Amid coronavirus ban on foreclosures, number of zombie homes drops
The percentage of zombie properties nationwide dropped slightly on a quarter-to-quarter basis, as lenders are unable to move forward on foreclosure activity due to federal restrictions, Attom Data Solutions said.
"Right now, with the moratorium in effect, the number of foreclosures and zombie foreclosures are declining," said Todd Teta, Attom's chief product officer. "Nationwide, those numbers are off by 9% and 12%, respectively, from the first to the second quarters of 2020."
It is very possible that there will be a large increase in zombies and foreclosures after the CARES Act moratorium expires on June 30.
"When the foreclosure ban is lifted, we should start to see the real impact of the pandemic on homeowners' ability to catch up or keep up with their mortgages," Teta said. "At that point, it's hard to imagine anything but an increase — and possibly a big one — in foreclosures and zombie foreclosures."
The size of the increase will be dependent on a number of factors, including how quickly unemployed borrowers find work, and how much leeway lenders are willing to grant to those with delinquent loans.
"The faster lenders feel the need to pursue overdue mortgages, the faster the impact will become clear," Teta said.
Nationwide, there are 7,652 residential properties vacated by their owners and facing possible foreclosure in the second quarter. This represents 2.97% of the 258,024 homes in the foreclosure process.
That compares with 3.07% for the first quarter (8,678 properties) and 2.96% for the fourth quarter of 2019 (8,535 properties).
The total number of properties in the foreclosure process is down 8.8% from 282,767 units in the first quarter.
New York has the highest number of zombie properties, at 2,158 (28% of the nationwide total), but that is only 2.74% of homes in the foreclosure process in the state. Other states with large numbers of zombie properties are Florida (1,136), Ohio (877), Illinois (868) and New Jersey (302).
The states with the highest proportion of zombie properties are Ohio at 6.7%, New Mexico (5.5%), Indiana (4.8%), Illinois (4.7%) and Iowa (4.5%).