Zombie foreclosures happen when the homeowner assumes they have lost their home and moves when the bank begins foreclosure, but the foreclosure process is never completed. So both the homeowner and their title are caught in between this world and the next, like a zombie.
The problem is that once the homeowner leaves, there’s an opportunity for real estate taxes to go unpaid and the property to go unmaintained, which often leads to code enforcement violations, vandals, and even squatters. You wind up with a whole slew of new problems—which the homeowner, not the bank, can still be liable for without even knowing it
Your first step when fighting back against a zombie foreclosure is to check the county or tax records. These are online in most areas now and will show you if you’re still on the title.
Anyone who has been foreclosed on might want to do this, if only to be sure. If you see that the bank has started but not finished a foreclosure, contact the bank and try to find out what their plans are.
The good news is that most banks are far more open nowadays to negotiate a short sale, deed in lieu of foreclosure, or agree to a loan modification than they were when most of these foreclosure cases were started.
The next step is to review current records for past due taxes, code violations, or other liens, and check out the property condition. You want to make sure you do what you can to avoid any more damage than what has already occurred and to also secure the home.
Depending on the circumstances, you may be able to rent the home or move back into it—a happier ending than most zombie movies get to see.