zombie foreclosures” are emerging in much bigger numbers again as distressed homeowners abandon their properties in the belief that somebody soon will repossess them.
Remember Jingle Mail? When someone who has a mortgage decides they can’t or won’t pay it and are willing to give up their home, they mail the keys to the lender as many did during the 2008 housing crisis to popularize the term. The more industry-correct name for this is voluntary foreclosure. The borrower no longer sees a way to catch up on their mortgage, or they calculate that to do so would put them in an otherwise untenable financial position, so they move out. Thus Zombie Foreclosures.
Around 1.4 million residential homes in the U.S. stood vacant in the second quarter, amounting to 1.4% of all homes, ATTOM Data Solutions said in a new report last week. That’s up almost 28% from the first quarter and suggests that more distressed and vacant homes might end up on the market soon.
Zombie Foreclosures refer to homes left vacant by homeowners who have fallen behind on their payments and misbelieve that they have to move out immediately when they receive a foreclosure notice. They don’t realize that they still own the home until the foreclosure process is completed, which can take some time.
For many reasons, a lot of lenders don’t get around to completing foreclosures. As a result, those abandoned homes might sit vacant for a long time and fall into disrepair. That’s a problem because it not only has safety implications but can also lower the value of other homes in the community.
Rick Sharga, executive vice president at RealtyTrac, an ATTOM Data Solution company, blamed the rising zombie foreclosures on government officials. He said they were trying to prevent unnecessary defaults by delaying foreclosure proceedings. But, unfortunately, the delays often last so long that the borrowers abandon the home before the lenders complete the foreclosure.
the “Cashflow Chick,” Founder of The Tryllion Group, Investor/Entrepreneur having done $150 Million+ in real estate transactions; Specializing in Non-Performing Notes. She has been a regularly featured guest on “The Cashflow Guys” podcast, and you can also find her on many other Real Estate and Entrepreneurial podcasts and in the Wall Street Journal as well. She also speaks at various Real Estate Investing clubs and conferences across the country. Paige teaches the “Building Wealth with Notes” Workshop that drills down into the details of how to successfully buy Non-Performing Notes, create passive income, and mitigate risk. www.CashflowChick.com/training
Surviving the crash of 2007, Paige knows how “life happens” every day. Her passion is to help people build wealth, secure their financial future, enjoy life, and be ready-not broken! Whether it is improving communities one house at a time, assisting borrowers in staying in their homes, or working with other investors to learn a new way to earn higher investment dollars for their retirement years potentially, Paige dedicates herself and her business to helping people improve their lives in every way. For more information got to www.CashflowChick.com