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Is There a ‘Zombie Apocalypse’ Ahead for Vacant Properties?

In light of the indomitable presence of COVID 19, many zombie foreclosures have spiked across the U.S. with Americans battling to keep up with their mortgage payments, according to ATTOM’s most recent vacant and zombies foreclosure report.

The report poses the question: Are Americans in store for a "zombie apocalypse," which not only would hit financial institutions in their pocket, but also would jeopardize neighborhoods?

Not only have record job losses culminated from the pandemic, predictions that the economic impact will extend beyond the next several months are rampant. Just consider this: In the first four weeks alone following the White Houses’ declaration of a national emergency, more than 22 million Americans had lost their jobs. As time goes by, commentators are warning of an impending economic downturn as hard hitting and disruptive on par with The Great Depression.

According to ATTOM’s third-quarter 2020 Vacant Property and Zombie Foreclosure Report, more than 1.5 million residential properties or 1.6% in the U.S. are vacant.

What’s more, 216,000 homes that are undergoing foreclosure, 7,961 (3.7%), dwell vacant as zombie foreclosures. That means that this quarter, zombie foreclosures have parachuted.

Given the total cost of upkeep becomes their responsibility, such foreclosures are a costly proposition for banks. Undesirable neighborhoods with low property values tend to be common targets for zombie foreclosures.

Banks will derive a big boost toward circumventing costly losses a hit to their reputation by keeping a close eye in the rise in zombie foreclosures. To help more effectively mitigate risk, tapping real estate data can be a productive tool.

A report indicated that 1.6% of all homes in the U.S. are vacant, numbering 1,570,265 residential properties, with 7,960 or 3.7% of those vacant properties in the process of foreclosure, otherwise known as “zombie foreclosures.

That’s according to ATTOM Data Solutions’ Q3 2020 Vacant Property and Zombie Foreclosure Report.

The Company’s vacant properties analysis showed that while the number of properties in the process of foreclosure (215,886) in Q3 2020 is down 16% from Q2 2020 (258,024), the percentage of those properties that have been abandoned as zombie foreclosures is up from 3% in Q2 2020.

The report suggested that despite the increase, “as the federal government attempts to shield the housing market from an economic slide stemming from the Coronavirus pandemic, the 7,961 zombie foreclosure properties continue to represent a very small portion–just one in every 12,500 homes–of the nation’s 99.4 million residential properties.”

About Author: Chuck Green

Chuck Green has contributed to the Wall Street Journal, Washington Post, Los Angeles Times, San Francisco Chronicle, Chicago Tribune and others covering various industries, including real estate, business and banking, technology, and sports.

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