When people hear about zombies, they think about former living beings, not inanimate objects. Perhaps after the latest trends in foreclosure procedures, some new novels and movies will arise addressing that gross oversight in inorganic zombie objects.
There is a new disturbing trend arising in some foreclosure cases. It has been termed the zombie title and it is wreaking havoc on individuals, banks, and municipalities alike. The name was derived by the fact that the homeowner’s title, which they assumed they no longer possessed due to the foreclosure, rises back up and continues to hold that homeowner legally liable for the property due to the bank abandoning the foreclosure.
Banks abandon such foreclosures because they do not see the value in continuing with the process due to it’s not being worth their time, money, and effort. However, the homeowner, who by this time has vacated the property, is often times not notified of the abandonment by the bank and doesn’t find out about it until liens are brought against their property, wages are garnished, tax refunds are seized, and their credit history destroyed.
Regulations often don’t require banks to inform homeowners of the abandoned foreclosure, so they often times do not. This can lead to the homeowner accumulating unknown debt due to fines and fees associated with the now abandoned property and their unknown legal liabilities. Often, the maintenance, cleaning, and securing of these forgotten properties are left up to local municipalities to deal with, much to their chagrin.
These zombie properties do not only pose financial risk for all homeowners discovering that they exist and now may bankrupt them, but also a financial and physical risk to the cities in which they reside. The city must put funding into dealing with the properties, and if completely forgotten about, sometimes houses like these have been known to explode due to the gas being left on.
If you need help with dealing with banks and the foreclosure process, please contact a bankruptcy lawyer who practices in that area. They will be able to assist in ensuring that your foreclosure doesn’t become a zombie title dispute that eats away at you for years to come.
Source: Reuters, “Special Report: The latest foreclosure horror: the zombie title,” Michelle Conlin, Jan. 11, 2013