The Vacant Dead: The 50 US Cities With The Most “Zombie” Foreclosures
Over the past five years, first as a result of the 2010 robosigning scandal and then due to the natural build up of a massive backlog of cases in judicial states, which in some cases is well over 1000 days, America’s conventional house clearing mechanisms of foreclosure and bank repossessions had become clogged up to previously unseen levels.
Which was precisely how the banks wanted it: after all, by minimizing the supply of housing for sale, this served as an aritifical subsidy to the housing market. It achieved two things: it kept housing prices artificially high, and allowed millions to live in their house mortgage-free for years, while also providing a “spending stimulus” to millions who in lieu of spending cash on rent (or mortgage) could purchase discretionary items.
Five years later, however, with the stock market at all time highs and the housing recovery supposedly in full swing, albeit on an artificially inflated basis due to abnormally low inventory, the banks are starting to collect.
As the following chart shows, the foreclosure completion process has suddenly soared now that banks are finally evicting, and as a result REOs have surged 50% from a year ago to a 27 month high! Not what one would expect from a healthy, vibrant and “clearing” housing sector, it merely shows that the banks are now confident enough with the level of demand that they are happy to leak out far more of their accrued supply into the general market, something we dubbed “foreclosure stuffing” all the way back in 2012.
What this means is that suddenly millions of Americans who had been allowed by their repossessing banks to squat unbothered, are about to find that in the real world if one can’t afford a house, one rents, or else finds a nice enough bridge under which to pitch a tent.
It also means that what the NAR has been complaining about for years, namely the lack of inventory, is about to become a horn of plenty, as millions of previously unavailable houses are put on the block, pushing the price of housing lower.
Most importantly, it means that if not done correctly the process may derail whatever vestige of a housing recovery the media wants the general population to believe is taking place, aside from Chinese hot-money launderers buying NYC triplexes all cash, sight unseen of course.
Nowhere will this reversal be more visible than in the places where not even the prospect of living mortgage free appealed to former homeowners. According to RealtyTrac there were some 127,021 homes actively in the foreclosure process been vacated by the homeowners prior to a completed foreclosure, representing one quarter of all 527,047 properties in foreclosure. These owner-vacated foreclosure properties will likely end up as short sales, foreclosure auction sales or bank-owned sales, also known as even more supply.
These are the so-called “Zombie” foreclosures (not to be confused with “Vampire” foreclosures in which the owner continues to inhabit the foreclosed property).
According to RealtyTrac’s Darren Blomquist “as banks push through long-deferred foreclosures that are more likely to be owner-vacated this year, we are seeing a somewhat surprising increase in zombie foreclosures in markets with overall low foreclosure rates such as Los Angeles, Houston and Boston.” Almost as if the housing recovery was not really a recovery but a giant game of extend and pretend.
And since Zombie foreclosures represent the purest form of housing unaffordability, one not perverted by the differential between a foreclosure start and a completion, but merely the dereliction of one’s former house without regard to one’s credit rating or any other consequences, the cities, MSAs and states where the “Zombie” problem is most acute is also those where the economic situation is getting worst the fastest.
Not surprisingly, among the states the highest zombie foreclosure rates were in New Jersey (one in every 210 housing units), Florida (one in every 324 housing units), New York (one in every 476 housing units), Nevada (one in every 495 housing units), and Indiana (one in every 574 housing units). It also goes without saying that the accumulation of such derelict and unsupervised properties will have a substantial downward impact on home prices.
So for those concerned if their city is among the top most frequented by this particular, and very unpleasant, breed of “zombies”, here are the top 50 cities in the US in which zombie foreclosures represent the highest percentage of all properties in foreclosure. For those readers certainly located among the Top 10, now may be a great time to hit a bid, any bid and get out while the getting is good.
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I need a fraud investigator in the South Florida, Keys, area
Not much time to comment as I am going to court for a friend for a “status hearing”.. the status is the same. The plaintiffs have not and can not show they “took the note by transfer and are entitled to payments under the Note,” … read your Note those are the requirements of the Note so how the hell can any Court impose an obligation without imposing the requirements of the instruments. ??
And because I have had him send letters off to various banks and agents requesting information on the loan he now has several claimant’s to the same property… “would the real party in interest please take the stand and swear that they are the real party in interest, have taken the Note by transfer and are entitled to payments under the Note”.. No one willing to swear under pains of penalty of perjury?? No one.. well it seems that there is no claimant after all so until one comes forward this court is obligated to dismiss the fraudclosure with prejudice for these parties and any party receiving or relying upon the validity of any of these entities not willing to swear or validate their claim. After all as the supreme court just handed down a decision saying that “nothing plus nothing equals nothing”.
And considering that they have collected insurance many times over for all the mortgages in the SPV’s which they managed to “statistically” show that 24% were in “default” to collect insurance on the entire amount (all the alleged mortgages in the SPV not just the alleged “defaulted” ones) and as anyone knows it matters not who pays a debt once the debt is paid it is vanquished for all time for all parties. They can not collect from an insurance company and then turn around and collect from you as well. And this means also that all the other mortgages not in “default” were paid so why the hell are they not getting their Note back marked “paid” and the property reconveyed as required under the Deed of Trust which is the very instrument they are allegedly enforcing…….???? Thus anyone and I mean anyone who has an alleged mortgage in the last fifty or so years, first never got a “loan” of anything prior to signing the Note as required “In return for a loan I have received, I promise to pay”…. Condition precedent… did not happen.. did you receive something prior to you signing the note?? No!! and as the recent supreme court case revealed they can not show when the contract was “consummated” which means they can not show when or if they ever “loaned” anything so the rescission date does not start until the date of “consummation”.
Ooops, it’s finally coming unraveled no matter how the State courts have been complicit in the criminal enterprise and no matter how stubbornly people want to insist that they got a loan form someone other than themselves and were swindled.. the proof is in the pudding… no evidence to the contrary and no one to swear under pains of penalty of perjury that they are entitled to payments under the Note… end of story!!!
Oh one last thing read your DOT it does not securer the fricken Note!!!!!! it secures “the debt evidenced by the note” No Note no entitlement to payments under the Note no securing of any unverified debt…. !!!!!
So gather the evidence of the collusion, notice the court, require production etc etc and gather prima facia evidence on all the colluders, especially the State actors, so you will be able to put together a prima facia case (not relying on discovery) because you have lots of evidence… read the State Statutes and laws to show how they are violating even the State Statutes and bring a 42 USC 1983 Depravation of Rights suit done properly!!!!!
“When corruption is no longer profitable, it will cease”…. hit them where it hurts in the pocket book!! And until such time as a bona fide entitled party pops up to make a claim stay the fuke in your… yes your home. Remember you only use the “equitable value of the home not all the other values, such as use etc. so at best they can put a lean on it to be paid upon you deciding to sell it for currency or “equitable value” unless they are the Lender and are entitled to payments under the NOte because they did in fact give you something of substance and value prior to you “returning” a “Conditional Promissory Note” which means it can not be signed in blank…. because it is not a “negotiable instrument’ as defined by UCC 3.. and oh by the way leaving the “pay to the order of” line blank ____________ is not “signed in blank” as defined as “signed pay to the order of bearer, cash or some other indication that the bearer is entitled to payment” Try to cash a check or other instrument that says “Pay to the order of ___________” and it left blank…. who the hell is ________, where is _______ ID? Fricken blank is blank and blank can not give an “order to pay”.
Ok gotta go, chew on this for a few. Remember clarify, verify, validate, authenticate and authorize.
Great Job explaining how to suit them and what to look for in our doc’s. I have sent notice of default to my bank for not producing proof in a timely manner as requested 30 days.
I used a notary as a third party witness to the fact.
They then backed off now for a year. They even stop paying taxes on the house. I told them that default comes with a fine or judgement. What can I file to get the mortgage cancel or should I pro-sue the judgement.
The first of October we all get our property tax notices in Alabama. Its very important that you go to the courthouse and pay the taxes on your property and get a receipt. Do it right away to be first just in case the claimant company tries to pay it too. Keep the receipt. Who is paying the taxes is very important in Alabama when you sue to prove who ownes a property.
Also if you are 62 or 65 or older fill out the tax release, pay the current year and never pay again as you as a senior will be exempt. Still, each year, go get a receipt showing you are exempt in writing for each year and that the tax notices are coming to YOU as the name on the tax notice envelope mailed to your properties address. That shows who the State and County considers the property owner.
I’m not a lawyer, just on old man that understands how being screwed by mortgage companies is being done and things you can throw on their road that will give them a flat tire or two.
Semper Fi
Sue them. They do not want to go to court against you because if you win, and you should, that would get out and no telling how many more of you would follow. Best to just leave you ready to fight folks alone.
Surely “Foreclosure and stuffing” only occur at Thanksgiving?
When are the courts going to be held accountable for dismissing cases knowing the banks have committed. foreclosure fraud?We have been unsuccessful in fighting fraud in Tennessee courts.
I want an answer to this also for us in MA? We met the Burden of Proof and had a Preponderance of Evidence and the bank did not and could not provide any production of documents. We also proved the MA foreclosure laws were ignored and the property was bought by an INVALID CREDIT BID? The Judge made an unethical Judgment and ignored his oath and the rules of Law
How is it that someone who paid off their loan got illegally foreclosed and there are people that have not made a mortgage payment in 4 years and are living in their homes?
Going on my eighth year without paying the criminals (except for two fraud-riddled and breached modifications) and still in my house. Does that bother you?
@rogerrinaldi No it doesn’t bother me cause you stated they are criminals! What bothers me is people who don’t pay their mortgage cause they don’t have the money and get away with it. Our loan was paid off over 5x and we have proof of every payment that was never credited. Our foreclosure was illegal and we had no knowledge of it cause they ignored the MA foreclosure laws. It was not foreclosed it was illegally done by an INVALID CREDIT BID and we had a Corrupt Judge. We paid almost $35,000 in legal fees! WHo has money to pay legal fees if they are behind on their loan? I am not going to say much more on here cause we have an ETHICAL INVESTIGATOR that reached out to us and our Preponderance of Evidence and going to put officials behind bars. One of the Guilty parties killed himself because he knew he was going to be exposed and I am sure it went much deeper he was guilty of FRAUD, Inappropriate Behavior, Perjury etc. I hope you expose your situation and win! Good Luck
Who is your Loan Company and where do you live? Do you have a lawyer?
I too have had 2 modifications fall through and am going on my 6th year in foreclosure and 2 filing by the bank. I feel if the bank had what they legally needed to foreclose they would.
You know I don’t know about where you live buy in Dayton, Ohio, where I live, the mass majority by a long short of foreclosed on and vacant properties are in the City proper. And in the city proper most houses there are lucky to be worth $50,000. Now as the Banks have changed their lending criteria to be not lending on properties under $50,000 I have to ask… if one can’t get a mortgage… then who is it that’s gonna buy these houses? I know I sure wouldn’t.
John – that’s an easy question and answer: investors who began to leave the market over a year and one half ago due to the rising values of home have been waiting in the lurches for the right time when the market would begin to turn downhill. With the release of these zombie homes that will bring the inventory up and values down. Perfect situation for the ‘cash’ investors. They will buy them for resale (oh and make a huge profit) or they will renovate and turn them into rentals. All of these homeowners who have managed to live in their homes without being foreclosed are now going to be ‘renters’ and that market will blossom. There’s no way anyone can convince me that these investment groups are not related somehow to the banking industry! Thieves, crooks and the corrupted courts are all cohorts!
Wrong. Renters are not there either, so investment buyers are not going to buy up properties for that purpose either. “Smart money” investment groups started to realize a couple years back that these foreclosure backlogs weren’t such a great deal after all. The real economy is not doing well at all and only the choice real estate is being bought by hedge funds etc., the rest will take years to clear. Just because it’s cheap, doesn’t make it a good investment. The number of qualified buyers vs available houses is maybe 1/4 what it was. Look at Detroit. Lots of cheap houses, even free, but nowhere near enough buyers or renters. It’s becoming like that across America.