The term zombie foreclosure conjures up visions of a house from a horror movie, stumbling around looking for a homeowner to feast on. The reality isn’t too different – zombie foreclosure is a term used to describe houses that are in between owners and are not being cared for or lived in. The result of this can be quite scary, both for the state of the house and for the homeowner who last held the title.
Many times when people receive repeated foreclosure notices, they voluntarily walk away from the home, sometimes before the foreclosure is finalized. When this happens, the vacant home is still deeded to the homeowner and they remain responsible for property taxes and other bills that are associated with owning a property. People are often unaware of this and further don’t realize when banks stall or fail to take action in completing the foreclosure process.
These types of properties in limbo can make up half of all foreclosure inventory in some states, which may have negative implications on local housing markets in need of recovery. These abandoned properties can also create problems for cities that are left to clean up the mess when a bank cancels a foreclosure sale and the homeowner doesn’t find out about it or doesn’t return for some other reason.
Homeowners who don’t realize that the foreclosure has not been completed are often shocked to find out that they owe the city money for things like graffiti removal or the demolition of a dilapidated property. These liabilities can impact someone’s credit score and can result in wage garnishment or having their tax refund seized by the city.
Source: Reuters, “More than 300,000 homes are foreclosed “zombies”, study says,” Barbara Liston, March 28, 2013.
Information about foreclosure in Tennessee is available on our website.