Zombie foreclosures — far from the latest George Romero imagining for a post-apocalyptic hellscape — are a real problem in the already soft housing market, and experts warn homebuyers to be on the lookout for the increasing problem of zombie titles roaming the American housing landscape, consuming the few remaining assets of strapped former homeowners.
The zombie foreclosure problem has essentially followed the initial waves of foreclosure after the housing collapse. And while many homeowners walked away from homes that were underwater, banks are also walking away — but from the sometimes losing proposition of foreclosing on a property.
And the zombie foreclosures shuffle in — in the limbo created when both a homeowner and bank abdicate responsibility for a property, ensuing charges and other shamblers create life-ruining headaches for those bitten.
Reuters spoke about zombie foreclosures and the new housing horror’s impact on struggling Americans with retired Cleveland-Marshall College of Law Professor Kermit Lind. Lind says that the trend of zombie foreclosures is new, but the effects are as scary as the name suggests:
“[Victims of zombie foreclosures] have become like indentured serfs, with all of the responsibilities for the properties but none of the rights.”
The newswire explains how zombie foreclosures came to be, and why the trend presents new challenges for homeowners in the current market:
“Banks used to almost always follow through with foreclosures… That has changed since the housing crash. Financial institutions have realized that following through on sales of decaying houses in markets swamped with foreclosures may not yield anything close to what is owed on them.”