This page was written, edited, reviewed & approved by Emil J. Fleysher following our comprehensive editorial guidelines. Emil J. Fleysher, the Founding Partner, has 15+ years of legal experience as a bankruptcy attorney. Our last modified date shows when this page was last reviewed.
Your home has been in foreclosure, possibly for years. And, the bank has finally set a sale date so you move out. You and your family are starting over in a new home. Moreover, you no longer think of your old home that the bank sold. That is, until years later when a debt collector calls to tell you that you owe thousands in new debt from the home. That is what happened to Rose Nathan and countless others. Known as zombie foreclosures, the owners move out believing they are through with the property. However, the bank delays or cancels the sale or never transfers the deed.
Often banks are in no rush to reclaim the deed to properties; in order to delay becoming responsible for the property’s expenses, including taxes and other fees such as homeowners’ association dues. Almost two million properties have started but have not completed the foreclosure process in the past seven years, according to RealtyTrac. There is no way to know exactly how many of these are zombie foreclosures. However, it’s estimated that there could be tens of thousands.
Properties in low-income communities are often more at risk because the bank knows those homes are harder to sell. It delays the transfer to save itself money at the cost of the homeowners. Often the owners only find out years later that they still hold legal title when a debt collector calls. Or, they discover the hit their credit has taken due to the large amount of debt accumulated by their property. Even borrowers that filed for Bankruptcy thinking that they had surrendered these properties are being affected.
A $25 billion settlement last year with the state attorneys general resulted in the nation’s five largest mortgage lenders agreeing to inform borrowers of any decision to forgo or delay a foreclosure sale. But, they are often not following the policy. For people who just went through a foreclosure, more unpaid debt, especially the amounts that a home can accumulate over years, is enough to damage their credit; to the point where it is unusable or extremely expensive. This makes moving on from a tough situation even more challenging. That is because they will not be able to get a new mortgage and will have trouble renting a home with very low credit.
If you have questions about foreclosure, loan modification, bankruptcy, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.
Emil specializes in consumer bankruptcy, debt settlement, and mortgage modification, offering a holistic approach to solving mortgage and debt problems. Emil listens to clients, understands their circumstances and goals, and helps them make the right choices by presenting all options and contingencies.
He is dedicated to helping South Floridians regain their financial freedom from overwhelming debt caused by high interest credit cards, bad mortgage loans, and uninsured medical expenses.
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