Bank "Zombie Foreclosures" Loot Homeowners, Cities, States
April 25, 2013 • 9:11AM

The American Banker reported on April 23 that banks are simply walking away from hundreds of thousands of vacant properties from which they have driven out the homeowners by filing foreclosure proceedings, only to then refuse to complete the foreclosure process, because they do not want to pay the costs of maintaining homes which they cannot sell without taking a loss.

RealtyTrac, the leading foreclosure listing company in the U.S., calls these "zombie foreclosures," and estimates that nearly 35% — more than 300,000 of the roughly one million homes in foreclosure process — are vacant, but the servicer has not taken title to the home. Many times the once-homeowner is not even informed that the servicer didn't assume responsibility for their repossessed home until he or she gets a bill from the city for liens, upkeep, and taxes, or the servicer starts trying to collect the mortgage.

This brazen policy is not only artificially propping up housing prices, by keeping properties off the market, but its result is nothing less than genocide and depopulation. It leaves the owners responsible for unpaid debt, taxes, and repairs, withholding significant tax revenues from towns, cities, and states. Entire blocks of some cities have been abandoned by this policy, left to be occupied as drug dens or to collapse into rubble.

Similar policies of deliberate creation of millions of homeless, while pumping up yet another real estate bubble, are known to be underway in Spain and Mexico, and are undoubtedly occurring in many more countries than have yet reported it.