Zombies have become more commonplace this year, but it’s not what you think. Zombie foreclosure* rates are up in the third quarter of 2020, according to a new report from ATTOM™ Data Solutions.
*There’s no walking dead here. A zombie foreclosure is a home that has been abandoned after a homeowner vacates the properly after receiving a foreclosure notice.
According to the company’s 2020 Vacant Property and Zombie Foreclosure report, 1.5 million residential homes (or 1.6 percent of all homes) in the U.S. are vacant. While 216,00 homes are in the process of foreclosure, this figure is 16 percent lower than what was reported in the second quarter. Of those, 3.7 percent (or 7,960 homes) are considered zombie foreclosures—these have increased by 3 percent since the second quarter.
“Abandoned homes in foreclosure remain little more than a spot on the radar screen in most parts of the United States, posing few, if any, problems from neighborhood to neighborhood. But the latest numbers do throw a small potential red flag into the air, given the increase in the percentage of zombie foreclosures,” said Todd Teta, chief product officer with ATTOM Data Solutions.
However, foreclosures have been somewhat muted due to the protections against the coronavirus pandemic—the temporary ban on foreclosing on government-backed mortgages is set to expire on Aug. 31.
Which regions are experiencing the highest zombie foreclosure rates? The Midwest and South. Clusters can be found in Kansas (15 percent), Missouri (11.2 percent), Georgia (11 percent) and Tennessee (10.3 percent). The following states have zombie foreclosure rates that fall below the national average, with most located in the Northeast and West: Utah (1.1 percent), Idaho (1.2 percent), New Jersey (1.6 percent), Colorado (1.8 percent) and California (2 percent).
Zombie rates increased in all but one state: Hawaii. The rates decreased in the District of Columbia.
“It appears that an increased number of vacant foreclosure properties may be an unintended consequence of the foreclosure moratoria put in place by federal, state and local governments,” said Rick Sharga, executive vice president at RealtyTrac, for the report. “Vacant properties can contribute to neighborhood blight, and become safety hazards—especially during a pandemic. So the sooner these abandoned properties can be processed and sold to homebuyers or investors, the better it will be for communities and neighborhoods across the country.”
