Zombie Foreclosures Up Slightly, But Still Just a ‘Blip on the Radar’

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Zombie foreclosures increased slightly in the fourth quarter of 2019 but remained a mere sliver of overall foreclosure activity, according to ATTOM Data Solutions.

A zombie foreclosure is when a homeowner who has defaulted on his/her mortgage permanently vacates the home.

About 8,670 homes nationwide are currently sitting empty as zombie foreclosures – down significantly from the years that followed the economic crisis of 2008.

According to the firm’s Q1 2020 Vacant Property and Zombie Foreclosure Report report, about 282,800 homes are in the process of foreclosure, with about 8,700, or 3.1% sitting empty as “zombie” foreclosures.

That’s up from 3% compared with the fourth quarter of 2019 but down 5.8% compared with the first quarter of 2014.

The total number of properties in the process of foreclosure in the first quarter is down 1.9% compared with the fourth quarter of 2019, while the number vacant foreclosures is up 1.7%, meaning that the level of zombie properties rose while the count of foreclosures dipped.

Since 2016, the number of homes facing possible foreclosure is down 27%, while the tally of unoccupied properties in the foreclosure pipeline has declined 53%.

“Homes abandoned by owners facing a possible foreclosure remain little more than a blip on the radar across the country, as one of the main scourges of the Great Recession continues to show little or no signs of re-emerging,” says Todd Teta, chief product officer with ATTOM Data Solutions. “Even with the slight increase in these so-called ‘zombie foreclosures,’ so far this year, there are still pockets of distress with elevated numbers of abandoned homes. But in yet another reflection of how the national housing market is still booming, you can drive through many towns and not pass a single such property.”

States with the highest zombie foreclosure rates in the first quarter include Ohio (6.8%), Indiana (5.1%), Illinois (4.7%), Oklahoma (4.5%) and Maryland (4.3%).

States with the largest quantities of zombie foreclosures include New York (2,206), followed by Florida (1,390), Ohio (977), Illinois (943) and Pennsylvania (317).

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