Movements in completed foreclosure auctions are recently observed despite the nationwide foreclosure moratoria. This is according to the Q4 Distressed Market Outlook by Auction.com.
There is a 24% uptick of completed foreclosure auctions regardless of maintaining its level to below 78% compared to this time of last year. The moratoria under CARES Act is taking its part in creating a backlog of most likely foreclosures. Auction.com analysis estimates the foreclosure to grow more than 1.1 million by second quarter of 2021.
Activities in completed foreclosures are due to Zombie Homes – vacant or abandoned homes where owners are behind on their mortgage payments. Ali Haralson, chief business development officer at Auction.com says that foreclosure supply is slowly returning to the market as servicers refine their vacant or abandoned procedures and as states gradually open up.
The vacant or abandoned properties are exempt from the national foreclosure moratoria on government-backed mortgages, hence services are able to proceed in completing the foreclosure process.
COMPLETED FORECLOSURE
What’s in it for the owner?
The owner of the zombie home could be free from property tax, HomeOwners Association penalties and any other financial liabilities that a zombie house may have incurred before the foreclosure completion.
What’s in it for the servicer?
With completion of foreclosure, the servicer or private investors who now owns the vacant/abandoned home will be able to re-market the properties. The faster the house sells, the sooner they get their investment back.
What’s in it for the neighborhood?
It is undeniable that zombie homes may endanger the quality of life and property value in the community. As more foreclosures are completed on zombie homes, the neighborhood will be free from derelict houses as soon as they get occupied by new owners or renters.
Jason Allnutt, CEO at Auction.com clarified that nearly all properties now being foreclosed are vacant or abandoned, which means those foreclosures represent a distressed, unoccupied home that can now be returned to the housing market and occupied by a buyer or renter
