"Zombie Foreclosures" A Bad Nightmare or the New Reality?
A recent phenomenon and fallout of the foreclosure crisis is a mounting problem called "zombie foreclosures". This is when the bank decides not to complete a foreclosure process, but also doesn't release the lien on the property. A zombie Foreclosure in essence, leaves a home perpetual limbo. Until the home is foreclosed it is still the legal responsibility of the homeowner. Until the home is foreclosed the borrower's credit continues to deteriorate each month. According to RealtyTrac, over 10 million homes have fallen into foreclosure since 2006. Over 2 million of the 10 million homes in the foreclosure process have never come out of foreclosure; that is a surprising 20% of foreclosed homes in limbo! When the banks decide it isn't worth it to complete the foreclosure, the homeowner is still legally on the hook and personally responsible for the house. The unfortunate thing is that many homeowners do not realize that the foreclosure wasn't completed. The bank is not legally required to notify the homeowner if they back out of the foreclosure process. Many homeowners are surprised and confused when they receive notices from their municipality for code violations (not mowing the lawn) or for not maintaining the property, given a notice of past-due property taxes or worse, pursued by debt collectors that their mortgage company unleashed to pursue the mortgage debt - likely swollen with penalties, interest and fees. Most people find themselves in a zombie foreclosures when they vacates their property due to an imminent foreclosure sale only to find out afterwards that the sale had not occurred. The homeowners assume they are off the hook with the property only to find out later that this is not the case. It can be a frustrating and potentially devastating realization. If a home becomes vandalized because the homeowner has abandoned the property (mistakenly believing the home has been foreclosed on), the homeowner is liable to the bank for the damage that has occurred. So what can you do to protect yourself? The attorneys of Acclaim Legal Services have found creative solutions to mitigate the adverse implications of this phenomenon. We have found legal avenues to compel mortgage creditors to release their lien interest or force them to complete the foreclosure proceeding in order to allow clients to sell or donate their home. Please call us for a free consultation today at 866-261-8282. Our attorneys offer legal debt resolution to begin the credit restoration process and restore financial peace of mind.