Dead bodies rising from the ground!
No, I’m talking about Zombie Foreclosures. A Zombie Foreclosure is what happens when a bank starts the foreclosure process on a property for non-payment of the mortgage. Many homeowners panic when they receive the first notice of foreclosure. The immediately start looking for other housing. THen they move out as soon as possible. They are thinking that they will lose the house, so it’s time to move on.
But what if the foreclosure doesn’t proceed? What if the bank decides not to foreclose?
There are many reasons the bank won’t proceed with the foreclosure. Among others:
They don’t want the liability of owning a property they may not be able to sell.
It may cost more to maintain or repair the property than they would recover by selling it.
The bank may get sold and the foreclosure gets lost in the shuffle.
If the foreclosure never gets completed, the title stays in the homeowner’s name. And the homeowner gets penalized further through their credit reports. The first hit to the credit is the foreclosure itself. This is followed by reporting unpaid mortgage payments due. Then the unpaid taxes. Also liens from the township for maintaining the property.
Homeowners insurance gets cancelled for non-payment of premiums. What if a fire starts? There will be no insurance payment.
When the home is abandoned, the house quickly falls into disrepair. Storm damage, grafitti, accumulated trash. The lawn doesn’t get cut. All of this affects the other properties in the area.
So, if you are in this unfortunate situation, how do you avoid being a victim of Zombie Foreclosure? Some advice that you remain in the property until you receive the final eviction notice. Many people have remained in the property for years in similar situations. Also, if the foreclosure finally goes through, check to be sure the title has been transferred out of your name