If you are facing foreclosure, it’s a good idea to not move out of your home too quickly- you could be haunted by what’s called a “zombie foreclosure.” Some homeowners quickly pack up and leave after receiving a foreclosure notice because they assume the bank will take over the property immediately. However, in some cases, the bank does not always move so fast. While the bank is finishing up the foreclosure process, the home can sit vacant for months while still in the homeowner’s name.
A zombie foreclosure can lead to devastating consequences for the homeowner. Oftentimes, these occur in low-income areas where the lender is not too anxious to assume the responsibility and upkeep of the property, along with paying the taxes. If squatters occupy the property or it falls into severe disrepair, the bank may ultimately wash its hands of the property.
Other times, the property may have been part of the robo-signing scandal and the foreclosure cannot be completed, the sale was never held, the paperwork was lost, or the title was never officially transferred into the new owner’s name. All of these circumstances result in the title remaining in the foreclosed homeowner’s name.
The states with the highest number of zombie properties include Florida, Illinois, New York and New Jersey, according to RealtyTrac. Zombie foreclosures can spell disaster for homeowners. Since the title is never transferred out of the foreclosed homeowner’s name, they are on the hook for certain debts and expenses like property taxes, HOA dues and maintenance fees for upkeep of the property. These debts can go unpaid for years, without the homeowner even knowing they have a legal obligation to pay them, further damaging their credit.
If you leave your property and the title is never transferred out of your name, the following things can happen (among others):
- The tax collector can come and collect from you back property taxes;
- The HOA may file a lawsuit to recover unpaid dues;
- You can incur fines for not complying with housing codes and ordinances;
- You can incur bills for yard maintenance, repairs, trash and graffiti removal, etc.
So how can homeowners avoid a zombie foreclosure? Remain in your home for as long as possible during a foreclosure. You will be less likely to become a victim of a zombie foreclosure if you stay through the entire foreclosure process and wait for an official notice to vacate before moving out. Confirm the title has been transferred out of your name. You can do this by going to the county recorder’s office where the property is located to make sure a new deed has been recorded. You can also check your local county recorder’s website. It is important to do this because in some cases the bank is not legally required to inform you that the foreclosure has stopped.
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.