"Zombie" Homes Haunt Florida Neighborhoods

A portion of Lake Worth's vacant house inventory is made up of these "zombie" houses. This is where people who own the homes walked away once served with foreclosure papers, but then the bank didn't follow through on the foreclosure since it would cost more than the property is worth. Or, conditions of the home or neighborhood didn't meet an investment "standard." The city established a registry process for financial institutions that have filed for foreclosure and also keeps track of actually foreclosed properties. Click title for link to the article.

Zombie foreclosures have become more widespread in recent years throughout the country, but are especially prevalent in Florida, where as of June 2, 48,630 homes in some stage of foreclosure sat vacant, according to RealtyTrac, a company that tracks foreclosure filings nationwide. That accounts for a third of the 141,406 vacant foreclosed properties nationwide.
Daren Blomquist, vice President of RealtyTrac says zombie foreclosures come in two forms. The first is the unintentional byproduct of Florida’s judicial foreclosure process, which can take months and result in “properties sitting in limbo,” according to Blomquist.
The second involves an intentional delay by lenders, who file a foreclosure case so they don’t lose the option when the statute of limitations runs out, but don’t move it forward because completing the foreclosure would not be financially viable.
“This type of foreclosure is more common in Cleveland and the rust belt cities, for example, banks not wanting to foreclose because of low values and little demand for buyers,” said Blomquist.
But it's not just rust belt cities that suffer.