With Halloween just around the corner, the words, zombie foreclosure, may seem like holiday terminology but according to data from ATTOM Data Solutions, over 14,000 properties in the foreclosure process were vacant as of the end of Q3 2017. Although this number has decreased dramatically over the last few years due to increased demand, there are still approximately 300 zombie foreclosures in the state of California.
A zombie foreclosure occurs when a homeowner moves out of his or her house during the foreclosure process, but before the bank has taken possession of the home. Homeowners who have been turned down for a loan modification, can’t make payments on their mortgage, or have met with resistance from banks who won’t work with them on a short sale, sometimes feel their only course of action is to vacate their property, believing the bank will take ownership of their homes.
However, in an ironic twist, sometimes the banks do not sell the home or the title is never transferred, leaving the unsuspecting homeowner still responsible for the loan and all debt associated with it. Banks can halt the foreclosure process if they have too much inventory, if the value of the home is too low, if the price to repair and keep up the home does not justify the foreclosure process, if they lost the paperwork, or if the home has been taken over by squatters. Instead of working with the homeowner who will take care of the property and enhance the value not only of the home but of the neighborhood and community, the bank chooses to do nothing.
Since banks are under no obligation to inform homeowners that their home is no longer under foreclosure, and there is no database to record zombie foreclosures, homeowners who vacated their homes are under the impression their home is no longer theirs. They stop making tax payments, paying their HOA dues, and repairing their homes. The unsuspecting home owner incurs fees, costs, and fines by the city, government, HOA, or tax collector. The properties fall under disarray and remain vacant and abandoned, providing a valuable piece of property for squatters and drug dealers.
Zombie Foreclosures affect more than just the homeowners. They also affect the neighbors who are still in their homes and have to suffer lower property values due to the disarray of the abandoned homes. Police are repeatedly dispatched to the homes by concerned neighbors who want to keep their neighborhoods safe from vandalism, crime, and squatters who illegally occupy the vacant homes.
If you feel that you are the victim of an unlawful foreclosure, or you feel that the servicer or lender is in violation of statues, Estavillo Law Group, PC may be able to help you. Please contact us for a complimentary consultation. We have helped many people in counties all over California, and we would like to help you, too.
If you or someone you know is facing foreclosure or has a real estate litigation issue, Estavillo Law Group may be able to help you. Please contact us for a free consultation.