Disclaimer: This content may include information about products, features, and/or services that The Federal Savings Bank does not provide and is intended to be educational in nature.
Zombies could be creeping through your neighborhood, hiding in plain sight. You might have already seen them. Cracked paint, unruly vegetation, a once bustling home left empty. These zombies don’t bite, but they are, nonetheless, not very easy on the eyes. It won’t take much to outrun them…because they’re houses.
If you’ve noticed a home in your neighborhood that seems to have been abandoned, yet hasn’t made its way to the market, you may be in the presence of a zombie foreclosure.
Don’t panic! These homes aren’t as scary as their name, but they can impact your neighborhood, and the original homeowner, in a few different ways. In this article, we’ll explain what a zombie foreclosure is and some of the potential effects of their presence in your area.
What are Zombie Foreclosures?
Zombie foreclosures usually happen after a homeowner defaults on their mortgage. Typically, they will receive notice from their lender that they’ve defaulted, and for one reason or another, they believe they must vacate the property. So, the homeowner leaves before the home is actually foreclosed upon, often not realizing that they are not required to do so just yet.
In reality, the homeowner may have abandoned the home, but their problems haven’t gone anywhere. If the home has not been officially foreclosed upon, they are still responsible for their mortgage, homeowners’ association (HOA) fees, property taxes, and other associated costs of homeownership. This is because in all likelihood, they are still the titleholder of that home.
To complicate matters further, the lender might decide it wouldn’t be prudent to finalize the foreclosure for any number of reasons. Most likely, they decided it wouldn’t be worth taking on the costs of repairs, back taxes, or other fees.
How Common are Zombie Foreclosures?
Zombie foreclosures are, at the time of writing, pretty rare in the United States. According to a report by the company ATTOM™, as of August 2025, there were 222,318 properties that were in the foreclosure process in the U.S., and of those, only 3.38% (7,519) were considered zombie homes.1
That was a slight increase from the same time in 2024, which had a 3.14% rate. The same report notes that, according to their findings, investor-owned properties were more likely to end up as zombie foreclosures. Additionally, they found that large metro areas usually have lower rates of zombie properties compared to national averages.
Still, while zombie foreclosures aren’t contagious like the zombie apocalypse of your favorite scary movies, they are worth understanding, as they can carry some consequences.
Impact of Zombie Foreclosures
These vacant properties can cause problems long after they’ve been abandoned. Both the homeowner and the rest of the community can experience some negative impacts from zombie foreclosures.
For the Homeowners
A zombie property is much like a zombie in that even though you thought it was dead, it can still cause plenty of problems. Remember, in this scenario, the homeowner still owns the home, and as stated above, they are still likely on the hook for:
- Unpaid property taxes
- HOA fees if they were in an HOA
- Maintenance, trash, and other utilities and services
- Potential fines related to zoning violations
Failure to address these things can potentially lead to tax liens and lawsuits. Meanwhile, the homeowner’s credit score could be severely damaged due to the loan default. So, abandoning the home could ironically deepen the financial burdens associated with it.
This is why it is very important that homeowners do not simply leave upon receiving a notice of default from their lender. Remember, foreclosure is a legal process, and it is in your best interest to be present and communicative throughout it.
There are some avenues to get out of foreclosure, and you might find that your lender can work with you on those options. However, if a foreclosure is inevitable, do not move out of your house until you have been given an official notice to vacate.
This way, you will know for certain that the title is no longer in your name. You can also confirm whether you are the title holder with your county recorder’s office.
For Communities
Communities can also experience problems related to zombie properties. These homes often fall into a state of disrepair, and they can attach a negative impression to the surrounding neighborhood. Vacant homes sometimes even affect property values in the neighborhood.
Sometimes zombie properties can attract investors who want to flip and sell the home, but as mentioned above, investor-owned properties can be more likely to end up as zombie homes.
Also, occasionally, vacant homes might draw squatters, thieves, or vandals, which can impact the perceived safety of the neighborhood.
Not Just a Scary Story
Zombie foreclosures can be a serious issue for the homeowner and their community. While they are somewhat rare, it’s worth acknowledging. If you suspect your home may fall into foreclosure, you should understand that it is generally not in your best interest to move out before receiving a notice to vacate. Stay in contact with your lender throughout the process to ensure your home doesn’t turn into a zombie.
This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.
