NBC News recently reported on the situation of an Ohio man who may literally die as a result of a mortgage foreclosure that remains undead.
Our Miami foreclosure lawyers understand this situation started about five years ago, after he fell 10 months behind on his mortgage payment. He was told the house would go up for auction, and he and his wife moved out. But then he was sued by the county for code violations. Then the tax collector sued him for thousands in back taxes for sewer fees and waste removal. Then he was contacted by the bank’s debt collector, claiming he owed up to $85,000 for his mortgage. And then just recently, the Social Security Administration denied him disability benefits on the basis that the “asset” made him ineligible. With advanced liver disease, among other ailments, that decision means he can’t get a liver transplant he so desperately needs.
As it turns out, the bank claims that it filed to dismiss the foreclosure case back in 2008, several weeks after the homeowner and his wife had already moved out. But the homeowner said he never received any such notice. Yet, his name stayed on the title – making him responsible for all of it.
It’s not clear how many so-called “zombie titles” there are in America right now. However, given the fact that some 10 million homes have gone into foreclosure since 2006, and the paper trail mess that so many banks and mortgage companies were in, it wouldn’t be surprising to find thousands of homeowners across the country grappling with this issue.
We know that approximately 2 million of those foreclosures were never finalized. Some of those homes may be still occupied by homeowners living for free. Some have been swept up in the robo-signing scandal, in which banks tried to churn out as many foreclosures as it could as fast as it could.
But then there are the cases like this Ohio man. Cases in limbo. Never truly resolved one way or the other.
Just as many homeowners made the choice to simply walk away from their mortgage, it appears that for the last few years, banks have been doing the same thing. Except unlike homeowners, who must for years live with the ill effects of that foreclosure on their credit score, banks have done so with no apparent repercussion.
Essentially, people left what they thought was an imminent foreclosure – which banks had warned in multiple official letters and other correspondence. Except it’s not until later the homeowner learns he or she is still responsible for the property. A situation like this means their wages have been garnished, their credit is ruined and their tax refunds are seized. Bailiffs show up at their front door, ordering them to come to court. Some are forced to file for bankruptcy. In some places, they are even threatened with jail.
Some have likened the situation to those of indentured servants: They have all the responsibilities of property ownership, yet none of the rights.
The reason so many homeowners were caught off guard by this scenario is that it rarely if ever happened before the housing bust. It used to be, banks would, without fail, follow through with a foreclosure action in one of two ways: either putting up for sale at a sheriff’s auction or repossessing it outright. A letter would be sent to the homeowner informing them of the intention, and that was it.
But after the housing market tanked, the banks began to understand that if they followed through on repossession of these homes, they were going to be responsible for the homes’ upkeep, taxes, etc. And even if the home could be sold at auction, the banks knew they wouldn’t get anything near what they owed.
So, they simply walked away, unbeknownst to the homeowner, who would often only find out after these actions were taken against them.
If this is a situation you have found yourself struggling with, call us today. We can help you find the way out of this legal nightmare.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
‘Zombie titles’ haunt victims of home foreclosure, Jan. 11, 2013, By Michelle Conlin, NBC News
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“Groundbreaking” Disciplinary Action Against Florida Foreclosure Firm, Jan. 13, 2013, Miami Foreclosure Lawyer Blog