New, unforeseen challenges have come back from the dead to bite homeowners in the back. What’s “Zombie Mortgage”? This is the situation where a property owner has abandoned a property encumbered by a mortgage and the lender will not foreclose and take the property.
Colloquially known as “Zombie mortgages” they mainly affect those who applied for a mortgage for a home during the housing crisis in 2007-2008. Deeds that were believed to have been paid off have been reported delinquent and have come back with threats of foreclosure.
Two of the largest causes for this are people who believed that their mortgages were discharged due to bankruptcy, and those who couldn’t send their mortgage payments anywhere due to their lenders disappearing during the crisis.
Regardless of the reason, the threat of losing your home nearly a decade and a half later has come to be quite the concern. With the sudden price of homes surging beyond pre-COVID levels, enforcing this lost money is quite profitable for banks—hence the reasoning behind why these events are suddenly appearing more and more often.
If this has occurred to you, there’s several things you can do; with the first being to contact your escrow company or the customer service department of your title. If this isn’t possible, try contacting the federal companies Fannie Mae or Freddie Mac, as they likely have information on who to pay the missing money to. Lastly, keep in mind that it’s alright to ask for help. Contact a real estate attorney, due to the exceptional seriousness of what’s happening.
