IRVINE, Calif. (10/13/15)--Zombie foreclosures plummeted in the third quarter, both on a quarterly and year-over-year basis, according to the Irvine, Calif.-based RealtyTrac.

Zombie foreclosures are homes in the foreclosure process that have not been repossessed by the foreclosing lender (Housingwire.com Oct. 8).

In the third quarter, these types of foreclosures fell by 27%. On an annual basis they dropped by 43%.

“The overall inventory of homes in the foreclosure process has dropped 36% over the past year, so it’s not too surprising to see a similarly dramatic drop in vacant zombie foreclosures,” said Daren Blomquist, RealtyTrac vice president (Housingwire.com).

RealtyTrac also found vacant U.S. residential properties total 1.5 million, or less than 2% of all U.S. properties. Of those that are vacant, 36.5% have at least one loan open and 6.2% are seriously underwater.

“What is surprising is there are so many vacant homes where the homeowners do not appear to be in financial distress, with only 3% in foreclosure or bank owned, and only 6% that are underwater,” Blomquist added. “More than 63% of these vacant homes are not even encumbered by a loan, owned free and clear by the owner.”

This likely means that the properties are in disrepair or are located in poor neighborhoods and have simply been abandoned, Blomquist added.

The states with the highest number of zombie foreclosures were New Jersey (3,997), Florida (3,512), New York (3,365), Illinois (1,187) and Ohio (1,028).

Only six states posted annual increases in zombie foreclosures, with Massachusetts seeing the biggest rise at a 66% jump, followed by New Jersey with a 29% increase.