How to Kill a Zombie (Foreclosure) in Your Neighborhood
Of course, I am referring to zombie foreclosures: properties where a foreclosure was initiated and the homeowner has walked away, but the bank hasn't completed the process, leaving it in limbo for months or even years. In general, the former occupants don't even realize that, technically, they still own the house.
The problem with these undead domiciles is that, once abandoned, they quickly fall into disrepair and become targets for vandalism, graffiti and squatters, all of which can bring down the value of surrounding homes.
According to Realty Trac, one out of every five homes currently in foreclosure is a zombie property, and in certain metro areas in states like Florida and Nevada -- hit especially hard when the housing bubble burst in 2008 -- that number can be as high as one out of three.
If you have a suspect property in your neighborhood, there are a few things you can do to confirm it's a zombie foreclosure.
First, search for a foreclosure file at your local courthouse or recorder's office. You'll want to pay attention to the date of the last recorded action on that file, and what type of action it was. If you see either an "Order of Sale" or a "Postponement of Sale" as the last action and it is more than 90 days old, you might be dealing with a zombie foreclosure.
Next, contact the utility companies and ask about the account status of the property in question. Though it's not a definitive indicator, homes with no water or power are very likely to be vacant.
Finally, do a visual inspection of the property, ideally with some like-minded neighbors. Obviously, an overgrown yard, accumulated debris, broken or boarded up windows, padlocked doors, signs or notices from servers, will serve to indicate the property is abandoned.
If after all this, you're still not sure if you are dealing with a zombie, conduct a title search to determine the ownership status –- something many neighborhood real estate agents will be happy to do for you.
Aim for the Brain
Once you've determined that you are in fact dealing with a zombie foreclosure her are some potential ways you can kill it.
%VIRTUAL-article-sponsoredlinks%Notify local contractors, developers, or community redevelopment firms about the property. Zombies can be ideal investment candidates for folks who specialize in rehabbing and flipping homes.
Also, check your state and local laws regarding foreclosures –- something, once again, that a friendly local real estate agent can help you with. Some areas have laws on the books that require a foreclosure to be completed by the note holder within 90 days of the original sale date.
If this is the case in your area, and the property is past that 90 day mark, contact the servicer of the loan. Most major servicers have a property preservation department, so notify them that their zombie is on the loose. The civil codes vary, but in general, if the note holder fails to follow through on a pending foreclosure, it can be fined. That's usually enough to light a fire under a bank, but if it still doesn't take action, you can then file a complaint against it with the Consumer Financial Protection Bureau.
If none of these actions gets the problem solved, your final option is to petition the Clerk of the Court to order the completion of the foreclosure. This course requires legal representation, so you will have to either contact your local city official or an attorney to more the process forward.
In all cases however, the more people you have on your side the better your chances are. Agencies, officials, and even banks are more likely to respond to your requests if they know you have a large number of voters and consumers standing behind you. So get your fellow homeowners together and get organized. As the band of survivors on "The Walking Dead" knows all too well, it takes a team to effectively fight off zombies.
No man is an island, or even a peninsula, so I encourage your feedback in the comments below. And don't forget to pick up my book, "Trading: The Best of the Best -- Top Trading Tips for Our Time."