Florida has become beset by the undead – mortgages, that is.
Our Miami foreclosure lawyers understand that these homes, blighted and abandoned, have been campily named “zombie foreclosures.”
The reason being is they are not quite “dead” in that the cases aren’t closed. Yet neither are they “alive” in that the banks have chosen not to actively pursue them.
It’s a very scary prospect for the homeowners who are evicted from their homes after enduring a foreclosure, only to have the bank halt the process because they don’t want to pay the fees for back taxes or liens or code violations. Yet neither do the banks inform the homeowners that the process has been stopped, which leaves the unwitting homeowner on the hook for all those fees.
The home falls into disrepair. Property values of nearby homes are dragged down.
So while the homeowner has moved away, thinking the case is “dead,” a done deal, their credit scores continue to be shredded and their debt continues to stack up. Many end up being forced to file for bankruptcy.
The worst part of all of it is that because the homeowners don’t know that the home is still in their name and that the bank has stopped pursuing the foreclosure case, they don’t realize that they still have a right to be living in that home. At least if they were going to be paying the fees, they should have the benefit of living in the house.
This is not an isolated incident.
Housing data firm RealtyTrac, which analyzes foreclosure activity across the country, reports that there are some 302,000 zombie foreclosures nationwide. That’s a conservative estimate.
That accounts for anywhere from 35 to 50 percent of all foreclosures, just depending on which state we’re talking about.
It’s probably much higher, especially when you consider that in Florida, the firm didn’t include foreclosures that had been in the process longer than 850 days.
Florida has the highest number of “zombie foreclosures” in the country, with roughly 91,000, according to Vice President of RealtyTrac, Daren Blomquist. He recently discussed the phenomenon with Chicago Tribune Staff Writer Mary Umberger.
Illinois was the next-highest, with about 32,000 and California followed with about 29,000.
Blomquist said in most of these cases, banks typically make a deliberate decision not to continue pursuing the foreclosure, even after it’s been initiated and the homeowner has moved out.
Typically, it comes down to a few different factors: The length of the foreclosure process and also the simple fact that in some cases, it’s not in the bank’s best interest to press on with the case because of the holding costs.
Many cities have started cracking down on the banks and imposing fines when foreclosed homes aren’t properly maintained. But the banks have found a loophole: If the home isn’t actually foreclosed upon, it’s still in the homeowner’s name and therefore still his or her responsibility to maintain the property.
While the types of properties with the potential to become “zombies” run the gamut, most are older homes that are less attractive to investors. Newer homes require less work to rehab and flip.
If you suspect you may be the victim of a zombie foreclosure in Miami, contact our offices as soon as possible to learn more about how we can help.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal 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 foreclosure statistics scary, April 19, 2013, By Mary Umberger, The Chicago Tribune
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Florida Foreclosure Bill Green-Lighted By House, May 5, 2013, Miami Foreclosure Lawyer Blog