Maryland has one of the highest rates of zombie foreclosures in the nation, according to recent statistics.
When some people are faced with a foreclosure notice, they think there is little that they can do to keep their home. Consequently, they decide to move out of their home, leaving it abandoned. In most instances, the lender will complete the foreclosure process and sell the property to a new owner. However, in some cases, the foreclosure process is not completed. In such instances, the homeowner can find themselves in a difficult situation.
"Zombie " foreclosures
Incomplete foreclosures are often called "zombie" foreclosures (or zombie titles). This type of foreclosure occurs when the homeowner abandons the home, but the home is not sold to a new owner during the foreclosure process.
The reasons why the foreclosure process is left incomplete are varied. In some cases, the lender does not have the necessary paperwork to complete the process. In other cases, the lender may not sell the house because they have determined that it is not worth selling. Regardless of the reason, when the foreclosure process is not carried out to completion, the homeowner is still responsible for the property, as the title to it remains unchanged.
When a zombie foreclosure happens, it can cause problems for the homeowner. Since the title to the property remains in the homeowner's name, he or she is still responsible for the costs of ownership, such as property taxes and HOA dues. In some cases, the property can fall into disrepair or be subject to vandalism, which can cause the homeowner to be fined for zoning code violations. In other cases, squatters can damage the home, leaving the homeowner liable for repair costs.
Unfortunately, in most cases, the homeowner is unaware that these costs have accrued, as they had assumed that the foreclosure process had been completed. As a result, they are often blindsided by these expenses when they are already in a weak financial situation.
How to avoid zombie foreclosures
According to the latest data, Maryland is one of the nation's leaders in zombie foreclosures. As of the end of January, there were 3,400 properties in foreclosure in the state that were abandoned by their owners, putting Maryland in the top 10 states with this problem, according to RealtyTrac.
Due to the problems that a zombie foreclosure can cause, abandoning the home is a poorly conceived plan, if you are faced with foreclosure. If you would like to stay in your home, filing Chapter 13 bankruptcy is a better solution. In this type of bankruptcy, you repay your overdue mortgage debt in monthly installments over three to five years. Assuming that you make the payment each month, you can stay in your home without fear of foreclosure during the process.
If you do not want to keep your home, it is better to not leave the possibility of a zombie foreclosure to chance. There are several legal options that can ensure that you are no longer liable for your mortgage or the costs of owning your home.
In either case, if you are struggling with your mortgage payments, it is important to contact an experienced bankruptcy attorney as early as possible. An attorney can outline your options and recommend one that will allow you to accomplish your goals.