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Numbers of zombie foreclosures dropping across the country

Since the housing market collapse, residents of Washington, D.C., may have noticed homes that were left sitting empty for months or years. The market has since recovered in many areas of the country, but many homes are still vacant. Most of these vacancies were the result of foreclosure processes that began when homeowners suffered from financial difficulties, such as job loss or insurmountable debt. When mortgage issues force a homeowner out, but the bank has not yet repossessed the home, this is known as a zombie foreclosure.

Why do banks, which typically own a home loan, let houses sit for so long after families have left? In many cases, home values were not sufficient enough to justify banks spending money to maintain the property and get it ready for resale. When this happened, homes often became a blight on neighborhoods, driving other property values down and sometimes attracting vermin, drug dealers or squatters.

RealtyTrac has recently reported that the numbers of zombie foreclosures across the country have dropped 10 percent from last year. Banks are starting to repossess homes at faster rates, meaning houses are vacant for less time than they had been previously. Foreclosure processes have also been streamlined, allowing new owners to move in and help raise neighborhood market values.

Even so, many depressed areas are still suffering the effects of zombie foreclosures. There are still about 127,000 vacant homes in foreclosure across the country. Many other families are still attempting to delay or stop foreclosure by filing for bankruptcy or negotiating with their lenders. The ultimate results of the national zombie foreclosure epidemic remain to be seen.

Source: CNBC, "Banks annihilating 'zombie' foreclosures," Diana Olick, June 11, 2015

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