Zombie Foreclosures: They're Not From the Movies!

Have you unfortunately already lost your home to foreclosure? Did you go via Deed in Lieu? Perhaps you had 2 or more loans when the hammer fell. Well, for some of you out there, we are seeing a disturbing detail of the foreclosure situation rising as we speak. This is the so-called Zombie Foreclosure. It has nothing to do with that scary movie or TV series that you may have recently seen. Rather, it involves finding an unexpected letter in your mail or receiving a threatening phone call from a collection agency chasing you for money that you didn't know you owed, and which, for the most part, you don't owe! Here's the way it works. You lost your home either by deed in lieu, or, if by a regular public foreclosure auction, to a foreclosing lender of your first mortgage, but you also had a second mortgage as well. In the former case, in far too many cases, the foreclosing bank either forgets to complete, or incorrectly completes, the documentation relating to transfer of title from you to them. The tax collector as a result never is notified that you no longer own the property, so he believes, incorrectly, that you are still on title. You, not owning the property any longer, have no reason to continue paying property taxes on it and do not,in fact, pay any such taxes. The tax collector, acting on erroneous information, passes your account to a collection agency and they start chasing you for taxes that you do not owe! Getting rid of them then becomes all too often like something out of Michael Douglas's efforts in the movie, Fatal Attraction, to rid himself of an extramarital girl friend. Try and prove you don't own the house--to the agency's satisfaction. That can be a real adventure! Alternatively, your lost your home to a foreclosing lender that held the first mortgage on the property. Unfortunately, even though the foreclosure wiped out any second and successive lower mortgages, THEY (the lenders) aren't giving up! They pass on the amount you owed at the time of foreclosure top a collection agency, with instructions to go after you for the amount they believe is still due. Again, getting the agency off your back can be a monumental task. In either case, you very well may have to engage legal counsel, and, if you couldn't pay your mortgage, how do you do that? You may want to talk with Legal Aid, or find a lawyer that does pro bono work, or locate counsel that will take on the bank AND the collection agency in a lawsuit to: get them to stop hounding you; and pay you compensation for the continued aggravation, as well as any damage to your financial standing and/or reputation. Fortunately, these zombie foreclosures are the exception to the rule, but they are on the rise. Hopefully, you're not one of them, and if you are, you can get help to end the chase. As always, good luck.