Pitfalls of the Walkaway- Don’t Let A Bank Control Your Future
Zombie mortgages are a little-known phenomenon in the world of real estate that can have serious consequences for homeowners. These mortgages, also known as “zombie foreclosures,” occur when a homeowner defaults on their mortgage and the lender initiates foreclosure proceedings, but then the foreclosure is not completed. This leaves the homeowner in a state of limbo, still technically owning the property but with no clear path forward.
The term “zombie” comes from the fact that these mortgages can continue to haunt homeowners long after they have stopped making payments. In many cases, the homeowner may have moved out of the property, thinking that they have been foreclosed on, only to discover later that they are still on the hook for the mortgage.
The consequences of zombie mortgages can be significant. Homeowners may be liable for property taxes, homeowner’s association fees, and other expenses even if they are no longer living in the property. The property itself may fall into disrepair, leading to further financial liabilities and potential legal problems.
Zombie mortgages can also have an impact on the wider real estate market. These properties may be left vacant and abandoned, leading to blight and lower property values in the surrounding area. In addition, banks may hold onto these properties for an extended period of time, further exacerbating the problem.
One way to avoid the issue of zombie mortgages is to work with a reputable lender and take steps to stay current on mortgage payments. Homeowners who are struggling to make their payments should consider working with a financial counselor or seeking out government assistance programs. It is also important to stay informed about the state of the real estate market and any changes in regulations or laws that may impact your mortgage.
If you do find yourself facing a zombie mortgage, it is important to seek legal advice and take steps to protect your rights as a homeowner. In some cases, it may be possible to negotiate with the lender and come to a resolution that works for both parties. However, it is always best to take proactive steps to avoid getting into this situation in the first place.
In conclusion, zombie mortgages are a serious issue that can have far-reaching consequences for homeowners and the wider real estate market. By staying informed, working with reputable lenders, and taking steps to stay current on mortgage payments, homeowners can avoid the pitfalls of this phenomenon and protect their investment in their property.
Faro & Crowder, P.A. is experienced in helping homeowners navigate the foreclosure process including both retention and not retention such as deeds in lieu, cash for keys, and controlled walk aways. Contact us today for a free consultation to know your options.