By KATIE DAVIES |
“The number of foreclosed or bank-seized homes has risen by nine per cent already this year – with 1.5 million properties currently being lost by homeowners who can no longer afford them.
A realty survey found the worrying increase over the last three months compared to the same time in 2012.
The research by California-based RealtyTrac says a further 10.9 million American homeowners are at risk because they owe more than their property is worth.
Of the 1.5 million properties currently in the seizure process more than 300,000 are stuck in limbo – not yet sold on but abandoned by cash-strapped owners.
Such situations occur when a bank notifies the owner of foreclosure but fails to go through with the sale – simply because they do not think its worth their while.
If they don’t sell the property banks get insurance and tax from documenting the loss which can often earn them more than the profit made on the house sale.
According to the Christian Science Monitor , it also means they can sell on debt to debt collectors.
The house then becomes a so-called ‘zombie property’. These properties tend to fall into disrepair because absent owners remain responsible for their upkeep but have moved on and don’t realize it.
They can attract vandalism and other criminal activity, further reducing property prices in the neighborhood.
Florida was the worst state for such deserted properties with 301,874 zombies.”