Homeowners are caught up in a little-known horror of the U.S. housing bust: the “zombie title
The answer is “yes”
Zombie titles – According to an article in the NBC News – thousands of homeowners are finding themselves legally liable for houses they didn’t know they still owned after banks decided it wasn’t worth their while to complete foreclosures on them. With impunity, banks have been walking away from foreclosures much the way some homeowners walked away from their mortgages when the housing market first crashed.
“The banks are just deciding not to foreclose, even though the homeowners never caught up with their payments,” says Daren Blomquist, vice president at RealtyTrac, a real-estate information company in Irvine, California.
Since 2006, 10 million homes have fallen into foreclosure, according to RealtyTrac, a number that in earlier, more stable times would have taken nearly two decades to reach. Of those foreclosures, more than 2 million have never come out. Some may be occupied by owners who have been living gratis. Others have been caught up in what is now known as the robo-signing scandal, when banks spun out reams of fraudulent documents to foreclose quickly on as many homeowners as they could.
No national databases track zombie titles.
But dozens of housing court judges, code enforcement officials, lawyers and other professionals involved in foreclosures across the country tell Reuters that these titles number in the many thousands, and that the problem is worsening.
We have several videos on our web site. Below are a few that might be of interest:
- “Lender’s Foreclosure Rights in Arizona”
- “Should I keep my home or let it go into foreclosure?”
- “Meet Ms. Drain and Suggestions on How to Hire an Attorney”
MUSINGS BY DIANE: “I have been involved in the Arizona foreclosure market since 1987. I cannot count the huge number of people who assume that walking away from their home or business will terminate their obligation to pay the debts or maintain the property. This article explains that walking away does not mean the debt is gone or the burden to maintain the property is gone.
Talk to a very good real estate attorney who is experienced in foreclosures or trustee’s sales before taking any steps to abandon the property.”
Many people are in daptersee need of help from their lenders in the form of a loan modification. The financial difficulties being faced by these homeowners are causing people to struggle or fail to make their mortgage payments.With so many homeowners facing foreclosure or bankruptcy, borrowers are looking to their lender to help them modify their loan agreements. They are hopeful about getting some relief in the interest they are paying by having their interest rate, their principle or their monthly payments reduced.Bankruptcy is a legal recourse a borrower takes when he can no longer pay his bills. Foreclosure is not always avoided when a homeowner files for bankruptcy, nor does the homeowner need to live in their home until the loan is paid off. It is much better to choose a loan modification whenever this option is available as opposed to choosing bankruptcy. house.blogspot.com/2008/03/loan-consolidation.htmlAs soon as your file for bankruptcy, you are powerless to do anything that will save your home. It is important that you know that filing for bankruptcy only keeps your creditors from calling you. Alternatively, if you are approved for a home loan modification you will continue to pay your loan, albeit slowly, and will eventually own your home. Filing for bankruptcy will almost certainly damage your credit record and it is possible you will never qualify for a mortgage again or if you do qualify, the interest would make it unaffordable. Therefore the best option is to apply for a loan modification which enables you to regularly pay off your loan which will ultimately improve your credit rating.A well planned loan modification may improve your chances of fixing your credit score. This will never happen if you file for bankruptcy and a bankruptcy will always show on your credit report. If you pay your loan regularly, meeting the terms of your newly modified loan, you will improve your score. Thinking about what options is the best for you, either bankruptcy or loan modification, it is obvious that a loan modification is better. Settling your debts will not damage your records, whereas defaulting on a loan will haunt you for the rest of your life, limiting future opportunities.Good Luck..
There are some very good federal loan modification programs. Talk to the folks at http://www.makinghomeaffordable.gov. Bankruptcy will allow you to keep your home, but there are some issues that could arise if you are in bankruptcy and then want to modify your mortgage. Many of the federal loan modification programs will not allow the lender to refuse to modify just because you are in bankruptcy. Get good legal advice from a very experienced bankruptcy attorney.
My best, Diane L. Drain