DS News

52 C O V E R S T O R Y / D A V I D W H A R T O N 52 Even as the housing market booms, vacant and abandoned "zombie properties" continue to plague many municipalities, lingering reminders of the housing crisis. Here's how the industry and communities around the nation are working together to take down the zombies. In popular movies and TV shows such as e Walking Dead, the zombie has become a go-to favorite when it comes to both monsters and metaphors. ere's something inherently terrifying about the thought of something acting solely on pure instinct, a thing that's hard to kill, doesn't feel pain, and will just keep coming. e 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: "ey're properties that are neither one thing nor another but a little bit of both. ese properties are typically somewhere in the foreclosure process. ey're vacant, having been abandoned by the borrower but are not yet under the control of the lender or ser- vicer. ey're often the byproduct of well-meaning but poorly executed legislation and regulations." In a Policy Focus Report entitled, "e 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. Mallach also spotlighted increases in the number of properties that have been "effectively abandoned"—unused, empty properties that are neither for sale nor for rent. According to the report, the number of units that are effectively abandoned has increased nationally from 3.7 million in 2005 to 5.8 million in 2016. at was an uptick of 2.1 million units—" roughly equal to five times the entire housing stock of San Francisco."

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