Real Estate Data and The Rise of Zombie Foreclosures: How Banks Can Mitigate Their Risk

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According to ATTOM’s most recent vacant and zombie foreclosure report, a number of zombie foreclosures have arisen across the US in the wake of COVID, as many Americans struggle to keep up with their mortgage payments. Could a zombie apocalypse be on the horizon? Zombie apocalypses are costly for financial institutions and pose a risk to local neighborhoods.

As a financial institution, how can you stay ahead of the rise of zombie foreclosures and minimize your risk using real estate data? Read on to find out.

Impending Trouble for Financial Institutions: The Rise of Zombie Foreclosures

Zombie foreclosures have risen across America following the coronavirus outbreak, lockdown, and the subsequent economic fallout.

Coronavirus has led to record job losses – and many predict the economic impact will reach beyond the next several months. In just the first four weeks after a national emergency had been declared by the White House, over 22 million Americans had lost their jobs. As the months drag on, commentators are forecasting an impending economic downturn as hard hitting and disruptive as The Great Depression.

As such, the zombie foreclosure rate has risen, as Americans struggle to keep up with their monthly mortgage payments – an unfortunate trend that is set to continue. This also means that an impending zombie apocalypse is likely just on the horizon – highlighting the need for financial institutions to foreclose on vacant properties.

Our third-quarter 2020 Vacant Property and Zombie Foreclosure Report highlights that 1.5 million (1,570,265) residential properties sit vacant in the U.S. – accounting for 1.6% of residential property.

In addition, 216,000 homes are currently undergoing foreclosure, while 7,961 (3.7%) dwell vacant as zombie foreclosures – meaning zombie foreclosures have risen this quarter.

Why You Should Act Now to Prevent A Further Spike in Zombie Foreclosures

As a bank, zombie foreclosures are expensive to maintain – as the total cost of upkeep becomes your responsibility. Zombie foreclosures typically arise in undesirable neighborhoods with low property values, meaning the cost of following through on a foreclosure amounts to more than the financial gain from completing it.

However, leaving zombie foreclosures to fall into disarray can also damage the reputation of banks. Zombie foreclosures undermine local communities by lowering neighborhood property values and posing a hazard to those living close by – leading to resentment from neighborhood residents. Zombie foreclosures left by banks also spark anger from local governments – leading to mounting pressures on financial institutions to maintain vacant properties or continue with the foreclosure process.

Mitigating Risk with Real Estate Data

Monitoring the increase in zombie foreclosures will go a long way in helping banks to avoid expensive losses and avoid reputational damage. Real estate data can be used to help mitigate risk more effectively.

Our quarterly report, highlighting vacant properties – from state to zip code, is one example of how real estate and property data can be used to gain actionable insights into the housing market for risk management and portfolio optimization.

ATTOM’s Real Estate Data

The rise in zombie foreclosures across the U.S. this quarter points towards a potential impending zombie apocalypse – with a troublesome fall out for both homeowners and financial institutions. Real estate data can go a long way in helping you optimize your portfolio and mitigate risk.

Interested in finding out more about our real estate data and how it can help you manage risk?

Contact us here.

Please contact us if you have questions about the underlying data referenced in this article, or would like to have access to that data in the form of custom reports, API, Bulk File or DaaS.

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