BellaC (California)
Posts: 1
Posts: 1
Posted:
Gary Poulos was supposed to spend his summer packing up, selling his home, and moving out. Instead, he's busy dealing with the property next door. He refers to his neighbor as “Mr. Bank.” You could say that “Mr. Bank” isn't exactly a great next-door-neighbor. His yard is falling apart, the garage door is mangled, and trash is accumulating in front of his home. He's never at home and rarely takes calls. When he does answer, he's not exactly talkative. Of course “Mr. Bank” isn't an individual, he's the lending institution that took possession of the property when the homeowner could no longer make mortgage payments. Unfortunately, situations like this one aren't uncommon and foreclosed properties all over the country are falling into disrepair.
What are zombie foreclosures
While the term “zombie foreclosure” may seem a little melodramatic, it's actually a fitting name. Zombie foreclosures refer to those properties that are in a state somewhere between the living and the dead. On the one hand, the foreclosure process has begun and the residents have vacated the property. But on the other hand, the bank hasn't finalized the foreclosure process and auctioned it off to a buyer. The result: an abandoned property falling into disrepair.
The problem with zombie foreclosures
Not only are they an eye sore for others in the neighborhood, but they are negatively affecting the housing market as well. Take Gary Poulos's situation for example. He was supposed to be selling his home this summer. But he is justifiably worried that by listing his home on the market now, he'll get less than it's worth because of the eye sore next door. He's stuck holding onto a property he'd rather sell. Across the country zombie foreclosures are lowering the value of other properties nearby and having an overall negative effect on the recovering housing market.
Putting pressure on the banks
The major problem with combating zombie foreclosures is that in most cases, the banks aren't actually doing anything illegal. Because on paper the property still belongs to the homeowner, the bank isn't responsible for it's upkeep until they decide to take possession of it which they won't do until they're ready to sell. Until banks have incentive to clean up a property, it's likely that zombie foreclosures will remain a nationwide epidemic. In the State of Washington a nuisance action can be brought by neighbors against the caretaker bank. What's needed is nationwide legislation that will put more pressure on banks in order to create penalties and incentives to get them to take responsibility for these properties.
There's also an important lesson for homeowners in this. Do not prematurely vacate your property because it is being foreclosed on. In the State of Washington the foreclosure process takes at least 120 to 180 days and can be much longer in the present economy. You can usually stay in your home until you are served with legal papers to evict you. See an attorney for exact information applicable in your state.
Business, real estate, and bankruptcy law and litigation news brought to you by mbblegal.net
Source: 'Zombie Foreclosures' haunt housing market
What are zombie foreclosures
While the term “zombie foreclosure” may seem a little melodramatic, it's actually a fitting name. Zombie foreclosures refer to those properties that are in a state somewhere between the living and the dead. On the one hand, the foreclosure process has begun and the residents have vacated the property. But on the other hand, the bank hasn't finalized the foreclosure process and auctioned it off to a buyer. The result: an abandoned property falling into disrepair.
The problem with zombie foreclosures
Not only are they an eye sore for others in the neighborhood, but they are negatively affecting the housing market as well. Take Gary Poulos's situation for example. He was supposed to be selling his home this summer. But he is justifiably worried that by listing his home on the market now, he'll get less than it's worth because of the eye sore next door. He's stuck holding onto a property he'd rather sell. Across the country zombie foreclosures are lowering the value of other properties nearby and having an overall negative effect on the recovering housing market.
Putting pressure on the banks
The major problem with combating zombie foreclosures is that in most cases, the banks aren't actually doing anything illegal. Because on paper the property still belongs to the homeowner, the bank isn't responsible for it's upkeep until they decide to take possession of it which they won't do until they're ready to sell. Until banks have incentive to clean up a property, it's likely that zombie foreclosures will remain a nationwide epidemic. In the State of Washington a nuisance action can be brought by neighbors against the caretaker bank. What's needed is nationwide legislation that will put more pressure on banks in order to create penalties and incentives to get them to take responsibility for these properties.
There's also an important lesson for homeowners in this. Do not prematurely vacate your property because it is being foreclosed on. In the State of Washington the foreclosure process takes at least 120 to 180 days and can be much longer in the present economy. You can usually stay in your home until you are served with legal papers to evict you. See an attorney for exact information applicable in your state.
Business, real estate, and bankruptcy law and litigation news brought to you by mbblegal.net
Source: 'Zombie Foreclosures' haunt housing market