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Zombie Foreclosures on the Upswing
More U.S. homes fall into vacant zombie foreclosure realm in third quarter of 2020. ATTOM Data Solutions’ third quarter 2020 Vacant Property and Zombie Foreclosure Report revealed that 1,570,265 residential properties in the U.S. are vacant. That’s 1.6% of all homes. The report analyzespublicly recorded real estate data collected by ATTOM Data Solutions, including foreclosure status, equity and owner-occupancy status, matched against monthly updated vacancy data. The third quarter analysis shows that about 216,000 homes are in the process of foreclosure, with about 7,960, or 3.7%, sitting empty as so-called “zombie foreclosures.” The count of properties in the process of foreclosure (215,886) in third quarter 2020 is down 16% from the second quarter of 2020 (258,024). But the percentage of those properties that have been abandoned as zombie foreclosures is up from 3% in the second quarter of 2020. Despite the increase, the 7,961 zombie foreclosure properties continue to represent a small portion of the nation’s stock of 99.4 million residential properties—just one of every 12,500 homes. The third quarter 2020 data shows a drop in the number of homes at some point in the foreclosure process, but an increase in the level sitting vacant at a time when the federal government is trying to shield the housing market from an economic slide stemming from the coronavirus pandemic. Among the government’s key measures is a temporary prohibition against lenders foreclosing on government-backed mortgages. The ban, which is set to expire Aug. 31, 2020 and affects about 70% of U.S. homes, was enacted under the CARES Act Congress passed in March. It was later extended to help borrowers who have lost jobs or other sources of income during the pandemic. “Abandoned homes in foreclosure remain little more than a spot on the radar screen in most parts of the United States, posing few, if any, problems from neighborhood to neighborhood. But the latest numbers do throw a small potential red flag into the air, given the increase in the percentage of zombie foreclosures,” said Todd Teta, chief product officer with ATTOM Data Solutions. Highest Zombie Foreclosures Rates Owners nationwide have vacated a total of 7,961 residential properties facing possible foreclosure in third quarter 2020. That figure comprises 3.7%, or one in 27, of all properties in the foreclosure process. Those numbers are up from 3%, or one in 34, in second quarter 2020, and 3.2%, or one in 32, in third quarter 2019. States where zombie foreclosure rates exceed the national percentage are clustered in the Midwest and South (Kansas, 15%, or one in seven, properties in the foreclosure process; Missouri,11.2%, or one in nine; Georgia, 11%, or one in nine; Kentucky, 10.7%, or one in nine; and Tennessee, 10.3%, or one in 10). States where the rates fall below the national level are mainly in the Northeast and West. Those states include Utah (1.1%, or one in 87 properties in the foreclosure process), Idaho (1.2%, or one in 84), New Jersey (1.6%, or one in 62), Colorado (1.8%, or one in 56) and California (2%, or one in 50). Increases in All But One State Zombie-foreclosure rates rose from the second to the third quarter of 2020 in every state except Hawaii. Rates also decreased in the District of Columbia. States with the largest increases included Kansas (up from 7.4% to 15% of all properties in the foreclosure process), Missouri (up from 4% to 11.2%), Georgia (up from 3.9% to 11%), Kentucky (up from 3.9% to 10.7%) and Nebraska (up from 4% to 10.3%). “It appears that an increased number of vacant foreclosure properties may be an unintended consequence of the foreclosure moratoria put in place by federal, state and local governments,” said Rick Sharga, executive vice president at RealtyTrac. “Vacant properties can contribute to neighborhood blight and become safety hazards, especially during a pandemic. So, the sooner these abandoned properties can be processed and sold to homebuyers or investors, the better it will be for communities and neighborhoods across the country.” Northeast and Midwest Lead New York continues to have the highest actual number of zombie properties (2,136), followed by Florida (1,028), Illinois (971), Ohio (887) and New Jersey (356). California leads in the West, with 265. Oklahoma leads the South, with 133. Highest Ratios Despite increases in the rates of zombie foreclosures in third quarter 2020, those properties represent just one in every 12,486 residential properties of all kinds in the U.S., including those not facing possible bank takeover. States with the highest ratios are concentrated in the Northeast and Midwest, including New York (one in 1,934 properties), Illinois (one in 4,077), Ohio (one in 4,328), Florida (one in 6,747) and New Jersey (one in 7,476). States with the lowest ratios include Idaho (one in 188,805 properties), Utah (one in 98,766), Arkansas (one in 78,267), Texas (one in 70,746) and Virginia (one in 69,686). High-level Findings Based on third quarter data, the report revealed the following: Among 158 metropolitan areas with at least 100,000 residential properties in third quarter 2020, the highest zombie-foreclosure rates include Peoria, Illinois (16.4% of properties in the foreclosure process); Wichita, Kansas (15.3%); Kansas City, Missouri (13.4%); Omaha, Nebraska (12.7%); and Cleveland, Ohio (12.6%). Among major metro areas with at least 500,000 residential properties, the lowest zombie foreclosure rates are in Austin, Texas (no zombie foreclosure properties); San Francisco, California (0.7%); Philadelphia, Pennsylvania (1.6%); Los Angeles, California (1.7%) and Charlotte, North Carolina (1.8%). The top zombie-foreclosure rates in counties with at least 500 properties in foreclosure include Cuyahoga County (Cleveland), Ohio (14.1%); Broome County (Binghamton), New York (10.9%); Onondaga County (Syracuse), New York (10%); Pinellas County (Clearwater), Florida (8.5%) and Summit County (Akron), Ohio (7.8%). Among ZIP codes with at least 100 properties in foreclosure, those where the zombie foreclosure rate exceeds 5% remain concentrated in New York, Florida, Ohio and Illinois. Those ZIP codes with the top percentages include 44108, 44112 and 44105, all in Cleveland, Ohio; 61604 in Peoria, Illinois; and 13601 in Watertown, New York. The highest levels of vacant
Eastern Union Launches Small Loans Division
Eastern Union launched a new Small Loans Division. The new national division will focus primarily on multifamily deals valued at less than $1.5 million, with a minimum loan size of $150,000. The division will also arrange financing for portfolios of single-family rental or smaller multifamily properties whose combined value can reach tens of millions of dollars. Transactions handled under the Small Loans Division will include office, retail, health care, hospitality, industrial and self-storage. Heading up the new division is Sarah Steinhardt, who served as a processor and underwriter with Eastern Union since September 2019. Ben Schwartz will serve as lead broker for the new unit.
Next Generation Technology Solution for Real Estate Inspections
Using a new technology solution from ServiceLink, borrowers can complete home inspections from the comfort and safety oftheir homes. The new mobile app, EXOS Inspect, uses a patent-pending technology featuring the latest artificial intelligence and an intuitive user interface that allows homeowners to complete secure video inspections for critical aspects of the lending and servicing process. The app is designed to guide homeowners through a step-by-step process, using any compatible smartphone or tablet, to complete a video inspection of a room and highlight home improvements in less than a minute. Geo-fencing, time-stamping andAI technology ensure data accuracy. A privacy feature identifies and screens out specific visuals, such as people, most family photographs and many religious objects. EXOS Inspect can be used as a standalone app or incorporated into a lender’sexisting digital consumer experience. In addition to releasing EXOS Inspect, ServiceLink recently upgraded the EXOS Close solution, which now supports virtual closing options in all 50 states and the District of Columbia for refinance and home equity loans.
Luxury Single-Family Community Planned Near Denver
Watermark Residential has acquired 20.25 acres of land in the Castle Pines suburb of Denver for the development of The Summit Townhomes & Villas. The luxury-leased residential community will feature one- to four-bedroom attached single-family homes and townhomes. The development is expected to be completed by December 2022. The development, located along Lagae Road south of Castle Pines Parkway, will consist of 214 homes averaging 1,410 square feet. All units will feature premium interior finishes, including gourmet bar-kitchens with quartz countertops, stainless steel appliances, walk-in closets, garden tubs, full-size washers and dryers and designer light fixtures. The three- and four-bedroom townhomes will feature two-car attached garages and two-level patio decks. The paired villas will feature 10-foot ceilings, windows on three sides of the home and privately fenced patios. Community amenities will include a clubhouse, 24-hour state-of-the-art fitness center, swimming pool with cabanas and entertainment areas, pet-friendly bark park and doggie spa, local walking paths andaccess to an on-site management team. Watermark Residential is a wholly owned affiliate of Thompson Thrift and one of the nation’s leading multifamily developers. The Summit is the fourth luxury leased project for the company. The company also has projects under development in the suburbs of Denver, Phoenix and Nashville.
Planet Home Lending Partners With the Farmlink Project
National mortgage lender and servicer Planet Home Lending, LLC, has partnered with The Farmlink Project, a nonprofit grassroots movement rescuing millions of pounds of fresh produce that would otherwise go to waste. The Farmlink Project was started in mid-April by college students and recent graduates who saw a need to connect farmers with surplus crops to food banks in need. Since its start, The Farmlink Project has delivered meals to more than 10 million people. Planet Home Lending’s $15,000 contribution will fund The Farmlink Response Team: Impact Tour, a five-week, cross-country journey to identify U.S. communities most in need, deliver food, tell stories that inspire donations and raise awareness of this critical problem. The Farmlink Response Team will stop in more than a dozen cities, delivering another 1.2 million pounds of food to more than 1 million U.S families. During the Impact Tour, the Farmlink Project will film a six-episode documentary series highlighting everyday community heroes fighting food insecurity, and the episodes will be available via its social media accounts.
Waste Metering Debuts in Multifamily Housing Market
RealPage has partnered with Compology to develop the RealPage Waste Management Solution, which includes rugged dumpster cameras and artificial intelligence. It is a first for the multifamily real estate market. “Compology’s integration offering enables industry leaders, like RealPage, to flexibly and seamlessly integrate automated waste metering into their existing platforms,” said Ben Chehebar, chief product officer of Compology. “We’re excited for the positive results RealPage will deliver to the multifamily market, and we look forward to expanding waste metering’s impact in the commercial space too.” Waste metering can help property owners or managers monitor and analyze exactly how much waste each building is producing and then match collection frequency to their actual needs, mitigate overage and contamination fines and reduce annual collection costs to improve the net operating income and overall value of the property. Remote dumpster visibility also helps identify and reduce contamination in waste and recycling streams, improve diversion rates from landfills and satisfy resident demand for transparency and sustainability, which lead to higher rents and better resident retention. The RealPage and Compology collaboration helps buildings meet the requirements of GRESB reporting and government mandates while importing new waste metrics into EnergyStar’s Portfolio Manager.
