In US, 'Vampire' Home Inventory Hiding in Shadows

---

Tens of thousands of bank-owned homes still occupied by the previous owners threaten the housing recovery in the U.S., RealtyTrac says in a new report.

Dubbed "Vampire REOs," these occupied foreclosures represent more than 47 percent of all bank-owned homes, the firm reports.

"On the surface these properties often will look like normal, non-distressed homes," the report says. "But beneath the surface they represent a shadow inventory that is becoming more imminent as rising home prices motivate banks to sell off these homes to try to recoup their losses on soured loans."

Vampire REOs are most prevalent in Miami, where 64 percent of the 38,800 REO homes are still occupied by the previous owners. In Phoenix, 46 percent of the REO homes are still occupied, while 45 percent are still in their homes in Chicago.

"Zombie REOs" - homes that are in the foreclosure but abandoned by their owners - represent 20 percent of the foreclosure inventory, the firm says.

"Often these homes are more obviously distressed, falling into disrepair with no one to perform regular maintenance and upkeep," RealtyTrac said. "As such, they often represent a threat to the quality of the surrounding neighborhood, dragging down home values."

The Zombie inventory fluctuates from the city to city - in St. Louis 34 percent of the foreclosed property has been abandoned; in Miami only 16 percent of the foreclosed homes are empty.

While RealtyTrac characterizes these "two monsters" as a threat to the housing recovery, they also represent an opportunity.

"These threats to the housing market can be bargain opportunities for pro-active buyers and investors," the firm said. "Zombie foreclosures represent a prime opportunity for a short sale that helps the homeowner, the neighborhood and even the hesitant-to-foreclose bank in the process; while vampire bank-owned homes represent imminent inventory that you can act on before other buyers and investors are aware of it."