WASHINGTON – Jan. 16, 2013 – Some refer to “zombie titles” as a little-known horror in the fallout of the foreclosure crisis. Thousands of homeowners are discovering they may be legally liable for a home they thought they no longer owned.

In some of these cases, homeowners receive a notice of a foreclosure sale and move out to give the home to the bank. But then the bank never completes the foreclosure.

“The banks are just deciding not to foreclose, even though the homeowners never caught up with their payments,” Daren Blomquist, vice president at RealtyTrac, told Reuters.

According to housing experts, the problem of “zombie titles” is worsening, although no national database tracks such titles.

“There are thousands of foreclosures in limbo, just hanging out there, just sitting, with nothing being done,” says Raymond Pianka, a judge with Cleveland Housing Court. He says the problem is due to homeowners who leave the home before an imminent foreclosure sale. Later, the homeowners discover they’re legally responsible for the home. By that time, the house may have greatly deteriorated. And some homeowners don’t even discover it until years later, such as when a municipality finally fines them for failing to keep up the property.

Source: “‘Zombie Titles’ Haunt Victims of Foreclosure,” Reuters (January 2013)

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