October 26, 2018
“Zombie” Homes: What They Are and Issues to Consider
Where the process of foreclosure on a home—and the prospective change in title ownership that goes with it—are concerned, there lurks just beneath the surface the ever-troublesome possibility that a home may slip into what is referred to by various types of “zombie” nomenclature.
There’s “zombie home,” “zombie title,” “zombie foreclosure.”
All of these undead metaphors refer to the same situation: Wherein a homeowner receives notice from a bank of the initiation of foreclosure proceedings, throws up their hands in despair, and clears out early.
The economic downturn we call the “Great Recession” was characterized, in part, by the spread of this phenomenon. Indeed, as though under influence of a virus, homeowners all over the country fell into economic ailment and defaulted on their mortgage payments. When lenders started foreclosure proceedings, many people cleared out immediately, leaving the homes vacant.
What many homeowners—up to 300,000 nationally, and perhaps more—didn’t realize was that sometimes a foreclosure doesn’t go through. Or that the process can take quite a while—particularly in states like Florida, where we at Topouzis & Associates, P.C. do a lot of title work, though properties in Rhode Island and Massachusetts are far from immune.
And until the foreclosure process is completed and title is transferred from the mortgagee to the bank, the home’s upkeep, taxes, homeowners’ association fees, and any other related expenses are still incumbent upon the homeowner to handle.
The number of homes in a state of “zombie” title have dropped quite a bit since the crisis reached its height around 2010.
But in the meantime, homeowners who cleared out early were hit with a whole lot of back taxes, fees for upkeep from their local governments, and so forth. That’s a nasty sort of surprise. And the values of homes in the surrounding neighborhoods took a hit, too, as a result of proximity to homes that were vacant and uncared for.
It makes sense to be wary of properties with a history of “zombie” title, but we do have ways of sorting things out. An important step in ensuring you won’t encounter any trouble with “zombie” title in the history of a home purchase is to get in touch with an experienced closing firm, like us here at Topouzis & Associates, P.C., to do a thorough title search. The next step is to purchase a title insurance policy to handle any lurking troubles. We can help with that too.