Tuesday, September 10, 2013

Real Estate Woes and “Zombie” Foreclosures

According to a recent news report from DSNews.com, real estate attorneys and professionals currently face a new threat of “zombie” foreclosures.  No, the term isn’t supposed to imply an end to the real estate world as we know it.  Indeed, house prices continue to rise across the country and many commentators describe the housing market in terms of recovery.  Rather, according to DSNews.com, these “zombie” foreclosures “take place when a bank initiates foreclosure on a property but then abandons the process, leaving the property in a sort of no-man’s-land—vacant but not for sale.”  An article in the Chicago Tribune earlier this year described the properties as “homes that, like their pop culture namesakes, aren’t exactly alive—but they’re not dead either.”
The “zombie” foreclosure phenomenon is nothing new.  Commentators have been discussing the sheer number of these properties for months now.  However, we didn’t know these properties would continue to plague the real estate market amidst its attempts at recovery.  Attention to the “zombies” makes clear that foreclosure problems remain alive in Illinois and across the country.  If you’re at risk of foreclosure or have questions about avoiding foreclosure, the experienced attorneys at the Emerson Law Firm can talk with you today.
Hundreds of Thousands of “Zombies” in America
How many properties fall into this “zombie” foreclosure category?  Many real estate professionals remain shocked by the high number of “zombies” across the country.   An article in the Chicago Tribune this past April reported that there were more than 300,000 “zombie” foreclosures in the United States.  The number has declined, but according to RealtyTrac, the numbers remain a bit staggering.
As of now, there are about 167,000 properties across the country that we can classify as “zombie” foreclosures.  In addition to those properties, RealtyTrac believes “there are hundreds of thousands of unlisted REOS and even more properties winding through lengthy judicial foreclosure procedures.”  RealtyTrac explained that these “unlisted foreclosures and bank walkaways” were rare to see at the height of the foreclosure crisis, but the number of “zombies” have “mushroomed” as the market has begun its recovery.  As a result, there are a lot of properties out that that are “stuck in foreclosure limbo.”
Are some banks guiltier than others?  Bank of America has more “zombies” than any other bank, according to RealtyTrac, with nearly 24,000 foreclosures currently in limbo.  Well Fargo is close behind with nearly 23,000, while JPMorgan Chase is dealing with more than 16,000 “zombie” foreclosures.
And which states have the most of these “zombie” properties?  According to DSNews.com, Florida has the highest number of unoccupied properties, with a total of more than 55,500.  But Illinois isn’t safe from this epidemic.  The experts at RealtyTrac estimate that there are about 1 million vacant properties “that need to be sold but are currently out of reach for most real estate agents.”  This comes on the heels of news reports that the real estate market is currently up against inventory shortages.  
RealtyTrac emphasizes the importance of turning these “zombie” properties into homes available for purchase if we want to see a market recovery.  At the same time, the prevalence of these properties shows us the “cracks in the foundation of the recovery,” as the Chicago Tribune reported.  Right now, we’ll have to wait and see.
In the meantime, if you have questions or concerns, don’t hesitate to contact an experienced foreclosure defense attorney today.
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