Regular foreclosures are haunting enough, but now there are some speculations that “vampire” foreclosures may bite us in the future. A Vampire foreclosure is a term coined by RealtyTrac to identify homes that have been seized by the bank but still have the original owners inhabiting them.
At this time, it is estimated that approximately 47 percent of the foreclosed homes fall into this category. The banks are hoping to boost home values by temporarily keeping these homes off the market, a tactic devised for the short-term. Eventually these homes will have to be put on the market.
Banks will be forced to put all of these homes for sale, and that could mean that there will be an overly saturated real estate market. This will be a problem particularly, in some of the major cities like Miami, where the percentage of vampire foreclosures accounts for up to 65 percent of foreclosures.
Vampire foreclosures result when the bank gives the existing homeowner a set amount of time to vacate the property. In such instances it seems that the problem is somewhat contained because the property will go through the entire cycle and will be listed for sale within a set amount of time. There are other situations where the bank is allowing the original owners to stay on the property to simply avoid maintenance costs.
While allowing homeowners to stay in their home appears helpful the long-term effects have the potential to be very harmful for the economic recovery.
If you have been served with a foreclosure suit, we urge your to schedule a no-obligation consultation with our lawyers at Graham Legal. We will help answer questions and get you the end result you are looking for in your foreclosure case.