how a zombie foreclosure works
zombie foreclosure results from a homeowner s misunderstanding of the foreclosure process during a typical foreclosure the homeowners notice the institution holding the defaulted mortgage that the house is entering foreclosure after this notice is issued there is a mandated waiting period during which the homeowners can pull the house out of foreclosure by paying a large lump sum of money the required payment may range from a few back payments to the total amount the homeowners owe in arrears or the entire balance of the mortgage until a foreclosure goes through the homeowner continues to hold the title to the property if the homeowners do not pay the lump sum the process continues and a court will rule that the house belongs to the lender it is only after this point that the house legally becomes the lender s property that the homeowners must vacate the property in the fourth quarter of 2020 zombie foreclosures rose to 3 8 of all foreclosures but overall they have fallen by more than half since 2016 according to attom data solutions 1sometimes a lender will decide not to complete a foreclosure one reason might be that it s too expensive to pay for repairs and back property taxes that are owed on the property the lender won t take title to the house but is under no obligation to notify the homeowner of this in this circumstance when the title of a home in zombie foreclosure remains in the name of the original homeowner who is often unaware that the foreclosure wasn t completed it is known as a zombie title 