Zombie Mortgages Are as Scary as They Sound
Mortgage foreclosure is an ordeal. The bank could kick you out of your house in an instant, but instead they drag the process out for months, with final notices, additional notices beyond the final ones, a foreclosure case, and court order, and then the auction of your house, like a cat toying with a mouse until it dies of fear instead of just pouncing on it. Some people, sensing a terrible fate, move out of their houses as soon as they receive the foreclosure notice; they move in with relatives and just let the bank claim the house that they don’t have the resources to stop it from claiming. This is not an advisable solution, though; it could lead to someone more financially ruinous for you than a foreclosure, namely a zombie mortgage. A better idea is to fight to foreclosure so you can keep the property, or if you cannot do this, then to surrender the property through a deed in lieu of foreclosure. For help making an informed decision about your mortgage if you have fallen behind on payments, contact a Philadelphia mortgage foreclosure lawyer.
Not All That Groans Is a Zombie
In a foreclosure case, the bank that issued the mortgage becomes the legal owner of the real estate property that the borrower has pledged as collateral for the mortgage loan. Of course, the borrower remains the legal owner of the property until the foreclosure becomes final. Sometimes lenders send foreclosure notices to scare borrowers into paying up, even if it means taking on more debt, or to handing over the property in a deed in lieu of foreclosure. They are not always serious about foreclosing.
If you vacate your property as soon as you receive the foreclosure notice, and the bank does not follow through with the foreclosure, your mortgage loan becomes a zombie mortgage. You are still responsible for paying it, even though you have abandoned the property. You might also still be responsible for the homeowners’ association fees. In other words, it wrecks your creditworthiness even more than a foreclosure that, even though it cost you your ownership of your house, at least got you off the hook for paying the mortgage.
Don’t Let That Mortgage Foreclosure Notice Intimidate You
A mortgage foreclosure notice is nothing less and nothing more than an invitation to engage. It is up to you to decide what to do next. Will you contact your lender and work out a plan for repaying the overdue amounts? In the best-case scenario, you can even get a short refinance, which effectively forgives some of your mortgage debt while enabling you to keep your home. If you decide that there is no way to keep your home, the least financially damaging option is to execute a deed in lieu of foreclosure, where you surrender possession of the house but are no longer responsible for the mortgage loan.
Contact CONSUMERLAWPA.com About Avoiding Zombie Mortgages
A Philadelphia consumer law attorney can help you respond appropriately to a foreclosure notice. Contact CONSUMERLAWPA.com to set up a free, confidential consultation.
Source:
parealtors.org/blog/cfpb-targets-zombie-foreclosures/#:~:text=Zombie%20foreclosures%20result%20when%20banks,responsible%20for%20their%20vacant%20properties.
