Zombie Foreclosure

If you receive a foreclosure notice, don’t treat it like an eviction notice. If you do (meaning, if you move out right away), then you’ll find yourself in a pickle called a zombie foreclosure.

When the foreclosure process starts, the homeowner is still responsible for the property. It’s not until the foreclosure process is finished that the property becomes the lender’s responsibility. As long as the homeowner still has the title of the home, it’s still theirs. Transferring the title of property takes some legal paperwork and time, so no need to jump ship so fast.

Sometimes, lenders will even start the foreclosure process, and then...not complete it. Which means the house is still the responsibility of the homeowner, along with all the taxes and other legal strings that come along with homeownership.

Zombie foreclosures result in homes that are vacant that shouldn’t necessarily be, leading to property decay, which can result in a drop in house prices in the area. All from a misunderstanding. Awkward.

There was an increase in zombie foreclosures as the result of the financial crisis of 2007-2008 from all of the subprime mortgages handed out that shouldn’t have been by greedy lenders. Ugh. Not cool.