Number of vacant homes facing foreclosure drops as government orders moratoriums
Zombie foreclosure rates remained low in the second quarter as lenders were banned from foreclosing government-back mortgages amid COVID-19, ATTOM Data Solutions reported Thursday.
Of the 258,000 US residential properties in the process of foreclosure, 3% (7,650 homes) were vacant or so-called "zombie foreclosures," down from 3.1% from Q1 2020. This means one in every 13,000 homes are zombie properties.
Overall, more than 1.5 million properties were sitting empty in Q2 2020, representing 1.5% of all homes.
"The foreclosure and zombie-property picture hasn't changed much in the second quarter of this year, as most lenders are barred from taking action against homeowners who are falling behind on their mortgages," said ATTOM Chief Product Officer Todd Teta.
The total count of properties facing foreclosure fell 8.8% quarter over quarter, down from 282,767 in the first quarter to 258,024 in the second quarter.
The states with the lowest percentage of zombie foreclosures, all at 1.3%, included South Dakota, Idaho, New Hampshire, Utah, New Jersey, Connecticut, and Colorado.
Meanwhile, New York – hard-hit by the pandemic – has the highest count of zombie properties (2,158), followed by Florida (1,136), Ohio (877), Illinois(868) and New Jersey (302).
Teta said that it remains to be seen if foreclosure rates will hold steady or climb once moratoriums are lifted.
"We are in a holding pattern across the country as long as the moratorium continues. At some point, that will have to be lifted, so that banks can make their own decisions about whether to continue delaying foreclosures while the economy recovers," Teta said. "When that will happen is unknown, but that's the point when we will see if foreclosure activity will remain at very low levels or rise."
