While the term “zombie title” probably generates the image of the “undead,” it is actually connected to real estate. Zombie titles have become a serious problem over the last several years. If you are in a situation where you have received notice that the bank is starting foreclosure procedures, there are some facts about zombie titles that you should know so that you can protect yourself from becoming the victim of one.
Here are three important points to know about zombie titles:
1. The creation of a zombie title
A zombie title starts out as a regular title to your home. When the home is foreclosed on, the general procedure dictates that the homeowner is given a certain number of days to leave the property before it is sold.
However, banks may fail to follow through on the foreclosure process, leaving the titles in the name of the homeowners. Months and even years can pass without bank action, leading the homeowners to believe that they have lost ownership of the house and are no longer responsible for maintaining it.
Problems occur when the homeowners start receiving bills for home repairs, county taxes and other issues on the home. It is only then that these homeowners discover that they still own the home and the mortgage.
In the interim, the unoccupied home may have been stripped of everything worth value by those illegally gaining entry to the empty home. As a result of the vandalism, the home is now worthless. The homeowner can’t live in it, can’t sell it and still owe the bank a substantial amount of money. The home’s title is now a zombie title they can’t get rid of.
2. Responsibilities of former homeowners
Since the home remains in the homeowners’ names until the foreclosure is finished, the homeowners are responsible for its upkeep and condition. Therefore, if the property is damaged or vandalized, those repairs become the homeowners’ legal responsibility. Otherwise, the homeowners could face violation fees due to local housing ordinances and liabilities.
3. Bank obligations
Many homeowners may think that once they receive the bank’s letter, the bank has officially taken ownership of their home. However, the bank has no obligation to follow through with the contents of the letter or notice. This means the institution can decide to dismiss the foreclosure. Here are a few reasons why the bank may not claim the home:
-The bank has too much inventory.
-The sale of the house will not provide them with enough return.
-The bank does not want the house back.
The bank is not required to take the home or inform homeowners of the rendered decision. While the rights extended to banks may not seem fair, these actions are perfectly legal.
Therefore, it is always a good idea to take the initiative and contact the bank on a regular basis to make sure that the foreclosure is still occurring. Maintaining contact with the bank will keep you informed of what is happening on the home and prevent any unpleasant surprises later on.
Available options to destroying a zombie title
If you have been left with a zombie title on your hands, you may still have some options available to you. With the proper help, you may be able to get the bank to agree to a short sale or deed instead of foreclosure, which will relieve you of the burden of ownership. You may also be able to use the time to negotiate for a better loan payment plan. Speaking with an attorney is a good idea and may provide you with additional information.