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The 'Walking Dead' Housing Recovery - Zombie Foreclosures

Tyler Durden's picture


With the mainstream media becoming increasingly worked up about the pending real-estate 'parabolic' surge and 'now is the time to buy', the reality of 'zombie foreclosures' and 'foreclosure stuffing' that we discussed six months ago continues to grow. While most prefer to ignore inventory as an issue (apart from Bob Shiller and Karl Case who have adamantly refused to 'bless' this 'exuberant' housing recovery), knowing full well that at some point these huge volumes of vacated but still 'owned' homes must come to market (once the foreclosure process picks up). The reality is that with Nevada, Kentucky, Maine, and Indiana having over 50% of homes in vacant foreclosure, there is plenty of supply to come (and with it the accompanying downward pressure on prices)...

Karl Case pours a little cold water on the ebullience of the nascent housing recovery hopers - once again due to the foreclosure and auction process...



Via Las Vegas Review Journal,

Delays in the foreclosure process are leaving thousands of Nevada homes vulnerable to vandalism and deterioration, an executive for RealtyTrac said Thursday.


Roughly half of foreclosed homes in Nevada are “zombie foreclosures,” or properties flagged as vacant or abandoned, said Daren Blomquist, vice president for the Irvine, Calif.-based online listing service.


In many cases the delinquent owner vacated the home expecting it to go to foreclosure, and may not realize the property has yet to be scheduled for trustee sale, he said.


That means the homeowner is still responsible for - but not paying - maintenance and property taxes.


Kentucky was identified as having 54 percent vacant foreclosures, followed by Indiana and Maine at 53 percent.




Rick Phillips, president of FTN Financial Main Street Advisors, said “zombie foreclosures” are definitely a material problem for Las Vegas and will put downward pressure on home prices.


He also expects to see prices decline if Nevada’s robo-signing law is revised in the Legislature.


Florida leads the nation with 90,556 owner-vacated foreclosures. Illinois is next with 31,668, followed by California with 28,821 and Ohio with 17,367. Nevada is No. 13, with 6,070 vacant foreclosures.




The inventory of U.S. homes in foreclosure rose 9 percent in the first quarter, although Nevada saw a 30 percent decrease, the foreclosure analyst said.


The annual increase in national foreclosure inventory was caused by a 59 percent jump in preforeclosure inventory, or properties that received a notice of default. Inventory of homes scheduled for foreclosure auction decreased 25 percent and the inventory of bank-owned homes decreased 3 percent.


One figure that stood out for Nevada is the 22 percent increase in “front end” inventory, or homes that have received a notice of default, Blomquist said. It’s up 22 percent from a year ago, to nearly 10,000 as of mid-March.


RealtyTrac reported a 69 percent decrease in notices of trustee sale for the first quarter in Nevada, and a 31 percent drop in back-owned homes, or actual foreclosures.


The so-called “shadow inventory” of homes that have entered the foreclosure process but have not yet been listed for sale may provide hope in markets hungry for more inventory, Blomquist said.


Many of those properties will be listed as short sales in the next six to 12 months, or they’ll go through foreclosure and eventually come on the market as bank-owned properties in the next 18 months, he said.


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Tue, 04/02/2013 - 15:27 | 3400577 HelluvaEngineer
HelluvaEngineer's picture

Make sure to check out our "Zero Down, No Intent to Pay" mortgage, starting at 1.75% APR for the first 36 months!

Tue, 04/02/2013 - 15:51 | 3400674 TeamDepends
TeamDepends's picture

Zero down?  Give us some of that "cash-back" love.  Or maybe a BMW.

Tue, 04/02/2013 - 15:55 | 3400702 CrashisOptimistic
CrashisOptimistic's picture

Behold the definitive chart for the Housing Recovery:

Tue, 04/02/2013 - 15:59 | 3400724 css1971
css1971's picture

Cool. Back to market crash levels.

Tue, 04/02/2013 - 16:33 | 3400832 Rubbish
Rubbish's picture

I will die soon so I don't need a home, I need a nurse and a daily spanking !

Tue, 04/02/2013 - 16:42 | 3400869 fourchan
fourchan's picture

10s of thousands of 3 bedroom brick homes here in detroit are going without a bid at a 10000$

ask. its rediculous, you could buy 10 solid construction 1950's houses for 100k.

Tue, 04/02/2013 - 16:52 | 3400901 augustusgloop
augustusgloop's picture

what is cramping detroit's recovery is the overhang of gov debt.  the city (and state) need to declare a jubilee and wipe the slate clean. city would be in for a renassance--hipsters / artists drawn to good architecture, entrepreneurs drawn to excellent infrastructure... 

Tue, 04/02/2013 - 17:01 | 3400927 Missiondweller
Missiondweller's picture

Not until they get rid of their union deadweight.


Tue, 04/02/2013 - 17:20 | 3400996 SnobGobbler
SnobGobbler's picture

wheeew! i thought no bid at $40k was bad (house across street sold for 32k) i still owe 130k (north of detroit)

Tue, 04/02/2013 - 17:33 | 3401031 CrashisOptimistic
CrashisOptimistic's picture


Back to the 1980s, with 30 million additional buyers at mortgage rates a fraction of what they were then.

There is no recovery.  There are only lies.

Tue, 04/02/2013 - 19:58 | 3401397 Handful of Dust
Handful of Dust's picture

I visited my brother in north central texas for Easter and we drove around.....he spotted 6 more foreclosures....Big McMansions no less. Quite a few empty houses with no 'For Sale' signs in front so who knows when they will hit the market. Lots of collapsed fences and unmowed lawns. Evidently some of these central Texas areas have become largely rental slums with absentee landlords.


Sad stuff. Used to be nice out there. The only sign I saw as "Sign of the Times."

Tue, 04/02/2013 - 15:27 | 3400579 DoChenRollingBearing
DoChenRollingBearing's picture

Yet, "they say" that real estate is coming back, prices up recently and all.  Realtors, mortgage brokers, and others in peripheral lines of work in my city.

I will stay in gold & silver.

Tue, 04/02/2013 - 15:37 | 3400611 wee-weed up
wee-weed up's picture

Yep, Obama's sycophant MSM has been trying to hype a pending real-estate surge since a few months after his inaguration. Then the folks in the real-estate business take the lie and run with it... lather, rinse, repeat... ad nauseum.

Tue, 04/02/2013 - 15:48 | 3400653 Temporalist
Temporalist's picture

Most recently I've heard of homes becoming vacant in groups (new For Sale signs without occupants) and foreclosured "residents" (who used to be called squatters I guess) waiting for the bank and sheriff to evict them ostensibly.   FL, AZ, where else?  The "money on the sidelines" has already purchased into the RE and those were/are cash buyers, asset holders and excellent credit.  With high unemployment, stagnant incomes and low savings how are people going to buy a new home unless prices decline?


I have a picture of this never ending cycle in my mind:

Sell the American Real Estate Dream

Politicians/economists say everyone deserves a home

People with poor credit are given lax loans with little due diligence to buy homes

People with no credit and no job buy homes

RE agents, banks, politicians, appraisers and assessors collude to make money off lax lending

Defaults and fraud start system collapse

People lose lots of money after bidding up RE prices

Lending dries up

The Fed sustains the bubble for "wealth effect" and starts to blow another with "liquidity measures"

Sell the American Real Estate Dream

Politicians/economists say everyone deserves a home

People with poor credit are given lax loans with little due diligence to buy homes


Tue, 04/02/2013 - 16:02 | 3400737 PlausibleDenial
PlausibleDenial's picture

For all those  new "investors" hoping to cash in on rent streams, I ask if they did the due diligence in terms of being able to increase their rents to meet growth in inflation.  This particularly true for those individuals that cannot qualify for a mortgage and still experiencing stagnant wages. Also, in terms of due diligence, I wonder how many investors understand the horrific tax hit of deprecation recapture currently @25%.  "Damn that traffic jam":)

Tue, 04/02/2013 - 16:58 | 3400921 duo
duo's picture

The only sure thing in rental real estate is property that cash flows on Section 8 vouchers, assuming that your rent won't be paid one month out of three (while you evict the deadbeat).  Prices still have to go down more.

This is the only way to play the Ponzi if you're not in banking, RE, or medicine (or WalMart).  The Fed prints money to give to people to pay rent, and you collect it.

Tue, 04/02/2013 - 20:18 | 3401407 CheapBastard
CheapBastard's picture

Sectoion 8's are penetrating everything and everywhere (not to mention the 'zero-down' crowd. My old Hood was very nice. I drove by other day to check my old house on the golf course .....a Section 8'er is living there....I bet the neighbors feel warm and fuzzy about that, esp the beaten up, purple jalopy in the driveway. "Mov'n on up!" is the new slogan along with H&C.



Tue, 04/02/2013 - 16:14 | 3400775 Croesus
Croesus's picture

@ DoChen:

Pop Quiz Time:

Which one is most likely telling the truth?

A) "Yes, it's coming back, and Happy Times are here to stay.....I sell them, so I know!". - Realtors and Stockbrokers

B) "It's FUBAR, and getting worse, so buy MOAR Phyzz".- Gold Market Commentators

C) "It's going to go to $100,000, and we'll all be rich. There's only going to be 21M of them" - The Bitcoiners


Tue, 04/02/2013 - 16:21 | 3400797 DoChenRollingBearing
DoChenRollingBearing's picture

Realtors and Stockbrokers, nice putting them into the same basket!


The answer is B.

I am too old to mess with Bitcoins, but I wish them well.

Tue, 04/02/2013 - 16:31 | 3400830 Citium
Citium's picture

@DoChen - I am a realtor in Texas and while our state never felt too much of a downside to real estate in 2008-2009 I know that this article is dead on. I only sell farm land in Texas and stay away from houses as much as I can. I do all land because atleast then I feel like I am providing possible land to sustain life after the crash. The only real estate right now I would personally buy would be a zero to low debt farmland or wooded land buy.


There seems to be a bubble building in farmland throughout most of the country selling for 10 to 20 thousand PER ACRE, which in  most states is around a 50-100% hike in less than 2 years. But here in Texas I can sell land for 2 to 3 thousand an acre or roughly about what it was bringing before the crash as land values in texas have stayed mostly uniform.

Tue, 04/02/2013 - 16:39 | 3400860 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for interesting & timely Texas land info.


I used to own a small piece of raw land in Goliad County.  It was 90% covered with Live Oak, had a pond on it, was fenced and along a paved county road.  In terms of inflation, your $2000 - $3000 / acre would be about what I paid in 1979 or so...

I guess my only observation would be that Texas is more prone to drought than the Iowas, Ohios and Missouris.

Texas...   :)

Tue, 04/02/2013 - 18:05 | 3401124 SmittyinLA
SmittyinLA's picture

I read TX has more "bullshit bond debt" than CA, specifically those bonds that roll over principal & interest for 25-30 years  

So while all the rednecks laugh at spendthrift CA you let your state get looted by Mexicans.

Shocking I know, you didn't know you had a stealth Mexican invasion financing op did ya? 

That growth aint free dude!

Tue, 04/02/2013 - 20:16 | 3401447 Panafrican Funk...
Panafrican Funktron Robot's picture

The one thing Texas does have is boatloads of gold.  I could definitely see Texas outliving the US.

Wed, 04/03/2013 - 10:30 | 3403074 Citium
Citium's picture

@SmittyinLA - I let it happen? I'm sure I let it happen as much as you let California become an oppressive, broke state... How come anytime someone mentions Texas there is a Northerner or Californian chiming in on rednecks and how bad Texas sucks? Did I say anything bad about California?

* There are a lot people leaving California and moving to Tx as more people have moved here since 2008 than moved to california during the dust bowl. Which is fine but the problem is we don't really like having you guys come in with  your liberal attitude and big government proclivities.

Also some interesting facts about Texas Economy:

1. Over the past five years, Texas has added 275% more net new jobs than all other job-adding states combined.

2. Texas would be the 15th largest economy in the world if it became it's own country again.

3. Texas is where 537,500, or 73.4%, of America's net new jobs have been created over the past five years; this figure is nearly ten times greater than the second place Louisiana (55,900, or 7.6% of America's total).

4. Texas' population grew by 11 million people (79 percent) between 1980 and 2011, more than double the rate of growth of the nation as a whole.

5. Texas accounts for only about 8% of the nation's population but 16.5% of U.S. exports.

Tue, 04/02/2013 - 20:22 | 3401459 CheapBastard
CheapBastard's picture

My uncle is a Texan. I love when he goes fishing...never catches ANYTHING under 50 pounds (he says).


Lucky guy!

Tue, 04/02/2013 - 17:07 | 3400948 californiagirl
californiagirl's picture

Back in 2006/2007, there used to be an average of 250 homes on the MLS listing in my Silicon Valley zip code.  Now, in a good month, there are 60.  Almost everyone around here is talking about a housing boom as prices are driven up through competing offers.  The County government loves it because their Property Tax revenues are climbing, and the banks can "justify" to their auditors that there is no reason to take reserves on those non-performing loans because look how high the market values of the properties are!  So, as long as the banks cooperate and keep the NPLs on their books, avoiding official foreclosures, the artificially-supply-restricted prices can keep climbing, low loan-loss reserves can be justified, governments can grow their revenues, and we can all be delusionally happy about the booming real estate recovery!

Wed, 04/03/2013 - 04:29 | 3402279 kareninca
kareninca's picture

That's exactly what I'm seeing.  Listings in Silicon Valley are way, way down.  E.g.  Redwood City: there is no inventory!  I can't believe that people there are still paying their boom-time mortgages.  They HAVE to be staying on, mortgage free.  But I don't have any hard evidence.

Tue, 04/02/2013 - 18:23 | 3401168 waterhorse
waterhorse's picture

It's a multi-headed hydra, which head do we shoot?

Tue, 04/02/2013 - 15:36 | 3400600 Lendo
Lendo's picture

Wow, not good.

I'm sure NAR and the other spin doctors say this is good news.

Tue, 04/02/2013 - 15:35 | 3400606 redpill
redpill's picture

They'll be sitting there for a long time, banks don't want to foreclose, and since they get free money from Bernanke they don't need to.

Tue, 04/02/2013 - 15:40 | 3400617 williambanzai7
williambanzai7's picture

These properties will eventually be rented to newly minted MBAs by private equity firms.

Tue, 04/02/2013 - 15:39 | 3400620 Freddie
Freddie's picture

The United States has become a zombie country being destroyed by an ineligible usurper Islamic zombie.

Tue, 04/02/2013 - 15:54 | 3400699 css1971
css1971's picture

See Japan for 20 year vision of the future.

Tue, 04/02/2013 - 16:02 | 3400738 DoChenRollingBearing
DoChenRollingBearing's picture

Worse future than that.  Take Freddie's comments AND yours for a fuller picture.

Gold, bitchez.

Tue, 04/02/2013 - 16:21 | 3400794 McMolotov
McMolotov's picture

Mother of God! Japanese Islamic Zombies?!


Tue, 04/02/2013 - 16:33 | 3400837 cossack55
cossack55's picture

Worse.   Glowing Japanese Islamic Zombies.

Tue, 04/02/2013 - 16:09 | 3400768 Joseph Jones
Joseph Jones's picture

I get your sentiment, and Obunga needs to be legally charged, convicted, and well, I won't print what I really want for fear.

But you can't really believe a guy who states USA has "unbreakable bond with Israel" and "everlasting support" for Israel (Synagogue of Satan) is a Muslim? 

Tue, 04/02/2013 - 20:20 | 3401454 Panafrican Funk...
Panafrican Funktron Robot's picture

This is actually a pretty good point.  He is probably much closer to a Satanist than anything else.  

Tue, 04/02/2013 - 17:16 | 3400983 just a dude
just a dude's picture

The United States has become a zombie country being destroyed by an ineligible usurper Islamic zombie following his orders.

Fixed it for you.

Tue, 04/02/2013 - 23:50 | 3401990 W74
W74's picture

Pretty sure it's the Nazi-onists though.  Then the blax.  Then the chicanos.  Islamics come in a distant 4th.

Wed, 04/03/2013 - 06:42 | 3402407 e-recep
e-recep's picture

"The United States has become a zombie country being destroyed by an ineligible usurper Islamic zombie."

you have been here for quite some time now and you haven't even grasped the fact that the nigger is just a frontman??

Fri, 04/05/2013 - 18:01 | 3414458 Mototard at Large
Mototard at Large's picture


Tue, 04/02/2013 - 15:39 | 3400623 NEOSERF
NEOSERF's picture

Fed has implictly licensed the banks to not mark to market anything for as long as it takes...until Fannie, Freddie are fixed, expect nothing but rosy forecasts and sales numbers.

Tue, 04/02/2013 - 19:14 | 3401298 californiagirl
californiagirl's picture

But they are "marking to market". By not foreclosing on NPLs and restricting supply so that competing offers drive prices up, they are artifically creating new market highs to justify lower reserves.  I suspect that this strategy has been planned with the full support of the FED and governments. Never mind the looming NPL inventory. 

Tue, 04/02/2013 - 15:39 | 3400626 Al Huxley
Al Huxley's picture

There are many fine properties like these available all over America, but they're going fast!  buy now, before it's too late!,MI/price;a_sort/


Tue, 04/02/2013 - 15:45 | 3400656 Al Huxley
Al Huxley's picture

...and thanks to the power of the internet, you can now tour your new neighborhood before you move in - meet the neighbors, find the local watering holes, pick out the schools for your kids.  HURRY HURRY!

Tue, 04/02/2013 - 23:48 | 3401987 W74
W74's picture

God, and to think that all those homes were once filled with beautiful White families where kids walked to school and parents felt safe letting them play freely around the block.  That was probably in an era before the schools were simply free-lunch daycare centers though.  Mein Gott, there are only mere remnants of civilization.

Tue, 04/02/2013 - 15:50 | 3400671 Devils Advocate
Devils Advocate's picture

No Doubt I live in the burbs outside the D and get to drive by these beauties!! However, with the low interest rate and the fact that anyone can get a mortgage again the suburbs here in the hot demanded markets have extremely low inventory levels and there is bidding wars for any move in ready home....I feel sorry for the people who beleive they need to rush out and buy before prices move up even higher as they are being told this by every realtor and the media...I see the beginning of the reinflated housing bubble 2.0 right before my very eyes.

Tue, 04/02/2013 - 15:51 | 3400675 Joe Davola
Joe Davola's picture

If King Jong Un would target Detroit he could wipe out about $10,000 worth of real estate in one fell swoop!

Tue, 04/02/2013 - 16:25 | 3400800 McMolotov
McMolotov's picture

Detroit is so bad the North Koreans have volunteered to donate some rice.

Tue, 04/02/2013 - 23:43 | 3401970 W74
W74's picture

Pretty sure they get free school lunches.

Tue, 04/02/2013 - 17:34 | 3401038 Floodmaster
Floodmaster's picture

a few miles from Detroit ... Average Toronto home price hits $800,000...

Tue, 04/02/2013 - 19:27 | 3401333 Almost Solvent
Almost Solvent's picture

Much closer to Buffalo . . . Toronto is

Tue, 04/02/2013 - 20:32 | 3401479 Panafrican Funk...
Panafrican Funktron Robot's picture

Ah yes, Buffalo, the home of the hot wing and a crushing alcoholism epidemic.  

Tue, 04/02/2013 - 23:41 | 3401967 W74
W74's picture


Tue, 04/02/2013 - 22:58 | 3401847 CheapBastard
CheapBastard's picture

In my area they are adding over 8,000 new boxes despite the surplus that already floods the neighborhoods. I guess they expect either 1) lots of foreigners; or 2) lots of low income renters.

Tue, 04/02/2013 - 15:40 | 3400629 Cursive
Cursive's picture

In America, you don't even need Big Brother to destroy excess capacity.  Just Big Government backstopping all of the reckless loans that the Big Banks made.  This housing inventory just rots and Jamie Dimon gets to talk about JPM's "fortress balance sheet."

Tue, 04/02/2013 - 15:39 | 3400632 denverdolomte
denverdolomte's picture

Adverse Possession is gonna be a fun one for those banks to deal with soon enough. 

Tue, 04/02/2013 - 15:43 | 3400642 Racer
Racer's picture

I have been reading some consumer forums and it seems that banks are keeping debts still open on their books when they should either be statute barred or written off through bankruptcy discharge! So they are pretending that they can still collect this money!

Tue, 04/02/2013 - 15:42 | 3400644 breakyoself
breakyoself's picture

Bernanke says bullish.

Tue, 04/02/2013 - 15:45 | 3400652 the not so migh...
the not so mighty maximiza's picture

thank god we have jobs being created.

Tue, 04/02/2013 - 15:45 | 3400655 Downtoolong
Downtoolong's picture

MSN article two days ago claimed, "The real estate market is on fire, there simply aren't enough sellers to satisfy demand". 

I'm now fully convinced that to become a member of the National Association Of Realtors you must first prove you failed a polygraph test and then swear on a bible that you passed.

Tue, 04/02/2013 - 15:55 | 3400698 Al Huxley
Al Huxley's picture

It's finishing school for bankers and politicians.  If you prove your ability to tell outrageous lies that seem impossible for anybody to swallow, and to keep a straight face while doing it, they let you move up to the next rung on the liar ladder.

Tue, 04/02/2013 - 16:00 | 3400717 CrashisOptimistic
CrashisOptimistic's picture

From my blurb above -- the definitive chart of the Housing Recovery, courtesy of the St Louis Fed


That's 1980s level, folks, with 20+ million more people in the country to buy at mortgage rates far lower than then.

This is no recovery.  This is death.

Tue, 04/02/2013 - 17:14 | 3400979 toady
toady's picture

I've seen the 'not enough seller' stories, one for NYC and one about San Jose. I just happened to be in SJ last weekend and saw hundreds, if not thousands of vacant houses.

I guess the banks who own/refuse to sell them for less than the bad mortgage don't fit in the 'not enough sellers' category.

My friend who still lives there was excited. The prices in his neighborhood were almost back to what he bought at...

Tue, 04/02/2013 - 15:46 | 3400657 Freddie
Freddie's picture

Anybody know how to go to the bank and buy a pre-foreclosure that the arsehole has been living in the house for 4+ years?   This is not a neighbor but someone I know.  The house in not in foreclosure.  SHould I contact the bank's REO dept if I can find out who has the mortgage?  I am not joking.

Tue, 04/02/2013 - 15:50 | 3400676 the not so migh...
the not so mighty maximiza's picture

You can get the list of pre forclosres/troubles mortgages from some sources.  Approaching them is the difficult part.  I actually left letters on their front dorrs.  I never got a call back though.  Could be they were really embarresed or the list I had was FUD.  Back in 2005 and 2006 you could re finance easier also. 


Tue, 04/02/2013 - 16:03 | 3400741 Cursive
Cursive's picture



Do you have access to county records.  Many of these are available free online, but you can always walk-in to the clerk's office and start browsing the system and looking through the mortgage and conveyence books.  If you know the neighbor's name, you can look up the activity.

Tue, 04/02/2013 - 16:14 | 3400762's picture

every community we buy in has the records available online.  Look up that countys Clerk of Court and they should have info about foreclosures.  They should be in some level of foreclosure, at least notified.  You can also look up the comptrollers website and find out the mortage info, but you would need the current owners participation in a Short Sale.  But be careful and have a title policy if you buy at the Court House, lots of mistakes made and important people not notified like second lien holder...then look out baby...

Tue, 04/02/2013 - 16:28 | 3400813 Freddie
Freddie's picture

This guy must be playing games with an attny.  Anyway to go to the bank or mortgage holder?  Do they just sit at the bank as zombies because the bank is hiding it off balance sheet?

Tue, 04/02/2013 - 16:54 | 3400910's picture

You need to find what "entity" holds the mortgage, however it is next to impossible to speak with them...believe me I know.  This info is under the Comptroller site you will need his full legal name.  Often the mortgage holder changes hands via an assignment.  Then you have to look up the Secretary of State for the state that "entity" was formed to find the officers and some contact info.  Then you press onto google and search the officers...then they don't call you back normally.  Even if you try to do them a favor they don't care.

Tue, 04/02/2013 - 16:18 | 3400785 Freddie
Freddie's picture

Thanks.  I generally would not get involved but the guy is a jerk off.  It is in a good neighborhood and he is not a neighbor of mine.   He has bragged about how he gets away with not paying.  The house could be flipped.  I am not a vindictive AH but this guy may deserve it.  He is so underwater and he has money.  He is just a cheap sh*t gaming the system.

Tue, 04/02/2013 - 16:22 | 3400795's picture

...soooo your telling me he's a banker then...

Tue, 04/02/2013 - 16:34 | 3400839 Freddie
Freddie's picture

LOL!  Oh he is not a blood sucker like a banker but pretty close.

Tue, 04/02/2013 - 16:33 | 3400834 Cursive
Cursive's picture


You can start with the tax records.  Ask the county tax assessor if the property taxes have been paid for that address.  If not, the county and city should have placed tax leins on the house.  Look up the mortgage records.  There should be a "notice of seizure" or some other type of notice recorded if the foreclosure process was ever started.  If the bank is sitting on it, start calling and make someone's life a daily battle with Freddie.  Good luck.  If you're like me, you'll wear their sorry ass down.

Tue, 04/02/2013 - 16:41 | 3400857 Freddie
Freddie's picture

Thanks.  I am like you.  LOL!  I will wear em down.  The guy is a jerk and the house could be a flip.  I am usually not like this but he is an a*s.

Tue, 04/02/2013 - 17:31 | 3401028 slightlyskeptical
slightlyskeptical's picture


If the bank hasn't removed him then he can stay as long as he would like. You see he is only able to do what he is doing because the bank broke the rules on the paperwork. I would assume that his secured loan is no longer secured by the home so there is nothing that anyone can do to make him leave.

I think you are better off worrying more about you than some guy who isn't even a neighbor.

Tue, 04/02/2013 - 15:57 | 3400686 css1971
css1971's picture

Shock horror, banks are reluctant to mark their assets to market value. Much dragging of feet ensues.

Tue, 04/02/2013 - 16:31 | 3400825 Bay of Pigs
Bay of Pigs's picture

What about the condition of these vacant zombie homes? The oppressive heat in Vegas literally destroys them with no air conditioning on.

Market value? LOL...

Tue, 04/02/2013 - 17:33 | 3401037 Freddie
Freddie's picture

Vegas climate is brutal.  I wonder how long those ghost cities will hold up in china.  They have cold and very hot in china. 

Tue, 04/02/2013 - 23:29 | 3401932 W74
W74's picture

Manchuria average January low is -35F (-37C) but average June high is +80.  Most of China is continental with extreme temperature fluctuations, which are not only seasonal, but could be in excess of 40° between day and night.

If it's not continental then it's monsoonal humid sub-tropical.  In areas like around Guangzhou the average June high is 104 and with the same humidity as that of Vietnam or Gangetic India.  Combine the above with the greenhouse effects of pollution and where huge expanses of dense buildup create an urban heat island and yeah, it's pretty darn horrid.

Tue, 04/02/2013 - 15:52 | 3400689's picture

A lot of houses that are still waiting to be foreclosed upon are wide open with nobody living in them. I went into one house in a very very nice neighborhood in Windermere and it was used as a grow house.  These empty houses the banks have must be an awful liability, how much does the insurance premiums cost them a year? 

Tue, 04/02/2013 - 15:56 | 3400709 css1971
css1971's picture

What if you simply moved in, changed the locks?

Tue, 04/02/2013 - 16:01 | 3400736's picture

Most need so much work that unless your homeless its no move up...and they will eventually get you evicted, however non of that stuff goes too fast especially when nobody pays attention

Tue, 04/02/2013 - 16:05 | 3400747 SKY85hawk
SKY85hawk's picture

Great idea, if you can get power & water service!

Are there still 7 year squatter equity rules?

Tue, 04/02/2013 - 16:48 | 3400884 SmittyinLA
SmittyinLA's picture

in CA its 5 years* but you have to pay the property taxes too, if however you're an insider with the assessors office tax invoices can get lost or paid without the lender even knowing it was due or paid. 

BTW the LA County Assessor is out on bail and "open" to negotiation, he's also gay too(no pun intended). 

I suspect a few years from now many lenders holding paper will learn they don't hold any title to the real estate their their paper was securing.

It's kinda like a 7/11 store with 100Trillion in the cash drawer and the clerk is on a permanent bathroom break, eventually an owner is going to show up.

Tue, 04/02/2013 - 16:22 | 3400793 Freddie
Freddie's picture

I do not like pot but this whole grow house thing is pretty fascinating.  Most of the time they try to figure out how to steal electricty because the utilities usually like for high electricity use for the cops to find them.

There were two guys in some state not long ago who build this incredible underground cave attached to a nice house with a fake wall and got away with it for quite a while by stealing electricty.

Tue, 04/02/2013 - 16:26 | 3400810's picture

as the story goes the current owner, from the Bahama's, was renting it to some people.  So they had a lease and put utiilities on, but then stoped paying and their whole "Weeds" fantasy fell apart. "little boxes on the the hillside, little boxes made of tickey tackey......"

Tue, 04/02/2013 - 16:54 | 3400906 SmittyinLA
SmittyinLA's picture

Growing is for chumps, its capital & labor intensive and you assume all the risk, the best way is to create a "non-profit" TAKE WHATEVER YOU WANT IN EXECUTIVE PAY and let chump stoners and property owners assume all the risk of law enforcement by operating a retail medical marijuana operation, you can do it all from Zug Switzerland if you want. 

Its easy, employees, suppliers and customers all just walk in the door and demand to give you cash, local & state govt too, they all get a cut but you the EXECUTIVE take the first and biggest cut. 

Tue, 04/02/2013 - 18:23 | 3401169 Al Huxley
Al Huxley's picture

You are truly in tune with the times, are you currently working in the financial sector?  Because if not, they're definitely always looking for creative people with a knack for moral relativity.

Tue, 04/02/2013 - 17:04 | 3400935 SmittyinLA
SmittyinLA's picture

how much does the insurance premiums cost them a year? 

depends, if the borrower was supposed to keep insurance but doesn't THEORETICALLY the lender hears about it, and buys coverage to cover the losses under a lender blanket policy. 

Generally speaking the lender imposed policies cost 200-300% more on account of they often hear about uninsured losses after the loss.

 "hey lender, your house burnt down, and BTW the HO policy was cancelled 2 years ago for non-payment"

yes they have insurance for that, buts its expensive and has caveats* (like not leaving properties vacant for years).

I'm guessing there's a shitload of shenanigans going on with Zombie insurance and probably lots of hidden losses, I'm sure the insurance industry is working very closely with FNM as they're major bondholders too.  

Tue, 04/02/2013 - 23:06 | 3401872 W74
W74's picture

I've had this thought in the back of my mind for almost half a decade now: would it benefit the banks if these houses burst into flames, or would they benefit from it?



How many would it take before they even noticed?

Tue, 04/02/2013 - 15:55 | 3400701 Mark Noonan
Mark Noonan's picture

Out here in Las Vegas, I see it all over town - one house around the corner has been abandoned for years; exterior walls are deteriorating, yard is completely shot...nobody does anything about it.  What I've been wondering is just what will happen when a bank finally does decide to try and unload these properties...I can't see any of them abandoned for more than 18 months needing less than $10,000.00 in repairs to make the habitable for retail sale or rental (though a family member trying to rent is finding that some investors aren't even house for rent he looked at had a dead tree lying on its side in the backyard).  Once these houses do come on, I bet their price is going to rock bottom simply because anyone buying them won't know for sure what sort of expense will be involved post sale.

Tue, 04/02/2013 - 16:08 | 3400759 ncdirtdigger
ncdirtdigger's picture

My brother had the house next door foreclosed on. It was empty, so my other brother moved in......3 years ago. A month ago some fellow comes knocking on the door and wants to inspect the place. Says he works for the bank and wants to know who is living in the house. My brother tells him 'Im living here'. The dude has a look around, says 'everything looks to be in working order' and leaves, never to be heard from again. Now my brother has been saving what would have been his rent, and has enough for a down payment.

 So there you have it, a plan for the new 'green shoots' recovery in real estate. Squatters delight!

Tue, 04/02/2013 - 16:35 | 3400845 Mark Noonan
Mark Noonan's picture

Hey, its how the West Was Won...

Tue, 04/02/2013 - 22:30 | 3401761 bait_n_switch
bait_n_switch's picture

Does he have water? Electric? Oil/gas?

Tue, 04/02/2013 - 15:57 | 3400710 vote_libertaria...
vote_libertarian_party's picture

Yahoo Finance has an article about housing is going to blast off because of the Millennials.



hahahaha  rrrrrright  


Living in moms basement, working part time at Starbucks = home buyers???

Tue, 04/02/2013 - 15:58 | 3400718 the not so migh...
the not so mighty maximiza's picture

hell yeah, bank will give them a 1 mill mortage no problem.

Tue, 04/02/2013 - 16:18 | 3400783 FieldingMellish
FieldingMellish's picture

Sub (Basement) Prime, Round 2! DING! DING!

Tue, 04/02/2013 - 16:35 | 3400843 Diogenes
Diogenes's picture

"hell yeah, bank will give them a 1 mill mortage no problem."

....Soon as they finish paying off their student loans.

Tue, 04/02/2013 - 17:00 | 3400923 GrinandBearit
GrinandBearit's picture

FYI, I'm a 40-something who lives in Mom's basement. 

I closed and liquidated all my retirement funds in 2005 and bought phyz PM's with it. 

I've never been more rich in my entire life -lol

Tue, 04/02/2013 - 16:16 | 3400782 kevinearick
kevinearick's picture

now, they are selling the liar loans to the just foreclosed upon....

see your county tax assessor, but watch out for the Statey...

have you checked out homesteading....

Tue, 04/02/2013 - 16:20 | 3400792 IridiumRebel
IridiumRebel's picture

I can't sell my house. 8 months, 10% drop in price and nothing. I'm gonna have to rent it. I'm fucked. I'll never buy another house again.

Tue, 04/02/2013 - 16:50 | 3400888 Seasmoke
Seasmoke's picture

why not sit back, take a deep breath and relax.......stop paying mortgage, property taxes , etc.... most likely some type of fraud (or 5) on your note/mortgage

you have atleast 3 , most like 5, probably 10 years , perhaps a lifetime to live there rent free

Tue, 04/02/2013 - 17:39 | 3401050 Freddie
Freddie's picture

The joke is even if the guy was in a great position - it is almost better following your path because we don't own sh*t.   The county owns your home and your job is to make sure you pay the lavish pay and pensions of the local (unionized) govt workers.   We are host and these govt workers are the parasites.

Tue, 04/02/2013 - 16:57 | 3400908 virgilcaine
virgilcaine's picture

zombie nation.. a friend who made his fortune long ago in manufacturing .. is now in the home flipping PT.  Sad state of affairs. It's now a vulture like economy just pecking at the bones for a scrap of meat.

Tue, 04/02/2013 - 17:00 | 3400925 NoWayJose
NoWayJose's picture

Big banks own a ton of these.  Big banks have been shielded from actually showing market value on all the foreclosures and underwater mortgages they hold, otherwise investor confidence would be shattered.  Bernanke's plan is to inflate housing so that all these zombie houses and bad loans turn green.  Big banks know this, and that is why they are loading up on -- none other than MOAR zombie houses!

Tue, 04/02/2013 - 17:20 | 3400997 Big Ben
Big Ben's picture

Delays in foreclosure lead to damage and vandalism and increase the ultimate loss on the loan. The only reason for a bank to delay foreclosing is because IT CAN'T. Because acknowledging the full extent of its loan losses would cause the regulators to shut the bank down.

It would really be interesting to see a chart of which banks have the highest numbers of unforclosed loans in terms of total capitalization. This would give a pretty good indication of which banks are weakest. It would be really nice to see charts for the US and for SPAIN.

Tue, 04/02/2013 - 21:51 | 3401679 BidnessMan
BidnessMan's picture

In Florida lenders don't foreclose on condos and homes, because when they do, they become liable for the past six months of unpaid condo fees and home owner association dues, and all fees and dues going forward. 

Tue, 04/02/2013 - 17:21 | 3401009 Floodmaster
Floodmaster's picture

The median price of a house in Zurich is 10 times the US. U.S houses are cheap relative to any developed country.

Tue, 04/02/2013 - 19:00 | 3401251 zipit
zipit's picture

Depends on location. Check nice houses around DC, NY, San Fran, etc.

Tue, 04/02/2013 - 18:14 | 3401151 Spaceman Spiff
Spaceman Spiff's picture

I took a short sale, foreclosure, reo class. Evidently there is a consumer protection agency to prevent prices from going too low. So the prudent who kept their savings safe get screwed again.

Tue, 04/02/2013 - 22:04 | 3401705 W74
W74's picture

Count me in that category.

Tue, 04/02/2013 - 18:44 | 3401216 Praetorian Guard
Praetorian Guard's picture

So how would you get a list of houses for a particular area that may be vacant, not up for sale, but the bank is holding on to? Would it be through a real estate agent, or the list they have, or would these homes not even appear on their list? How about county records? Thanks.

Oh, and if you found one, what would the chances be if you called the bank up and tried to negotiate? Are they even changing the deeds into their names or some BS property holdings that may not get a second glance from someone snooping around?

Tue, 04/02/2013 - 22:04 | 3401702 W74
W74's picture

They're not, I've tried.  Not one of the major banks (most in my area are BofA foreclosures) is willing to negotiate.  Those foreclosuers are NOT for sale, not at all and I have no idea why that is.

In the "old normal" those homes would be sold at a loss since every day they sit they lose value.  Homes left vacant deteriorate at 10x the rate of occupied homes.  You'd be surprized at just how important ordinary maintenence is.

Not a clue, the bank sure as hell isn't paying property taxes on the properties.  I've talked extensively with BofA people (it will take A LOT of persistence to even get a competant human on the phone), BofNY-Mellon, and Wells Fargo.  Most likely they're saving them for bulk deals for their friends.  Not one of these banks are they willing to let go, not to us ordinary folk anyway.

Tue, 04/02/2013 - 22:46 | 3401804 bait_n_switch
bait_n_switch's picture

I've heard it's because it's part of the master plan to abolish private property in the U.S.  Instead of letting people snap up these foreclosed homes – many of which are toxic because of the MERS scandal in that nobody really has the DEED to the property – they are going to spend American taxpayer money to bulldoze the properties and create "green areas"

If they destroy all these foreclosed properties, it will drive up the price of real estate, therefore making private property available to the 1% only.  It's all a part of the plan to destroy the middle class. Neo-feudalism

Oh, and with more and more people UNABLE to afford buying their own home. the government is building/will build “workforce” housing for all the worker bees to live in – right next to where they work -- We are the new China,.

Tue, 04/02/2013 - 18:53 | 3401235 GoldRetriever
GoldRetriever's picture

When "talk" (comments) turns to housing on ZH, it is almost always slanted towards "my asshole neighbor has been squatting for 4 years" etc. And while there are hundreds of thousands of "squatters" in this country - hell, maybe millions - let us not forget who really is responsible for this mess. And not forget the millions of people who tried to do the right thing and paid to stay in their home - only to have it taken from them, their finances and sometimes lives, destroyed.

I had my home of almost two decades stolen from me. I didn't "lose" it - the servicer stole it. They used an erroneous vacancy charge, forced-placed insurance and bogus fees in a classic servicer-driven foreclosure. I was current at the time foreclosure proceedings started. In fact, I had never missed a single payment. At the request of my attorney, I sent every single payment certified/return receipt after they started the foreclosure. For 10 consecutive months, the servicer returned my payment. I had five - count 'em five - sales stopped. I originally thought this was due to my tenancity and having legal representation. I now know it was only because the servicer was piling on more fees and padding their wallet before taking my home.

I can't tell you how much I sacrified during the recession to stay current on my mortgage. In the end, it did not matter. What I found even more disturbing than the actions of the servicer was how no one tasked to regulate the banks/servicers gave a damn. Not the OCC, not my state AG, not county judges, - no one  gave a damn. 2 1/2 years have come and gone since I filed a complaint with the OCC and it is still pending! It is coming up on 2 years since they stole my home and my complaint with the OCC is still pending!

So don't give me this bullshit about moral hazard, squatters and "I pay my mortgage!" If I had to do it all over again, I would squat too. There is no rule of law in this country.

Thanks to folks like "Chunga" on ZH who know who the real villians are.






Tue, 04/02/2013 - 21:57 | 3401691 W74
W74's picture

Stories like yours and mine (though not as rotten as your story) and plenty of others have made me hard and will help to make me immune to the emotional effects of violence when it comes to that.  Hell, I'm already an Iraq war veteran twice over, I'm already pretty damn immune and when it comes to taking on the real 'people' who have stabbed this country in the back and screwed over millions....well I'll have no problem doing what has to be done. 

Turning the other cheek?  Giving a damn when they shout cries of mercy?  Nay, I'll have none of that because I KNOW that if/when it comes down to it they already sit in their offices and laugh at ordinary and everyday misery, hell most of them probably brag to their coworkers and clients about how much they've gotten away with.  Be hard.  Put that mental/emotional shield up.  Give them no quarter for they have given us none.

Tue, 04/02/2013 - 22:33 | 3401764 Dre4dwolf
Dre4dwolf's picture

I am in the middle of the "good area" in brooklyn NY, there are atleast 950 Forclosures/Pre-Forclosures listed within a 2 mile radius of me, pretty much every house/coop/condo that was once listed for 800,000+ a few years ago is now in some state of foreclosure.


Honestly the only way we will have a recovery is if Chase and Other banks jump off a cliff and commit suicide.


There is no housing recovery, its a complete lie.

Wed, 04/03/2013 - 01:53 | 3402164 dunenfool
dunenfool's picture

Read all the comments here.  I live in Sf bay area, 94070, I am a remodel contractor going on 25 years.  There  is a housing price surge here and an elevated interest in buying due to two things in my area that was not there just one year ago.  One is lack of supply.  Houses used to change hands out here on a regular basis, our usual inventory was 80 -90 homes avail at any time except the hollidays.  We are lucky if 10 or 15 are avail now at any one time.  nov to feb inventory was almost 0, many homes were selling off market,  I work on these homes so I know how they got them.  The realtors have their buyers lined up, know what they want, convince the sellers that their buyer is willing to go way beyond market value, easy peasy sign some papers, done.  Half the time the neighbors didn't even know.  Two,  the tech industry is just full of the benny bucks and they are giving them away in shopping carts to their employees.  I have never seen so many first time buyers in the 1.3 and up range.  Bidding is intense to say the least.  These people do not appreciate the value of this money, it comes way too easy.  1950's Homes are going for 2-400k over asking, as is, 30 day close for the junkiest poorly maintained homes our area has to offer.  What is just crazy is that 6 months ago good homes would just sit on the market with no offers until the 3rd price reduction, usually picked up by a flipper.  Then like a light switch, magic everything changed.  What I cant figure out is why all the people who are now getting a second chance to get out while the getting is good dont put their homes on the market.  We have tons of retirees in our area, granted their prop taxes are like pocket change compared to the rest of us, but why dont they sell, and buy an equivalent home almost anywhere in the country for 1/10th the price. 

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