CBS News reported last month that “vampire foreclosures” could begin to affect the U.S. housing market. A “vampire foreclosure” occurs when a bank seizes a property, while homeowners continue to live in it.
According to CBS, an estimated 47 percent of foreclosed homes in the country are still occupied by previous owners. In some cities such as Houston, Miami, Los Angeles and Chicago, 65 percent of foreclosed homes are still being occupied by tenants.
“Vampire foreclosures” are the opposite of “zombie foreclosures”, where homeowners abandon properties after the foreclosure process begins. Experts told CBS that at some point, even if homeowners continue to occupy foreclosed homes, banks would begin to sell the properties.
“This distressed inventory is artificially being held back so that in the short-term, it’s helping boost the home prices and the housing recovery in general,” Daren Blomquist, vice president of RealtyTrac told CBS. “But the red flag there is that eventually these homes are going to have to hit the market. They’re not going to just disappear.”
There are more than 400,000 zombie and vampire homes currently poised to hit the market, according to CBS. “You’re not talking about an overwhelming number, but as those start to be listed that will slow the pace of the recovery, particularly in home prices and particularly in markets where there’s a high concentration of these homes,” Blomquist told the network.
Maryland is currently in the top 10 in the nation when it comes to foreclosure rates. It should be noted that during a Chapter 13 bankruptcy, a person can enter into a repayment plan lasting between three to five years in order to save a home. If you have a mortgage, this can give you time to pay off your debt, as an automatic stay goes into effect that prevents a lender from taking actions against you to collect debts.
If you are facing the threat of foreclosure, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation. Our attorney can help restore your financial freedom, while giving you counsel about keeping your home.
Law Firm of Kevin D. Judd
Judd’s Judgment: In August, Maryland ranked fourth in the nation in the rate of home foreclosures.