While the nightmarish foreclosure levels reached during the height of the recent recession may seem firmly in the rearview mirror, it’s important to understand that the horrors of the not-so-distant past are still very real for some Floridians. Indeed, hundreds continue to be haunted by what have become to be known as “zombie foreclosures.”
In today’s post, we’ll take a closer look at this phenomenon, including what zombie foreclosures are, why they so prevalent in the Sunshine State, and what affected homeowners can do to protect their best interests.
What exactly are zombie foreclosures?
In a typical foreclosure, the bank will repossess both the title and home, and ultimately hold an auction to unload the property to the highest bidder. While this is normally a straightforward process, things became considerably more difficult during the housing crisis, as banks had trouble getting rid of certain homes. This, in turn, caused their foreclosure inventory to get larger — and more expensive — as they had to cover taxes and other associated expenses.
Faced with this reality, some banks opted to never officially foreclose on some of these properties, meaning that even though the homeowners moved out after receiving a foreclosure notice, the property technically still belonged to them, as the bank didn’t take possession.
Consequently, these homeowners found themselves hit with tax bills, unpaid fines and other unexpected expenses years later for a home they believed had been lost and which they could scarcely afford to cover.
These zombie foreclosures were especially prevalent here in Florida, which once had as many as 91,000 so-called zombie properties.
Why did Florida have such a problem with zombie foreclosures?
Experts indicate that Florida’s problem with zombie foreclosures can be traced largely to its adherence to the judicial foreclosure process, which requires foreclosures to go through the court system. They argue that this state of affairs makes an already lengthy process that much longer.
How are things looking now?
A recent report from the real estate tracking firm RealtyTrac found that the number of zombie properties here in Florida has fallen to 2,467, a 62 percent drop from a year ago.
Similarly, zombie properties in South Florida have fallen by an astounding 67 percent over the course of the last year, sitting at 651 in Miami-Dade, Broward and Palm Beach Counties.
Why has the number of zombie properties fallen so dramatically?
According to experts, the reason behind the decline in zombie properties is that fewer properties are entering foreclosure, such that banks are now in a better position to repossess homes.
Whether you are a homeowner who has encountered problems with a zombie foreclosure or are facing the threat of foreclosure, consider speaking with an experienced legal professional as soon as possible.