What You Need to Know About Zombie Foreclosures

What You Need to Know About Zombie Foreclosures
  • Opening Intro -

    The zombies are coming. In fact, they have already arrived.

    No, we're not seeing the makings of a zombie apocalypse, rather we're learning that the number of abandoned foreclosed homes is on the rise.


The term “zombie foreclosures” represents homes where owners have moved out while in foreclosure, leaving these houses to turn into neighborhood blights.

Zombie Foreclosures

As of 2013, more than 300,000 homes were abandoned across the country. More than 90,000 are in Florida alone with Illinois and California reporting approximately one-third those numbers.

The percentage of homes in foreclose rose by 9 percent in early 2013 to 1.5 million properties. Thus, nearly 1 in 5 foreclosures are of the zombie variety.

Homes At Risk

Your home may not be in danger of zombie invasion, but it might be one of more than 10.9 million where homeowners owe more on their homes than what they are worth. Such “upside down” homeowners are more likely to simply walk away, although such a move does not free them from tax and legal responsibilities.

The problem in many neighborhoods is that zombie homes can quickly infect the entire neighborhood. Such homes feature untended lawns, unkempt houses and provide an invitation for vandals. In some city neighborhoods squatters might take up residence if neighbors are not diligent and the police do not toss them out.

Homeowner Liability

Some of the more than 300,000 zombie homes have not passed into foreclosure. What has happened is that the homeowner has received notice from the bank with its intent to foreclosure, but the bank hasn’t followed through. In the interim, the owners move out thinking that foreclosure is simply a matter of time.

Despite abandoning the property, owners should know that they are still responsible for paying taxes, keeping up the home and making insurance payments. Those that fail to do so are legally liable, although the bank may step in and provide insurance coverage directly.

Local Response

We already know that a zombie foreclosure can affect a neighborhood. On the local level, towns are taking action by passing ordinances to fight back.

In Bremerton, Wash., the town has passed an ordinance mandating the owner of the property register it with Bremerton in an effort to ensure that doors are locked and windows are secure. The home must be inspected at least once a month and the homeowners must provide a 24-hour contact number for emergencies. Owners that fail to comply are subject to “hefty fines” although those amounts have yet to be determined. Collecting said fines may prove challenging if homeowners have declared themselves insolvent.

Avoiding Zombiesm

Distressed homeowners can avoid the zombie stigma by communicating with their lenders. A foreclosure notice may announce a bank’s intent, but follow through may not take place or be delayed by many months, if not years.

Neighbors that recognize that a home is unoccupied should contact their town to inform officials of the same. If the homeowners have skipped the area, then the town can demand that the bank maintain the property. Either way, active neighbors can ensure that a zombie problem does not turn into a nightmare, one that could presage a localized apocalypse.


Insurance Journal: More Than 300K Homes Are Foreclosed ‘Zombies’

Curbed: Bremerton Takes Step To Kill Zombie (Houses)


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Categories: Loans

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".