what are the financial implications for the lender by walking away from such mortgages banks can at least reap the insurance tax and accounting benefits arising from such losses 3 a lender may also sell the unpaid debt to debt collectors to recoup all or part of the loan 
while the financial impact of zombie titles on deep pocketed financial institutions may thus be limited they can lead to significant and often catastrophic financial problems for homeowners who thought they had moved out and moved on a zombie title represents a double whammy for a homeowner who is already financially stressed due to bankruptcy and may be faced with a hefty bill for back taxes and code violations just as they are getting back on their feet financially an unoccupied home for example can easily fall into disrepair not only does the homeowner remain liable for property taxes but they can also be held liable by the local government for maintenance and repairs on the property if the house is derelict and has to be demolished these costs have to be borne by the zombie title homeowner the homeowner also has to contend with the host of problems that arise in connection with an abandoned property these may range from public nuisance issues arising from the property developing pest infestations or being used for criminal activity to complications arising from illegal squatters or adverse possession neighborhood effectsabandoned properties also have a negative impact on the value of other houses in the neighborhood complaints from neighbors and area residents about abandoned and neglected houses often forces the local municipality to step in and perform basic maintenance such as trimming overgrown yards or trash removal since neither the lender nor the absentee homeowner will take responsibility for the property s upkeep the costs of such third party maintenance and the penalties levied for code violations can mount up over time if those costs are left unpaid the homeowner could incur penalties and fees and even face legal action in addition holders of zombie titles may have their wages and tax refunds garnished and their credit destroyed resulting in more financial trouble in the future many homeowners do not realize they hold zombie titles until they find themselves being pursued by mortgage servicers debt collectors and local governments buyers who unwittingly buy homes with zombie titles can also be left in legal limbo as the previous homeowner may be unable to transfer title to the buyer due liens on the property arising from unpaid taxes and penalties caveat emptor should be the main guiding principle before buying a house the biggest purchase decision for most people some real estate professionals advise that the homeowner s only recourse is to continue staying in the home through the foreclosure process in order to keep it secure and well maintained in any case homeowners can protect themselves against zombie titles by seeing the foreclosure process through to completion as well as making sure that the title to their home legally transfers to another party 