There are hundreds of thousands of zombie homes throughout the country. And they pose a lot of serious problems for the housing market. A home becomes a zombie home when its owner abandons it believing that the bank has completed the foreclosure process and will soon be auctioning it off. In reality, the bank has decided not to go through with the foreclosure and the home falls into disrepair and the property accumulates taxes and fees that the homeowner will ultimately be responsible for.
Flaws in the foreclosure process
According to RealtyTrac, a company that gathers data about the real estate market, the majority of zombie properties are in Florida, Illinois where the state employs a judicial foreclosure process. This longer foreclosure process takes an average of about 5 years, which is almost twice as long as the foreclosure process in states that use the non-judicial foreclosure process.
When the foreclosure is drawn out, the homeowner is more likely to move out before the bank has actually decided to take control of the property and auction it off. Zombie foreclosures became an especially big problem during the housing crisis when banks had so many properties to auction off, they sometimes decided to abandon the foreclosure process on homes they felt would be too difficult or costly to sell off.
Zombie homes and the housing market
In addition to the problems zombie homes cause for homeowners, there also many problems they can cause for the housing market in general. While zombie homes can eventually be fixed up and sold off, the damage they can cause to the surrounding neighborhoods is sometimes longer lasting. The abandoned properties attract squatters and criminal activity which decreases the value of homes in areas already hit hard by the housing crisis.
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