Zombie foreclosures are on the decline, but they’re still scaring people in 60 metro areas and 16 states.
There were 117,298 owner-vacated foreclosures nationwide in the third quarter of 2014, representing 18% of total properties in foreclosure, down from 141,406 in the second quarter of 2014 (17% of all foreclosures) and down 152,033 (23% of foreclosures) in the same period last year, according to data released Thursday by the real estate website RealtyTrac. “Zombie” foreclosures occur when the owner leaves the property, but the bank has yet to take possession of it.
Contrary to this national trend, there were increases in owner-vacated foreclosure in the third quarter in 16 states, including New Jersey, where zombie foreclosures surged 75% year-over-year, North Carolina (up 65%), Oklahoma (up 37%), and New York (up 30%) and Alabama (up 29%). The New York metro area had the most zombie foreclosures (13,366) in the third quarter, followed by Miami (9,869), Tampa (7,509), Chicago (7,326), Philadelphia (5,405) and Orlando (3,732).
A short and efficient foreclosure prevents zombies, says Daren Blomquist, vice president at RealtyTrac. Some states passed laws to give homeowners more time to avoid foreclosure through face-to-face mediation and other means, which sometimes just delays the inevitable, he says. “The best antidote for a zombie foreclosure infestation is a pro-active land bank program like that in Cleveland and, more recently, Chicago designed to aggressively take possession of vacant foreclosures or demolish them.”