Foreclosures Come Back to Life!
In the popular “The Walking Dead”, humans die and regain life again by becoming zombies…
Here in real life, humans die, whereas a foreclosure dies…but becomes the zombies?
Sounds like a dilemma, right?
It begins when a bank schedules a foreclosure auction, but fails to perform, or forgets to transfer the deed to the house. This in terms technically means the borrower is the still the owner.
What does that mean for the borrower? Any HOA fees or property fees on the property remain attached to the homeowner.
According to RealtyTrac, roughly 1 million properties are lost in some sort of foreclosure distress. Though there are no certain numbers, it’s estimated that many could be what we call a zombie foreclosure.
More than half of these homes are in low-income communities where foreclosures are difficult to sell, so sometimes the bank delays taking possession of the property to save on taxes and other costs while keeping it under the borrower’s name.
Debts began to pile, because borrowers have no clue about the zombie foreclosure that is chasing them. By the time borrowers become aware, their credit score has plunged and they re-enter the pre-foreclosure stages of stress.
“The most frustrating part is that I can’t move on,” said Rose Nathan. Nathan is a 37 year old office manager, who lost her Natomas, California home in January 2009 after voluntarily walking away.” Her lender was CitiMortgage.
“On Christmas Eve,” she explained, “the bank called me and told me a sheriff’s sale was coming and I had to move our right away. So that’s what I did – seven days after New Year’s.”
She sold everything she had and moved to Hawaii. Two years later, Natomas sent a property tax bill for $5,000.
The bank, CitiMortgage, claimed that there was a lien on the property, that’s why they had never taken it over. Nathan’s attorney did some digging up, only to find that there was no evidence of the lien until after the bank had agreed to the deal of a deed-in-lieu.
In the mean time, the debt began to eat away Nathan’s credit score, eventually diminishing her relationship with her credit cards, even though she was making her payments.
Last spring, in a $25 billion settlement, the state attorneys general settled with the nation’s five largest lenders to let borrowers know of any decision to delay or forgo a foreclosure. However, the banks have not been too adamant about following that policy.
One of the many reasons you shouldn’t just walk away from your mortgage is, understanding that there are legalities that need to be reviewed. There’s an old saying that says, “Just because your friend is jumping off a cliff, doesn’t mean you have to do it too.” This proves true; you may see many home owners walk away from their mortgage because it doesn’t make sense to keep paying. However, that might in fact be a good reason to stop paying your mortgage and bail out! As in any business decision, you need to create an action plan: recognize the problem, analyze the solution, and seek out information. These three steps should be met before you decide to take any kind of action.
There is a cycle call “P.D.S.A.” Plan, Do, Study, Act. This methodology teaches us that we must learn before we act, and that’s what I intend on doing every time I talk to a homeowner that is in distress (upside down or facing a possible foreclosure). I try to educate them about the legal aspect of the “walk away strategy”.
Instead of having a zombie mortgage haunting you, put it to bed the 1st time around.
If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 916.442.6400 or send me an email at firstname.lastname@example.org or just visit my website www.JCLRealty.com/ted-greene.