According to the study, a property becomes a “zombie” when a bank files for foreclosure but does not actually take ownership for more than three years. Many homeowners are either left unaware that they still hold title to the property or have moved out of the area, under the impression that they can no longer legally live there.
The study examines the extent of the foreclosure crisis that hit Chicago from 2008 to 2012, which resulted in more than 217,035 foreclosures.
CHICAGO—A new report from Woodstock Institute estimates that there are more than 11,700 zombie properties in Cook County, including more than 5,800 in the City of Chicago. A property becomes a zombie when a mortgage servicer files for foreclosure and then does not complete the process and take ownership of the property or resolve the foreclosure by other means.
The report defines a zombie property as a property for which a foreclosure case has been filed but not resolved for more than three years. Because neither the borrower nor the servicer has clear control of the property, neither has a strong incentive to assume responsibility for the property. Zombie properties, therefore, are likely to be poorly maintained or blighted, which threatens the stability of surrounding communities.
As many as 11,700 residential properties in Cook County, including 5,800 in Chicago, have been in foreclosure for at least three years without resolution, new data show, a situation that could further deteriorate already scarred communities.
Many of those properties that seem to get stuck -- or abandoned -- in the foreclosure process are in lower-income areas where annual household income is $49,000 or less, according to a study by Woodstock Institute.