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Report: 22% of Charlotte foreclosures not occupied by owners

The Charlotte metro area has a larger percentage of vacant homes going through foreclosure compared with the national average, according to a report released Thursday.

While 20 percent of pending foreclosures nationwide have been abandoned by their owners before the foreclosure process has been finished, the figure is 22 percent, or nearly 1,150 homes, in the Charlotte region, according to the report by Irvine, Calif.-based RealtyTrac.

Of 831 U.S. metropolitan areas, the Charlotte region is 30th for the number of foreclosures not occupied by their owners.

The region has 5,272 homes going through foreclosure. Of those, 1,146 no longer have their owners living in them.

Such homes are sometimes referred to as zombie foreclosures. It means the homeowner has given up on the property and is less likely to invest in maintenance, but the bank hasn’t repossessed it yet.

Daren Blomquist, RealtyTrac vice president, said in an interview that empty Charlotte homes are bad news for the people who live around them.

“If you’re a homeowner, these vacant properties, if they’re sitting in your neighborhood, are not a good thing for your home value or the neighborhood quality,” Blomquist said.

“The homeowner’s left. They’re not taking care of it,” he said. “The bank has not taken back the property, so they’re not responsible for it. That is often an eyesore in the neighborhood.”

Nationwide, 167,680 homes have been vacated by their owners. States hit hard when the real estate bubble popped are among those with the most properties whose owners have walked away.

Florida, with 55,503, is No. 1 for such vacancies. South Carolina, with 4,155, is No. 9. North Carolina, with 1,980, is 19th.

Blomquist said the long process to complete foreclosures is the primary reason people are fleeing their properties. The length is “a byproduct of efforts to mitigate the impact of the bursting housing bubble and foreclosures,” he said.

“You have foreclosures dragging on for over a year in many cases, sometimes two years in some states,” he said. “That ends up resulting in a situation where many homeowners just decide to walk away. They’re ready to move on with their lives.”

The length varies by state, but on average it takes 477 days nationwide for a foreclosure to finish, from the time when a homeowner receives a notice of default until the lender takes back the property, he said.

In North Carolina, the average is 315 days.

“It’s actually below the national average, which is a good sign,” Blomquist said.

Around the first quarter of 2007, before the recession, 120 days was the average nationwide, he said.

The average in South Carolina is 432 days. New York takes the longest: 1,049 days.

Yuriy Vaynshteyn, owner of Carolinas Metro Realty, which helps banks manage properties they foreclose on, said one reason people flee their homes is they misunderstand a letter from the lender telling them that they are in default.

“They interpret it as they’re being evicted from the house,” he said. “They just pick everything up and leave.”

Also, he said, some homeowners stop making repairs once the foreclosure process begins and then move out after it becomes uninhabitable.

The RealtyTrac report also shows the number of vacant foreclosure properties in the Charlotte area is larger than metro areas that are, in some cases, twice its size.

Houston, a metro area that has 5.9 million residents according to 2010 census data, has 1,044 homes that are going through foreclosure with no owner living in them, or 25 percent of the total homes in foreclosure there.

In the San Francisco metro area, which has 4.3 million residents, there are 789 foreclosures, or 11 percent, not occupied by their owners.

Some real estate observers attribute higher foreclosure activity in the Charlotte area to it taking longer to slip into the housing crisis compared with the rest of the nation.

Roberts: 704-358-5248; Twitter: @DeonERoberts
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