01 January 2020 / in Company News
While this time of year brings out the ghosts, ghouls, and zombies, there is one type of zombie that is real. A property is considered a zombie property when an owner moves out after receiving a foreclosure notice, but the bank does not complete the foreclosure process. As a result, the vacated property remains in the homeowner’s name and the title has not transferred to the bank.
Zombie properties many times quickly fall into disrepair and become a nuisance to the surrounding community as no one is left to maintain the property. Many banks simply walk away from such properties if it has become too deteriorated, resulting in a negative impact to the community.
Recent statistics estimate that there are over 300,000 zombie properties in the U.S, however, this number could actually be much higher as the methods for tracking such data are archaic.
Scary Issues Surrounding Zombie Property
A zombie property is an abandoned property. The homeowner who retains title is unaware of this fact, thus vacating the property. Zombie properties lead to several various negative impacts such as:
• Loss of value to the property due to negligence
• Creation of unsafe conditions and health hazards, such as mold, hazardous chemicals, and structures that become unsafe due to lack of repair
• Squatting on the premises or in some neighborhoods, or worse, the takeover of the property for crime-related activities
• Property upkeep is neglected which could lead to code violations, overgrown yards, homeless animals, and pests. Unpaid taxes owed on the property haunts the local government as these monies are used for the operation and maintenance of the town and public works
In some cases, the local government may seek to find a responsible party for the condition of the property as it can be a blight on the community. This may result in liability placed back onto the owner who lost the property if their name is still on the deed. The unknowing owner can then be subject to fines or other penalties if certain deadlines for payment are not met. The former owner of the property can be liable for payments on property they no longer legally own if the foreclosing party failed to complete the foreclosure action.
How Can a Zombie Foreclosure Be Prevented?
Most zombie foreclosures are easily avoided by following up with the bank, counsel, or with the real estate agent to ensure that the foreclosure process, or sale transaction, has been fully completed. Alternatively, properly educated parties can explore various foreclosure alternatives to retain ownership of the property, such as renegotiating the mortgage. CW Solutions is a title and land acquisition company that can assist with locating and completing the foreclosures on zombie properties, which can prevent a zombie property from becoming a community’s nightmare on Elm Street.