Zombie Property Survival Guide
Editor’s note: this story previously appeared in the October issue of DS News, available to read in full online.In popular movies and TV shows such as The Walking Dead, the zombie has become a go-to favorite when it comes to both monsters and metaphors. There’s something inherently terrifying about the thought of something acting solely on instinct, a thing that’s hard to kill, doesn’t feel pain, and will just keep coming. The housing industry has borrowed the zombie name to describe a persistent problem of its own, a monster born out of the previous decade’s financial crisis but still lingering—the so-called “zombie property.”During a June DS News webinar sponsored by Altisource Field Services, Timothy Meyer, SVP of Field Services, Altisource, summed up just how many challenges are involved for servicers, attorneys, and field servicers tasked with combating zombie properties, “It really is critical to have a multipronged approach to effectively manage zombie homes,” Meyer said. “A full toolbox, if you will.”
During the “Zombie Homes—Challenges and Guidance” webinar, moderator Rick Sharga, EVP, Carrington Mortgage Holdings, explained that the term was “coined during the heat of the foreclosure crisis.” He also pointed out that the real estate industry’s use of the term predated zombies’ most recent resurgence in pop culture. “We’d like to take credit as an industry for the ridiculous popularity zombies have today in entertainment media,” Sharga joked.
Sharga explained that the “zombie” nickname is tied to characteristics these empty homes share with their brain-hungry on-screen namesakes: “They’re properties that are neither one thing nor another but a little bit of both. These properties are typically somewhere in the foreclosure process. They’re vacant, having been abandoned by the borrower but are not yet under the control of the lender or servicer. They’re often the byproduct of well-meaning
but poorly executed legislation and regulations.”
In a Policy Focus Report entitled, “The Empty House Next Door: Understanding and Reducing Vacancy and Hypervacancy in the United States,” Researcher Alan Mallach analyzed U.S. Census and Postal Service data for 15 American cities, examining the increasing occurrences of “hypervacancy” in these cities, which the report defines as when at least one in five properties is vacant within a given area.