Why You Should Avoid a Zombie Foreclosure

ATTOM recently released their “Vacant Property and Zombie Foreclosure Report for Q2,” which showed that 1.3 million residential properties throughout the country are vacant. To put that in perspective, that represents 1.3 percent of all homes in the United States, with one in 76 homes sitting empty. If you are facing foreclosure, it is important that you speak to a Florida foreclosure defense lawyer before packing up and leaving your home. You likely have many more options than you think. Below, our seasoned attorney explains why you should avoid a zombie foreclosure.

What are Zombie Foreclosures?

When a homeowner abandons their property after receiving notice of a foreclosure, but the lender never completes the foreclosure process, that is considered a zombie foreclosure. It is natural for homeowners to want to walk away from a property they cannot afford, but the consequences of doing so are significant.

Regardless of what happens before a court gives a lender permission to foreclose on your property, your name will still be on the title. That means you still legally own the property and are still legally responsible for it. If you hold the title to a zombie property, you have what is known as a zombie title.

Since you will still hold the title of the property, you are still financially responsible for it until the foreclosure process is finalized. If the lender never forecloses on your home, it will never be sold and you will remain responsible for any property taxes, maintenance, and other financial issues that may come up.

Why Do Lenders Abandon Foreclosures?

There are many reasons why lenders start the foreclosure process only to eventually abandon it. The lender may have decided that the repairs and upkeep are too costly, or there may be too many back taxes owed on the property. Lenders sometimes find it difficult to sell a foreclosure property and they may not think a sale would provide enough funds to cover the debt owed. Generally speaking, if lenders simply think a foreclosure will not be worthwhile for them, they will stop the process.

If your lender has notified they are going to foreclose on your home, it is important to know this can happen to you. The pre-foreclosure proceedings do not necessarily mean your lender will complete the process. Until you receive a court order, you are still responsible for paying the mortgage.

Your Lender Does Not Have to Notify You the Foreclosure Stopped

You may think that because you have not heard from your lender that they are abandoning the foreclosure, they intend to move forward with the process. This is not always true, though. Lenders do not have a legal obligation to tell you that they are not going through with the foreclosure, or that you are still legally responsible for the home. Even if your lender tries to contact you to inform you of the status update in the case, they may not be able to reach you if you have left the home quickly.

A Zombie Foreclosure Can Haunt You for a Long Time

When you are still named on the title of the home, you are responsible for paying taxes, dues, fees, and fines.

First, you are still responsible for any property taxes owed on the home. Over time, these property taxes can build up and if you do not pay them, the city can sue you for them. To determine if you owe property taxes, you should check your tax documents or contact the assessor’s office in your county.

If your home is controlled by a homeowner association (HOA), you are likely also responsible for paying HOA dues. You are still responsible for paying these dues even if you leave the property but the title is still in your name. If you do not pay the dues, the HOA can file a lawsuit against you to recover unpaid assessments.

Second mortgage foreclosures often fall into disrepair because there is no one looking after the property and caring for it anymore. This can become an eyesore, and one that your municipal government may not look kindly on.

Realizing that the property has been abandoned, they may pay the cost of garbage removal, repairs, yard maintenance, and more. The municipality is not going to be willing to pay for these costs and so, they will bill you for them. They may also fine you if the property is not in compliance with zoning laws, housing codes, or municipal ordinances. Just like any other expenses associated with the home, you are responsible for these fines if your name is still on the title.

A Zombie Foreclosure Can Hurt Your Credit

Any time a due, fine, or fee goes unpaid, it will end up on your credit report. If your credit score undergoes a significant reduction, it can make it even more challenging to obtain credit or a loan in the future, at a time when you really need it. Although you will not be able to purchase a new home for many years after a foreclosure, this also holds true with zombie foreclosures.

Zombie Foreclosures Hurt Neighborhoods

When a neighborhood contains a zombie foreclosure property, it can bring down the value of the rest of the homes in the community. Abandoned properties mean that crime is more likely to occur there. Squatters and criminals looking for a place to buy or sell drugs may use the property, knowing that no one is caring for it. Due to the fact that zombie foreclosures also fall into serious disrepair, the home can become unsightly, which will also cause surrounding property values to drop.

In Pre-Foreclosure? Our Foreclosure Defense Lawyers in Fort Lauderdale Can Help

If you are facing foreclosure, it is important to know that you have many legal options. At Loan Lawyers, our Fort Lauderdale foreclosure defense lawyers can advise you on what those are and give you the best chance of a successful outcome. Call us now at (954) 523-4357 or reach out to us online to schedule a free review of your case.