(BREAKING NEWS/OP-ED) — News and information contained in this post are provided by the author with opinions as to cause and effect and in no way, should any of this be construed as legal advice.
Nearly 1.3-million properties make up the shadow inventory to date across the nation, also known as “zombie foreclosures” … homes that sit vacant. That’s 1.3% (1 in 79 homes) according to the latest figures listed by ATTOM Data of San Diego.
The number of foreclosures in process in the U.S. this year (just the 1st quarter thus far) number 298,533, which is up 5% from the fourth quarter of last year. These numbers continue to increase since the coronavirus moratorium was lifted in mid-2021. Of those homes, 8,141 were zombie foreclosures (properties immediately abandoned by homeowners as soon as they were served with notice).
What’s worse is we still have a housing crisis (the lack of affordable housing). A lot of this is due to the lack of current inventory, which drives the price of each home up in the face of demand. Come spring, that may change as the smart homeowners seek to downsize or reinvent themselves into survival mode.
Why are these homes in “zombie mode”?
The only thing this author can gather regarding the “why” is that the properties are difficult to sell because of issues with the chain of title. A lot of these properties were securitized, which means that the chains of title to each is jacked up and what the zombie homeowner probably didn’t realize, is that he probably wasn’t in default when he vacated the residence; however, because he agreed to live in the residence and not abandon it, when he bolted, the contract was voided. Abandonment makes it so easy for mortgage loan servicers to steal the property.
Statistics vary as to what counties across America have the worst performance in zombie properties.
A Nation of Renters?
23.7-million properties in the U.S. are investor-owned. In the first quarter of 2023, 846,000 of this inventory was vacant, with Indiana, Oklahoma, Alabama, Kansas and Ohio ranking in the top five of those vacancies.
The “banks” (through their servicers) took 13,700 properties in foreclosure and 13% of them are still vacant.
None of this explains why investor groups are buying up these properties to rent, other than they don’t have to address title issues while they make bank on them. And to think that title companies paid these REMIC servicers & sponsor-sellers 73% of the mortgage loan’s insured value on each of them, not including swap counterparty payments and default insurance payments.
The shocking truth about securitization is that a $500,000 mortgage loan will net the parties in the securitization chain $7,000,000 per mortgage! This is why the banks were so eager to get the Glass-Steagall Act repealed and Slick Willie was so eager to sign the Gramm-Leach-Bliley Act into law.
You can thank our Congress … the best bankster money can buy … for all of what happened in 2008.
Now we’re facing a repeat performance; however, not as bad as what happened in 2008.
Listen to Dave Krieger on ThePowerHour.com, weekday mornings from 7 – 9 a.m. Central Time.
Clouded Titles Blog 