|LLOYD MARTIN PLC
|LLOYD MARTIN PLC
9316-A Old Keene Mill Road
Burke, Virginia 22015-4285
|[A Virginia Professional Limited Liability Company]
January 8, 2018
Zombie Homes: The Problem That Just Won’t Die
By David Wharton, Housing Wire -- The issue of so-called “zombie homes” is a problem for any major city. “Zombie homes” is a
colorful name for an old problem, and one that continues to be widespread as the nation gains more distance from the housing crisis
and the Great Recession. Zombie homes are created when the foreclosure process begins, the homeowner moves out, but then the
foreclosure is canceled for one reason or another, leaving the home unoccupied—and often falling into disrepair. The issue—and
misunderstandings surrounded it—is highlighted in a new story about how Portland, Oregon, is tackling the problem.
The Portland Tribune reported recently that Portland Mayor Ted Wheeler has reversed a policy put in place by his predecessor that
was designed to crack down on zombie homes, threatening foreclosure on the properties in order either to force landlords to attend
to the homes’ upkeep or get them into different hands. However, while former Mayor Charlie Hales pushed the Portland City Council
to crack down on zombie properties, Wheeler considers the problem less of a priority.
Wheeler told the Tribune, "The obstacles for government to take away someone's property are formidable. It's a very expensive, multi-
year process. I'm not sure that's the best use of our resources."
Of course, the problem with typical zombie properties is that there isn’t anyone in the house to be forced out. With the properties
trapped in something like limbo, it’s hard to find a good solution for any of the parties involved, from the bank or mortgage company
left holding the property, to the city governments tasked with fighting urban blight. As evidenced in Portland, even when one party
comes up with a plan to address the issue, that plan can crumble in the wake of budget cuts or political change.
Would Hales' plan have worked in the longer term? According to the Tribune, Portland only used the threat of foreclosure to force
landlords to take care of their derelict properties in 10 cases during the previous 18 months. Of those 10 properties, the Tribune
reports that “Landlords for eight of them paid off the liens before the auctions were set. The ninth was paid off just before the auction.
The 10th was paid off after it failed to sell at the first auction but before the second auction was held.”
With Wheeler reversing course on Hales’ policy, the city is now effectively back where it was before that policy was put in place ... and
the city's zombie homes still remain.
Several American cities have been trying to fast-track foreclosures in recent years as a means of combating blight and zombie
properties. Fast-track foreclosure laws are already on the books in Ohio and Maryland, with states such as Illinois, Pennsylvania, and
New York possibly following suit. Some municipalities are also trying to combat the individual symptoms of blight, such as in the case
of Ohio’s banning of the use of plywood on vacant properties. In November 2016, Fannie Mae announced it would allow mortgage
servicers to use clearboarding on vacant homes in pre-foreclosure, striking another blow against one of the tell-tale visual signs of
zombie homes and urban blight.
In part three of a three-part series earlier this year, Robert Klein, Founder and Chairman of Safeguard Properties and SecureView,
told DS News, "It’s all about keeping people in their homes as long as possible, but, once abandoned, a house becomes a liability.
Fast-tracking enables the mortgage servicer to get possession of the property before it deteriorates. This directly leads to on-time
conveyance and faster rehab and sale.”
Fast-tracking foreclosures—or even threatening to do so—can be one effective way to combat the zombie home plague, but
evidenced by Portland’s problems, it isn’t always a politically popular approach.
January 3, 2018
By Kelsey Ramírez, Housing Wire
Minutes released Wednesday by the Federal Reserve showed that the Federal Open Markets Committee could move at a quicker
pace due to tax reform.
Just before Christmas, President Donald Trump signed the tax reform bill into law which some economist predict could spur economic
growth over the next few years.
While the Fed forecasts a median growth of 2.5% in 2018, the minutes showed most members will raise their expectations due to tax
reform, according to an article by Akin Ayedele for Business Insider.
From the article:
to spend is still uncertain for the Fed. On the corporate side, business owners who were surveyed said some companies would
use the extra cash to expand their businesses, but most would likely use it to pay down debt or buy back their stock.
The Fed announced its final rate hike of 2017 on Wednesday at the end of its December FOMC meeting, but implied more rate hikes
are still to come in 2018 and beyond. After increasing the federal funds rate 25 basis points to a target rate of 1.25% to 1.5%, the
Fed projected it would raise rates three times in 2018.
However, experts then predicted the Fed will later revise its rate hike forecast from three times in 2018 to four after they increased
their GDP estimates.
One expert confirmed he continues to expect the Fed to increase its forecast for rate hikes in 2018.
“Overall, Fed officials re-affirmed at this meeting that they anticipate raising interest rates three times in 2018, matching the tightening
in 2017, but we still anticipate that a slightly faster than expected rebound in core inflation will mean we eventually see four rate hikes
in 2018,” Capital Economics Chief Economist Paul Ashworth said.